14 Dec 2017
The EU has once again decided to renew its economic sanctions against Russia.
The measures target the financial, energy and defence sectors, and the area of dual-use goods.
Here’s a summary about how it started and the current state of play.
What’s the background to all this?
It’s largely about what happened in Ukraine. Basically, a crisis in Ukraine erupted after former President Viktor Yanukovych refused to sign an Association Agreement with the EU in November 2013 and sought closer ties to Russia.
Following radical protests from pro-Western groups, Yanukovych stepped down and fled to Russia. Moscow responded by annexing the Crimea in March 2014, sparking wide-ranging EU sanctions.
What is the Minsk agreement?
In February 2015, after negotiations in Minsk, the leaders of Germany, France, Russia and Ukraine signed an agreement to end fighting in eastern Ukraine.
Pro-Russian rebels in eastern Ukraine also signed the deal, which includes a ceasefire in eastern Ukraine.
From the onset, it seemed that adhering to the agreement on the ground would be challenging – intense fighting continued even during the talks.
But what does Russia have to say?
Russia denies Ukraine’s accusations that it is supplying troops and weapons to separatists fighting for the territory which Putin calls ‘New Russia.’ The sanctions have presented some serious challenges for Russia, but it has apparently managed to get by despite that.
When and why did the EU impose sanctions on Russia?
The EU originally introduced sanctions on 31 July 2014 for one year in response to Russia’s actions ‘destabilising the situation in Ukraine.’
The measures were strengthened in September 2014 and have been extended since.
In the latest development, in June 2017, the European Council prolonged the economic sanctions targeting specific sectors of the Russian economy until 31 January 2018.
On 14 December 2017, European Council President Donald Tusk announced that the EU was united on a roll-over of the economic sanctions on Russia.
Why does the EU keep extending the measures?
In March 2015, the European Council agreed to link the duration of the sanctions to the complete implementation of the Minsk agreements, which was foreseen to take place by 31 December 2015.
Since this did not happen, and given that the Minsk agreements have still not been fully implemented, the Council has extended the sanctions.
What do the economic sanctions involve?
The sanctions target the financial, energy and defence sectors, and the area of dual-use goods. They include:
•limiting access to EU primary and secondary capital markets for 5 major Russian majority state-owned financial institutions and their majority-owned subsidiaries established outside of the EU, as well as three major Russian energy and three defence companies;
•imposing an export and import ban on trade in arms;
•establishing an export ban for dual-use goods for military use or military end users in Russia;
•curtailing Russian access to certain sensitive technologies and services that can be used for oil production and exploration.
Is it just economic measures?
No, in addition to these economic sanctions, several EU measures are also in place in response to the crisis in Ukraine, including targeted individual restrictive measures, namely a visa ban and an asset freeze, currently against 150 people and 37 entities until 15 September 2017.
There are also the restrictive measures regarding Crimea and Sevastopol
The EU also said as a consequence of its non-recognition of the ‘illegal annexation of Crimea and Sevastopol by Russia,’ it would impose substantial restrictions on economic relations with Crimea and Sevastopol.
These measures include an import ban on goods from Crimea and Sevastopol, imposed in June 2014, as well as restrictions introduced in July on trade and investment related to certain economic sectors and infrastructure projects.
In addition, a full ban on investment has been in place since December 2014, along with a prohibition to supply tourism services in Crimea.
Russia looks to China as economy stumbles on sanctions, oil price drop
Advance your CPD minutes for this content, by signing up and using the CPD WalletFREE CPD Wallet