EU seeks new tool to plug sanctions loopholes amid restrictions breaches aiding Russia

The European Union is demanding governments urgently stop the illegal flow of goods to Russia amid Brussels' bid to take control of closing sanctions loopholes. In a letter from the European Commission, seen by Politico, countries were warned about the need for "immediate, concerted and firm action by all of us." The source of the publication also stated that the European Commission is studying the possibility of creating an EU body to ensure compliance with sanctions.

The letter states that exports of banned goods from the EU to non-EU countries have increased from €3 billion before the invasion of Ukraine to €5.6 billion by mid-2023. This "extremely worrying" increase makes up for the loss of legal trade in these goods with Russia before the war, the letter said.

The letter contains an order for governments to "hold accountable EU operators that have been actively undermining EU sanctions, wherever they are active", as well as to deter companies from exploiting loopholes in sanctions by publishing the "more illustrative" cases and punishments for them.

According to Politico's interlocutor, who is familiar with the negotiations, the European Commission is studying the possibility of creating an EU body to ensure compliance with sanctions, effectively taking this work away from governments.

He noted that the idea is gaining traction and could be included on Commission President Ursula von der Leyen's agenda if she is appointed for a second term that starts before the end of 2024.

In particular, McGuinness advised member countries to contact companies involved in the production of sanctioned goods to push them to more thoroughly check their supply chains for compliance with EU sanctions rules.

National authorities should share information about companies and individuals from non-EU countries that may be involved in the use of sanctions loopholes, and "exercise particular vigilance" for sanctions exemptions that could make the problem worse, the letter said.

The publication also learned that McGuinness will discuss the letter with national ministers at a meeting on sanctions on February 13.

Read also: 'Weak' 13th package of EU sanctions against Russia will not include import bans – Reuters 

In the nine months of 2023, Turkey has sharply increased its exports of dual-purpose goods to Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan and Uzbekistan. The United States suspects that through Turkey and these countries, goods subject to Western export controls are reaching Russia.

On January 12, the head of Ukrainian military intelligence Kyrylo Budanov said that Russia "is not starving" despite the sanctions.

On January 15, the head of the National Agency on Corruption Prevention, Oleksandr Novikov, said that businesses are afraid of being included in the list of international sponsors of war, which is maintained by the NACP.