The Baltic states and Poland want to make it easier to sanction the family members and entourage of Russia’s richest men and women but are facing resistance from Hungary, several EU diplomats told POLITICO.
Under its current rules, the EU can freeze the assets and impose visa bans on “leading businesspersons operating in Russia.” Lithuania, Latvia, Estonia and Poland now want to expand this definition, according to their proposal seen by POLITICO, to include “their immediate family members, or other natural persons, benefitting from them.”
The EU has sanctioned more than 1,400 people in relation to Russia’s activities in Ukraine, many of who are Russian oligarchs. An additional 96 people could be added to the EU’s next sanctions package, draft documents seen by POLITICO indicate. Including oligarchs’ family members and other associates of oligarchs would make it possible to sanctions thousands more people without having to prove that they are directly involved in the war in Ukraine or acting in the economic interest of the Russian state.
This could, for example, apply to the ex-wife of Russian President Vladimir Putin, Lyudmila Ocheretnaya, whose daughters have been sanctioned but has not been herself, and other members of the oligarchs’ entourage.
While some countries had doubts, legal experts are on board, said one of the diplomats.
Yet, in a meeting on Tuesday, at which EU ambassadors discussed the bloc’s next round of sanctions, Hungary resisted such plans, the diplomats said. Budapest argued that this is not part of the 10th sanctions package, said one of the diplomats. Hungary has long been skeptical of including too many names on the list.
Hungary also pushed to strike four people out the already existing sanctions list, two of the diplomats said.
It was not immediately possible to learn the identity of the four individuals.
That request is igniting tensions, and will be likely subject to another heated debate during a meeting of EU ambassadors on Wednesday. During that meeting, they will not only discuss the new package of sanctions against Russia, but also the so-called rollover of the 1,400-plus names already on the list to keep them sanctioned.
That’s because the regime is subject to a six-month review, which has hitherto been more or less a formality. Now, Hungary is using this extension review as leverage by insisting that four specific people have to be struck from the EU’s existing sanctions list before it will agree to the rollover. If Hungary blocks the rollover and refuses to compromise, all 1,400 people would be de-listed, the two diplomats warned.
One of the diplomats didn’t hide his frustration: “It shows Hungary’s disregard for unity and European values that they are willing to risk this in the week where we commemorate one year since the Russian invasion,” he said.
And those aren’t the only measure that Hungary takes issue with. It also is chiefly against sanctioning personnel working in the nuclear sector.
But a Hungarian official poured water on this last point, saying that “the only open issue for Hungary is with the length of the rollover and not with the listings.”
On the oligarchs issue and the proposal of the Baltics and Poland, the same Hungarian official said that this is not part of the 10th package.
As all EU countries have to agree to the proposal, any country could veto the move even if all other 26 EU countries were in favor. Time is running out, with the EU wanting to adopt the 10th sanctions package before the one-year anniversary of Russia’s invasion of Ukraine on Friday.
[ad_2]
#Baltics #Poland #push #sanctioning #oligarchs #associates #easier
( With inputs from : www.politico.eu )
The EU has failed to sign off on a much-anticipated round of sanctions against Russia, leaving the bloc struggling to finalize a deal in time to mark the first anniversary on Friday of Vladimir Putin’s invasion of Ukraine.
Talks will now run into Ukraine’s official commemorations of its first year at war, casting into doubt European Commission President Ursula von der Leyen’s recent promise to President Volodymyr Zelenskyy in Kyiv to deliver a 10th round of sanctions by then.
Diplomats said agreement had been reached on nearly all of the package, but Poland was objecting to proposed restrictions on imports of synthetic rubber that it claims aren’t strong enough.
While acknowledging holding up the package, Warsaw denied being the problem. “We are not blocking sanctions,” a Polish official said on condition of anonymity. “We just want to have sanctions that make sense.”
All other points have been agreed on, four EU diplomats said.
The Commission was continuing talks with some EU countries on Thursday evening in search of a compromise, according to two of the diplomats. Another meeting of ambassadors from the 27 EU member countries will be held on Friday morning, four diplomats said, to try and secure a deal.
Poland’s objection related to proposed restrictions on imports of synthetic rubber from Russia. Sanctions hawks had called for a complete ban, but in an effort to appease other countries that rely on those imports the Commission suggested setting a quota limit at 560,000 metric tons, an EU diplomat said.
