EU Sanctions on Russia to Have an Impact of $25.5 Billion

On Friday, the European Union countries approved their fifth package of sanctions against Russia, which will have an impact of at least US$25.5 billion due to the embargo on Russian coal, the veto on imports of vodka, and a ban on exporting high technology to Moscow.

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The package includes the first blow to the Russian energy sector through the ban on imports of coal and other solid fossil fuels from August. This measure affects 25 percent of Russian coal exports and will have an impact of €8 billion.

The new sanctions package does not prevent European imports of Russian oil and gas, which provided Russia with revenues of €99 billion in 2021. The EU also banned imports worth €5.5 billion worth of Russian products such as cement, rubber products, wood, spirits, vodka, high-end food, and caviar.

The ban on exporting high-tech products to Russia will mean a loss of at least €10 billion in revenue for European companies, which will not be able to sell advanced semiconductors, quantum computers, "sensitive" machinery, chemicals, and special catalysts for refineries. The export of aircraft fuel and additives is also prohibited.

The European Union also adopted financial sanctions and restrictions against 217 Russian politicians, propaganda officials, businessmen and oligarchs, among whom are 179 members of the governments and parliaments of the Donetsk and Lugansk regions.

In the financial field, the assets of four Russian banks that had already been excluded from the SWIFT system will be frozen. This measure will leave these entities, which represent 23 percent of the Russian sector, completely isolated from international markets.

To "close potential loopholes" in the application of EU sanctions, authorities decided that European companies will not give financial advice to Russians nor will they be able to provide high-value crypto asset services to Russia.

On the other hand, European ports are closed for Russian-flagged ships and road transport in the EU is prohibited for Russian and Belarusian operators. However, transportation of medicine, food, energy or humanitarian aid is exempted from this provision.

The participation of Russian entities in public tenders in the EU is vetoed and the financing to Russia of all community programs will be cut. This measure affects scientific programs such as Horizonte or Erasmus +.