Since Vladimir Putin launched his invasion of Ukraine, Russia has been subjected to the heaviest sanctions of any country in the world.
A fossil fuel superpower, Russia is no longer able to export coal to the European Union and will soon lose 90% of its oil sales to the bloc. In the other direction, the EU has banned the export of hundreds of goods to Russia, from hi-tech military kit and semiconductors that could aid Russia’s military, to makeup, handbags and clothes that may turn a handsome profit for Russian entrepreneurs.
EU asset freezes and travel bans have been imposed on 1,239 individuals and 116 companies. The list includes Putin, his most powerful acolytes and cheerleaders in state-controlled media, oligarchs and generals, as well as some of Russia’s largest banks and arms manufacturers.
But after eight rounds of EU sanctions, the appetite for further measures is diminishing. “Member states are working on additional possible measures, but we need to see the scope, because we have adopted so much so far that the space is rather limited,” a senior EU official said. “That’s a matter of fact.”
Ukraine’s most vocal supporters in the EU think the bloc could go further. “Our sanctions are working, but our sanctions unfortunately did not bring so far the result we expected,” Lithuania’s president, Gitanas Nausėda, told reporters as he arrived at an EU summit on Thursday. “I think we have very big potential to improve our sanctions and to tighten them.”
The Baltic states and Poland have a long shopping list: a ban on liquified petroleum gas, which is used for heating and fuel, as well as ending cooperation with Russia on nuclear power. They also want to close loopholes in earlier sanctions by banning civilian drones, smartphones and speeding up an end to trade in certain metals. It seems no stone is left unturned: the group wants to ban the sale of specialist wine fridges, a luxury missed off earlier lists.
Denmark, Sweden and Finland are broadly supportive of the ideas, but a host of western European states, Germany, France and Belgium, are seen as cautious of new sanctions. Berlin argues there is little left to impose sanctions on, although German officials say they are not opposed to further measures.
One diplomat suggested some proposed sanctions risked hurting Europe more than Russia: “If we harm our own economies, and the extreme right and the extreme left, the pro-Putin forces, get into power, then Putin wins.”
Even some sanction hawks say the easy things have been done, while suggesting further steps would be symbolic, rather than a major strike against the Russian economy.
The EU is also increasingly focused on countries helping Russia’s war effort. This week the bloc imposed sanctions on three senior Iranian commanders and the company that develops the so-called “kamikaze drones” that have been used by Russia to attack Ukraine. For many insiders this was only the beginning.
“It’s an important step in order to send a political message to Iran, but also to other malign actors that would be thinking of aiding Russia’s war effort,” a second EU diplomat said, adding that further sanctions were needed to “cripple Iran’s production capacity”. The EU is also preparing tougher sanctions against Belarus, in case Alexander Lukashenko formally enters the war against Ukraine.
Speaking on Friday, the European Commission president, Ursula von der Leyen, said the EU was very concerned about “circumventions via third countries” and could now place sanctions on individuals who help Moscow evade the restrictions. “And this is a very strong deterrent,” she added.
One sore point for sanction hawks is Russian diamonds, which have been repeatedly exempt, meaning the gems can continue to be bought by Antwerp dealers. Before the invasion, Belgium was the top destination for Russian diamond imports, buying €1.8bn (£1.6bn) of them.
Some European diplomats are scathing about what they see as Belgian lobbying to protect a special interest, when every member state has been asked to make sacrifices. Belgium’s government says the trade is winding down and insists it has never blocked a ban on Russian diamonds.
The dispute briefly burst into the open last month, when a draft sanctions list included Russia’s state-owned diamond company, Alrosa, which was included because EU officials said it was supporting the Russian navy. Yet after backroom dealing, the company dropped off the list.
Much noisier opposition to sanctions comes from Hungary’s Viktor Orbán, who has criticised “Brussels sanctions”, as “primitive” and claimed they are “destroying the economies of Europe and Hungary”.
Diplomats point out that the Hungarian prime minister has agreed to every round of sanctions against Russia, which included exemptions for Hungary. Orbán sounds less confrontational in Brussels than he is talking to his voters in Hungary, say diplomatic sources. Nonetheless, even sanction hawks say he has to be taken into account and stress they will only support sanctions that preserve EU unity.
The desire to maintain unity may help explain why rising imports of Russian liquified natural gas (LNG) have gone under the radar. As Russia’s pipeline gas exports to the EU have plunged, several member states have quietly been increasing their imports of Russian LNG. Before the war, Russia was the world’s fourth-largest supplier of LNG and this year 78% of Russian LNG was bought by countries that had sanctioned Russia, according to Columbia University’s Center on Global Energy Policy. France, Spain, Belgium and the Netherlands have all increased their LNG imports in 2022, while Italy and Portugal have occasionally imported the gas, according to Columbia.
Maria Pastukhova at the E3G thinktank in Berlin said Russia remained a “very minor actor” on LNG compared with pipeline gas. She suggested the reason this trade had escaped attention was because Russia’s largest LNG producer was a private company, Novatek, which paid relatively little taxes in Russia, so could not be seen as fuelling the Kremlin’s war effort. But that is changing: from 2023, tax on LNG projects will increase to 32%, whereas previously Novatek has paid 13% taxes, according to Russian media.
As the EU wrangles over how to cope with an energy shock that has sent consumer bills soaring, even staunchest supporters of sanctions are not proposing to ban Russian LNG. “It would be very difficult to find a compromise on this,” another EU diplomat said.