That’s even higher than current imports, thePolish official said. While several EU diplomats said Poland had been the most outspoken opponent of this quota, others have also expressed their discontent over derogations for certain companies. One EU diplomat said that the proposed quota “makes the sanction meaningless.”
Trade data show that imports from Russia haven’t exceeded that quota in the last decade.
The current package already excludes other controversial points, like a ban on Russian diamond imports, making it easier to sanction the family members and the entourages of oligarchs, or sanctioning certain employees of state nuclear company Rosatom.
Patience was running out, with another EU diplomat calling Poland’s move “unsustainable.”
Victor Jack contributed reporting.
[ad_2]
#eve #war #anniversary #fails #finalize #Russia #sanctions #deal
( With inputs from : www.politico.eu )
MUNICH — “I’ve discovered I’m popular with Munich taxi drivers,” chortled Mikhail Khodorkovsky. He’s surprised they recognize him. They have been peppering him with questions about the future of Russia and whether its President Vladimir Putin will resort to nuclear weapons or can remain in power.
They aren’t the only ones curious to get Khodorkovsky’s answers here at the Munich Security Conference. In the margins of the conference Khodorkovsky, former Russian tycoon, onetime political prisoner and now a leading Putin critic, is being sought out. And in bilateral chats, to the last query about whether Putin can hold on to power, Khodorkovsky says the only way the Russian leader will is if the West offers a helping hand by losing its nerve, engaging in premature negotiations and pushing Ukraine into a dubious deal.
“Let’s call it Minsk 6,” he tells me as I sit with him and other Russian opposition figures in a hotel bar after an exhausting day in the bustling Bavarian capital. The bar is full of other huddles deep in earnest discussion.
While conference organizers spurned a delegation from the Russian government, Russia’s opposition politicians and activists, including former World Chess Champion Garry Kasparov and former independent Duma deputy Dmitry Gudkov, have been welcomed. Khodorkovsky’s first session was packed out.
Ukraine’s leaders remain wary of Russia’s dissidents, arguing they aren’t immune from chauvinism and “largely ignored the eight years of war waged against us, even before the February invasion,” as Ukrainian lawmaker Lesia Vasylenko recently told me. “In order to be a Russian whom we can trust,” Vasylenko said, “you have to really prove that you’re not just against your own regime in Russia, but you oppose the war in Ukraine and that you stand for all the values Ukraine is defending — namely territorial integrity, Ukraine’s independence within the internationally recognized borders.”
Here in Munich, though, what Khodorkovsky and the others have been saying is music to the ears of the Ukrainians. On the spectrum between hard-liners and doubters who worry about escalation, they are among the most militant and are determined to bolster Western nerve and dispel fears of nuclear escalation.
It goes back to Khodorkovsky’s “Minsk 6.” As ever, he argues in a methodical way, inviting his interlocutor to follow his argument step by step in imitation of the Socratic method, asking and answering questions to draw out ideas and underlying presuppositions.
Some Western leaders have expressed their worries to him about a coup in Moscow. They are fearful that Putin will be replaced by someone worse. To this, Khodorkovsky says it can’t get any worse. He trawls through his cell phone to show me a bizarre video clip posted to the internet where one of Putin’s top nuclear advisers enthusiastically discusses how Russia will soon be able to racially improve future generations by cloning and incubating through planned eugenics. Presumably the dissident gene will be extracted.
He senses some in the West want negotiations, are putting out feelers and are under the impression Putin might want soon to negotiate. “They’re testing the waters,” he says. But he is adamant that talks would end badly for Ukraine, the West and Russians.
“Let us assume we have negotiations for a peaceful settlement. Let’s call it Minsk 6,” Khodorkovsky says, a hypothetical resurrection of the Minsk agreements that sought to end the war in Donbas but that were declared dead by Putin on February 22 last year, days before he launched his invasion.
He went on: “What does Putin get from this? He says, okay, I get to keep Crimea and give me all of Luhansk and Donetsk and I’ll return most of what I captured along the Black Sea coast, but leave me a corridor to Crimea. Let’s say Zelenskyy is squeezed and agrees to negotiate. You would destabilize Ukraine, which would be thrown into civil conflict as 87 percent of Ukrainians would not stomach such a deal — it would have the equivalent effect of, say, if Zelenskyy had taken up the American offer at the start of the war and taken a lift out of the country.”
