EU targets Russian banks in new sanctions package over Ukraine war
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The EU said the package was its biggest for four years.
PHOTO: REUTERS
- The EU agreed on its 21st sanctions package against Russia, focusing on its banking sector and granting a one-year exemption to transfer Russian LNG to third countries.
- The package targets 94 Russian financial institutions, including banks and crypto operators, with asset freezes, travel bans, and disconnection of 32 banks from SWIFT.
- The EU froze the Russian oil price cap at US$44.10 a barrel for 12 months to limit Moscow's revenue without causing an oil price shock amid rising crude prices.
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BRUSSELS – European Union envoys agreed on a 21st sanctions package against Russia over its war in Ukraine, imposing curbs on its banking sector while also finding a compromise with Greece to soften restrictions on Russian LNG, EU diplomats said on July 23.
The package, which the EU said was its biggest for four years, granted a one-year exemption with automatic renewal allowing EU companies to transfer Russian liquefied natural gas to third countries, after demands from Greece. Sanctions require unanimity to be adopted.
“Member states showed solidarity with Greece and it’s expected that Greece will do the same with others in the future,” one EU diplomat said.
Athens said a planned ban on transfer services for Russian LNG would simply shift market share outside Europe and would not impact Russian revenues. The measure was due to come into effect on Jan 1. EU imports of Russian LNG will still be banned from that date.
Greece dominates Europe’s LNG carrier market and is among the biggest players globally, competing with Japan, China and the United States.
EU targets banks, crypto
The EU’s chief diplomat Kaja Kallas said on X the sanctions package was its “largest round in four years, totalling 218 listings”.
These entities and individuals will come under the full weight of sanctions including asset freezes, travel and transaction bans.
The restrictions target the banking sector in an effort to squeeze Russia’s financial system at what the EU sees as a vulnerable time for its economy.
Russian companies have succeeded in maintaining trade and financial flows via small or regional lenders as well as cryptocurrency networks.
“We’ve hit more than a hundred banks and crypto operators, over 40 shadow fleet vessels, and several oil refineries in Russia and Belarus, who help keep Moscow’s war going,” Kallas said in her X post.
One of the diplomatic sources specified the package designates 94 Russian financial institutions – mainly banks – alongside Moscow’s stock exchange. The listings take the total number of sanctioned banks to over 100, or more than half of Russia’s 213 internationally connected lenders.
The package includes separate transaction bans on 32 of these banks, which means they will be disconnected from SWIFT, a global financial payment instructions system.
Russia’s biggest banks were disconnected soon after Russia’s invasion of Ukraine in 2022.
Oil price cap
The package includes a 12-month freeze on the Russian oil price cap at US$44.10 a barrel. The cap aims to reduce Russia’s sources of revenue without creating an oil price shock.
A scheduled review would have increased the cap after a jump in crude prices due to the Iran war, providing substantially higher earnings to Moscow on its sales using western shipping services.
However, the majority of Russian oil trades above the cap. Urals, Russia’s main export grade, has been trading well above the limit since February and was valued at around US$67.50 a barrel this week excluding shipping and insurance costs.
“We’re... freezing the oil price cap adjustment for a year, so that the Russian war machine does not benefit from market shocks,” European Commission president Ursula von der Leyen wrote on X. REUTERS
