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LNG energy measures in latest EU sanctions package against Russia

25 June 2024, 19:09 CET
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LNG energy measures in latest EU sanctions package against Russia

Gas pipeline - Photo by Audriusa (Audrius Meskauskas)

(LUXEMBOURG) - The EU adopted a 14th package of sanctions against Russia Monday, with new energy-related measures targeting liquified natural gas (LNG), and measures targeting vessels supporting Russia's war.

The new package reflects the EU's aim of further reducing Russia's sources of revenue and capacity to wage war, and they send a clear signal of EU unity and its support for Ukraine and its people.

As regards LNG, the package prohibits all future investments in, and exports to, LNG projects under construction in Russia. It will also prohibit, after a transition period of 9 months, the use of EU ports for the transshipment of Russian LNG. Moreover, the package prohibits the import of Russian LNG into specific terminals which are not connected to the EU gas pipeline network.

One of the measures targets specific vessels contributing to Russia's warfare against Ukraine, which are subject to a port access ban and ban on provision of services. The vessels can be designated for a broad array of reasons such as their support through the transport of military equipment for Russia, the transport of stolen Ukrainian grain and support in the development of Russia's energy sector, for instance through the transport of LNG components or transshipments of LNG. The measure also targets tankers part of Putin's dark fleet which circumvent the EU and Price Cap Coalition's caps, while adopting deceptive shipping practices in complete disregard of international standards. In this first round of listings, the EU has placed 27 vessels on this list.

The package also introduces new listings targeting individuals and entities responsible for actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. A total of 116 additional listings of 69 individuals and 47 entities are subject to asset freezes, and – in the case of individuals – also to travel bans.

The latest package introduces a ban for EU banks outside Russia to use the financial messaging system SPFS, which is the Russian equivalent of SWIFT. It also allows the Council to draw up a list of non-Russian third country banks connected to such system; those banks will be banned from doing business with EU operators. Last, it introduces a ban on transactions with banks and crypto assets providers, in Russia and third countries, that facilitate transactions supporting Russia's defence-industrial base.

The package restricts export of nine additional dual-use and advanced technology items (e.g. microwave and aerial amplifiers, flight data recorders and All-Terrain Vehicles) and extends the export bans on certain types of industrial products chemical, plastics, vehicle parts and machinery goods (EUR 5 billion of EU exports prior to the invasion, in 2021). In addition, the export as well as the transfer of manganese ore are now prohibited.

The package also imposes stricter restrictions for the export of dual-use and advanced technology items to 61 entities – established in Russia (28) and in third countries (33) – which are directly or indirectly associated to Russia's military complex and thus contribute to supporting the Russia's war of aggression. In addition, the package also extends the import ban to helium which generates significant revenues for Russia.

To further limit Russia's ability to access restricted goods and technology, this package contains several measures meant to boost private sector compliance, support enforcement by national competent authorities, and hamper sanctions circumvention, including by keeping in check the foreign subsidiaries of EU operators.

It includes specific initiatives to protect EU operators from expropriation and to respond to other illegitimate actions of the Russian state, including the theft of intellectual property.

The package also finetunes the import ban on Russian diamonds already agreed in the 12th sanctions package. It clarifies that the ban does not apply to diamonds that were located in the EU or in a third country (other than Russia), or were polished or manufactured in a third country, before the ban on Russian diamonds entered into force (so-called 'grandfathering'). It also allows temporary imports or exports of jewellery, for example for trade fairs or repairs. Furthermore, the package prolongs by six months (until 1 March 2025) the sunrise period after which the full-traceability scheme for imports of rough and polished natural diamonds will become mandatory. In addition, it postpones the ban on jewellery incorporating Russian diamonds processed in third countries other than Russia until the Council decides to activate the ban in the light of action taken within the G7 to pursue that measure.

Lastly, the package includes measures that protect democratic processes and combat Russian interference, such as prohibiting political parties from receiving funding from the Russian state. It also includes measures strengthening existing transport restrictions, and in particular the flight ban and the road transport prohibition.

Link to Q&A (will be available after publication of the new measures in the Official Journal))

Link to Official Journal

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