Khodorkovsky outlines what would then happen. Putin would regroup, mobilize more, and draft people in the occupied territories, build up his arsenal and replenish his depleted munitions. The Russian leader would then accuse the Ukrainians of not holding up their part of Minsk 6, as civil conflict raged in Ukraine, which he would say is a threat to Russians in the occupied territories and likely there would be occasional attacks on border posts staged or otherwise.
Dmitry Medvedev recently warned that Moscow’s defeat in Ukraine could spark a nuclear war | Kirill Kudryavtsev/AFP via Getty Images
“You see Putin has no choice but to wage wars. His base of support now is restricted to the the so-called national patriots — to get more support, he needs to improve the economic well-being of Russians and he can’t do so because of corruption and cronyism and things like that,” Khodorkovsky says. At the same time, he would have to deal with the destroyed regions of Ukraine he occupies, and he’s faced with Western sanctions “and nobody will be in a hurry to lift them.” And his base of support will say he has failed to de-Nazify Ukraine or get NATO to move away from Russia’s borders.
“He will have absolutely no choice. He will have to start a new war. Only now his eyes are going to be on NATO countries, mainly the Baltics,” Khodorkovsky concludes.
After Khodorkovsky breaks off to talk with more interlocutors, Dmitry Gudkov tells me he agrees with his compatriot. And he also shares his view that it is unlikely Putin will resort to using tactical nuclear weapons, despite the threats and saber-rattling and comments by the likes of Dmitry Medvedev, Putin’s sidekick and now deputy chairman of Russia’s Security Council.
Medvedev recently warned that Moscow’s defeat in Ukraine could spark a nuclear war. “The defeat of a nuclear power in a conventional war may trigger a nuclear war,” he said in a post on the Telegram messaging app. Gudkov sees such threats as empty but an exercise in intimidation aimed at frightening doubters and faint hearts in the West, and strengthening their hand in urging a winding down and cautious calibration of support for Ukraine.
But Gudkov says Western leaders should hammer home a frequent warning of their own to everyone in Russia’s nuclear chain of command. “They should say repeatedly, ‘we know exactly who you are and where you live and if you push any buttons, we will target and get you — and you will never escape justice and revenge’,” says Gudkov.
Medvedev is one of Putin’s lieutenants who draws special derision from the Russian dissidents in Munich. Once keen to present himself as a moderate, Western-tilted modernizer and reformer, his recent furious tirades have prompted many in the West to scratch their heads and ponder, “Whatever happened to Dmitry Medvedev?”
The overall view is that he has gone through a makeover to accord with his master’s voice but is also positioning himself to be more relevant, much like the technocrat Sergey Kiriyenko, the former prime minister and current first deputy chief of staff in the Presidential Administration. Kiriyenko has taken to macho-posturing around the occupied territories of Ukraine’s Donbas decked out in camouflage.
But Medvedev’s comments have had a special poisonous and extreme flavor of their own. He’s described Joe Biden as a “strange grandfather with dementia,” dubbed EU leaders as “lunatics,” and promised Russia will ensure Ukraine “disappears from the map.” All his genocidal rhetoric contrasts with the hip image he once presented with his love for blogging and gadgets and a visit to Silicon Valley to be handed a new iPhone 4 by Steve Jobs.
So crazed has Medvedev seemed in recent months that it provokes Anastasia Burakova, founder of the NGO Kovcheg (The Ark), which supports Russian political refugees overseas, to joke that he “must be an American spy using his tirades to send secret information to the CIA.” Or maybe Putin wants him to say especially mad things “to make him look sensible as a way to say to the West look, I could be replaced by someone worse than me.”
And here we come full circle. Ultimately how long Putin rules will largely be determined by whether the West holds its nerve, say the Russians in Munich.
[ad_2]
#Meet #Russian #shadow #delegation #Munich
( With inputs from : www.politico.eu )
There’s more bad news for Vladimir Putin. Europe is on course to get through winter with its vital gas storage facilities more than half full, according to a new European Commission assessment seen by POLITICO.
That means despite the Russian leader’s efforts to make Europe freeze by cutting its gas supply, EU economies will survive the coldest months without serious harm — and they look set to start next winter in a strong position to do the same.
A few months ago, there were fears of energy shortages this winter caused by disruptions to Russian pipeline supplies.
But a combination of mild weather, increased imports of liquefied natural gas (LNG), and a big drop in gas consumption mean that more than 50 billion cubic meters (bcm) of gas is projected to remain in storage by the end of March, according to the Commission analysis.
A senior European Commission official attributed Europe’s success in securing its gas supply to a combination of planning and luck.
“A good part of the success is due to unusually mild weather conditions and to China being out of the market [due to COVID restrictions],” the official said. “But demand reduction, storage policy and infrastructure work helped significantly.”
Ending the winter heating season with such healthy reserves — above 50 percent of the EU’s roughly 100bcm total storage capacity — removes any lingering fears of a gas shortage in the short term. It also eases concerns about Europe’s energy security going into next winter.
The positive figures underlie the more optimistic outlook presented by EU leaders in recent days, with Energy Commissioner Kadri Simson saying on Tuesday that Europe had “won the first battle” of the “energy war” with Russia.
EU storage facilities — also vital for winter gas supply in the U.K., where storage options are limited — ended last winter only around 20 percent full. Brussels mandated that they be replenished to 80 percent ahead of this winter, requiring a hugely expensive flurry of LNG purchases by European buyers, to replace volumes of gas lost from Russian pipelines.
The wholesale price of gas rose to record levels during storage filling season — peaking at more than €335 per megawatt hour in August — with dire knock-on effects for household bills, businesses’ energy costs and Europe’s industrial competitiveness.
Gas prices have since fallen to just above €50/Mwh amid easing concerns over supplies. The EU has a new target to fill 90 percent of gas storage again by November 2023 — an effort that will now require less buying of LNG on the international market than it might have done had reserves been more seriously depleted.
“The expected high level of storages at above 50 percent [at] the end of this winter season will be a strong starting point for 2023/24 with less than 40 percent to be filled (against the difficult starting point of around 20 percent in storage at the end of winter season in 2022,” the Commission assessment says.
Analysts at the Independent Commodity Intelligence Services think tank said this week that refilling storages this year could still be “as tough a challenge as last year” but predicted that the EU now had “more than enough import capacity to meet the challenge.”
Across the EU, five new floating LNG terminals have been set up — in the Netherlands, Greece, Finland and two in Germany — providing an extra 30bcm of gas import capacity, with more due to come online this year and next.
However, the EU’s ability to refill storages to the new 90 percent target ahead of next winter will likely depend on continued reduction in gas consumption.
Brussels set member states a voluntary target of cutting gas demand by 15 percent from August last year. Gas demand actually fell by more than 20 percent between August and December, according to the latest Commission data, partly thanks to efficiency measures but also the consequence of consumers responding to much higher prices by using less energy.
The 15 percent target may need to be extended beyond its expiry date of March 31 to avoid gas demand rebounding as prices fall. EU energy ministers are set to discuss the issue at two forthcoming meetings in February and March.
[ad_2]
#Putin #staring #defeat #gas #war #Europe
( With inputs from : www.politico.eu )
The EU’s energy war with Russia has entered a new phase — and there are signs that the Kremlin is starting to feel the pain.
As of Sunday, it is illegal to import petroleum products — those refined from crude oil, such as diesel, gasoline and naphtha — from Russia into the EU. That comes hot on the heels of the EU’s December ban on Russian seaborne crude oil.
Both measures are also linked to price caps imposed by the G7 club of rich democracies aimed at driving down the price that Russia gets for its oil and refined products without disrupting global energy markets.
Those actions appear to have bitten into the Kremlin’s budget in a way other economic penalties levied in retaliation for Russia’s invasion of Ukraine have not.
The Kremlin’s tax income from oil and gas in January was among its lowest monthly totals since the depths of COVID in 2020, according to Janis Kluge, senior associate at the German Institute for International and Security Affairs.
Kluge noted that while Russia’s 2023 budget anticipates 9 trillion rubles (€120 billion) in fossil fuel income, in January it earned only 425 billion rubles from oil and gas taxes, around half compared to the same month last year.
It’s only one month’s figures and the income does fluctuate, but Kluge called it “a bad start.”
Russia’s gas sales to Europe have also collapsed — in part as a result of Moscow’s own energy blackmail — with its share of imports declining from around 40 percent throughout 2021 to 13 percent for November 2022, according to the latest confirmed European Commission monthly figure.
But it’s oil that matters most to Kremlin coffers.
On Friday, EU countries struck a deal on two price caps which will come into full force later this year following a 55-day transition period. A cap of $100 will apply to “premium” oil products, including diesel, gasoline and kerosene. A cap of $45 will be enforced on “discount” products, such as fuel oil, naphtha and heating oil.
The EU ban and the G7 price caps are meant to work in tandem. While the EU bans Russian oil, cutting off a vital market, the price caps ensure that insurance and shipping firms based in the EU and other G7 countries aren’t completely blocked from facilitating the global trade in Russian oil. They still can, but it must be under the price caps. This way — so the theory goes — Russia’s fossil fuel revenue will take a hit without disrupting the global oil market in a way that could endanger supply and drive up the price for everyone.
Squeezing the Kremlin
Russia is selling more crude to China and India to make up for the lost trade with the EU | iStock
So far, EU leaders think, it’s working.
Buyers in China and India and other countries are hoovering up more Russian crude, making up for the lost trade with Europe. But knowing that Russia has few alternative markets, buyers have been able to drive down the price. “The discounts that Russia has to give, that its partners can demand, are strong and are here to stay,” said one senior European Commission official. Russian Urals crude is trading at around $50 per barrel, around $30 below the benchmark Brent crude price.
“I think in general the EU and the G7 can be quite happy with how things have unfolded with regards to the oil embargo and the price cap up to now,” said Kluge. “There has been no turbulence on global oil markets and at the same time Russia’s revenues have gone down considerably. The key reason here is that the price which Russia receives for its crude has gone down.”
The question is whether the EU can keep up the economic pressure on Russia without harming itself in the process.
So far, at least as far as oil is concerned, it’s been plain sailing. Oil markets have proved remarkably flexible since the EU’s crude ban in December, with export flows simply shifting: Asia now takes more Russian crude — often at a discount — while other producers in the Middle East and the U.S. step in to supply Europe.
So far, it is looking likely that a similar “reshuffle” of global trade will take place with oil products like diesel, said Claudio Galimberti, senior vice president of analysis at Rystad Energy.
The nature of the oil product sanctions means that there’s nothing to stop Russian crude from being exported to a third country, refined, and then re-exported to the EU, meaning that India and other countries are becoming more important oil product suppliers to the West.
China and India, as well as others in the Middle East and North Africa, also look likely to snap up Russian oil products that are no longer going straight into Europe, freeing up their own refining capacity to produce yet more product that they can sell into Europe and elsewhere.
“There is a reshuffle of product the same way there was a reshuffle of crude,” Galimberti said.
There could still be problems, however. “Europe is not going to import Russian diesel, so it needs to come from somewhere else,” Galimberti said, pointing to two major refineries in the Middle East — Kuwait’s Al-Zour and Saudi Arabia’s Jazan — upon which European supply will now be increasingly dependent.
“If you had a blip in one of these refineries you could see a price response in Europe,” said Galimberti. But for now, after a glut of imports in advance of Sunday’s ban, “inventories of distillates are full,” he added.
“Europe is in good shape.”
[ad_2]
#Russias #oil #revenues #plunge #EUs #oil #war #enters
( With inputs from : www.politico.eu )
In the European bubble in Brussels, diamonds aren’t anyone’s best friend anymore.
The Belgian government’s reluctance to ban imports of Russian diamonds, which would hurt the city of Antwerp, a global hub for the precious stones, has outraged Ukraine and its supporters within the EU.
Ukraine has been pushing to stop the import of Russian rough diamonds because the trade enriches Alrosa, a partially state-owned Russian enterprise.
While such a crackdown wouldn’t inflict the same damage on Vladimir Putin’s economy as a prohibition on all fossil fuels, for example, the continuing flow of Russian diamonds has become a symbol of Western countries putting their national interests above those of Ukraine.
New plans for a fresh round of sanctions against Putin have now reignited the debate over the morality of Europe’s trade in diamonds from Russia.
Belgium is fed up with being scapegoated. According to Prime Minister Alexander De Croo, Putin’s ability to sell diamonds to all western markets now needs to be shut off.
“Russian diamonds are blood diamonds,” De Croo said in a statement to POLITICO. “The revenue for Russia from diamonds can only stop if the access of Russian diamonds to Western markets is no longer possible. On forging that solid front, Belgium is working with its partners.”
The West’s economic war against Russia has already had an impact. Partly because of U.S. sanctions, the Russian diamond trade in Antwerp has already been severely hit. But those rough Russian diamonds are diverted to other diamond markets, and often find their way back to the West, cut and polished.
That’s why Belgium is working with partners to introduce a “watertight” traceability system for diamonds, a Belgian official said. If it works, this could hurt Moscow more than if Washington or Brussels are flying solo.
“Europe and North America together represent 70 percent of the world market for natural diamonds,” the official said. “Based on this market power, we can ensure the necessary transparency in the global diamond sector and structurally ban blood diamonds from the global market. The war in Ukraine provides for a strong momentum.”
Sanctions at last?
Belgium’s offensive comes just when its position on sanctioning Russian diamonds is under renewed attack — not just from other EU countries and Belgian opposition parties, but also within De Croo’s own government.
According to Belgian Prime Minister Alexander De Croo, Putin’s ability to sell diamonds to all western markets now needs to be shut off | Laurie Dieffembacq/Belga Mag/AFP via Getty Images
The EU is preparing a new round of sanctions against Russia ahead of the first anniversary of Putin’s invasion of Ukraine on February 24. Countries such as Poland and Lithuania are again urging the EU to include diamonds. However, one EU diplomat said the discussion is now more an “intra-Belgian fight than a European one.”
De Croo leads a coalition of seven ideologically diverse parties. The greens and socialists within his government are pushing him to actively lobby for hitting diamonds in the next EU sanctions round.
In particular, Vooruit, the Dutch-speaking socialist party, is making a renewed push. Belgian MP Vicky Reynaert will be introducing a new resolution in the Belgian Parliament proposing an import ban.
“It’s becoming impossible to explain that Belgium is not open to blocking Russian diamonds,” Reynaert said. “We want Belgium to actively engage with the European Commission to take action.” Belgian socialist MEP Kathleen Van Brempt is pushing the same idea at the European level.
But the initiative from the socialists isn’t likely to deliver an import ban, or even import quotas, four officials from other Belgian political parties said. De Croo is now set on an international solution instead. No one expects the socialists to destabilize De Croo’s fragile Belgian coalition government over the issue of diamonds.
Even if all seven parties in the Belgian government did agree to hit Russian diamonds, there would be another key obstacle.
In the complicated Belgian political system, the regional governments would have a say as well. The government of the northern region of Flanders is against an import ban. That government is led by the Flemish nationalists, whose party president, Bart De Wever, is also the mayor of Antwerp. “Nothing will change their minds on this,” one of the Belgian officials said of the nationalists’ position.
Blood diamonds
Belgium hopes that by building an international coalition to trace Russia’s “blood diamonds” it will finally stop being seen as a roadblock to action.
The industry agrees. “Sanctions are not the solution,” said Tom Neys of the Antwerp World Diamond Centre. “An international framework of complete transparency, with the same standards of compliance as Antwerp, can be that solution,” he said.
Such a transatlantic plan would have a huge impact, according to Hans Merket, a researcher with the International Peace Information Service, a human rights nonprofit organization. “That would have much more effect than the current U.S. sanctions, which are being circumvented,” said Merket.
But the devil will be in the details. Will Belgium succeed in building a transatlantic coalition? Are consumers willing to pay more for their diamonds, or does it still risk diverting the goods to other markets where traders are less diligent?
One of the Belgian officials was doubtful of Belgium’s chances of success. If the international alliance falters, Belgium and the EU should consider moving ahead on their own to convince the rest of the world to act. “But let’s give De Croo a shot at this,” the official said.
[ad_2]
#Russian #diamonds #lose #sparkle #Europe
( With inputs from : www.politico.eu )
