European Union sanctions spare Russian oil

The European Commission has proposed its latest batch of sanctions on Russia, targeting Russian trucks and ships’ access to European ports, $4 billion of coal, and $6bn of construction materials, caviar and vodka, but stopped short of blocking purchases of Russian oil and gas.

The bans also include $ 10 billion worth of exports of machinery and parts to Russia, including semiconductors and equipment for LNG production.

The measures are still to be ratified by the 27 member states, with disagreements over oil and gas sanctions remaining between some who fear repercussions on European energy markets.

The European Union is banning imports of coal, wood, chemicals and other products worth about 9 billion euros ($ 9.86 billion) a year, an EU source told Reuters.

The European Union is also to propose a ban on exports to Russia worth another 10 billion euros a year on goods like semiconductors, computers, technology for LNG gas and other electrical and transport equipment, the source said.

Russian vessels and trucks would be prevented from accessing the EU, further crippling trade, the source said, with exceptions made for energy products, food and medicines.

The 27-country European Union would also ban all transactions with VTB (VTBR.MM) and another three Russian banks which have already been excluded from the SWIFT messaging system, the source said, while dozens more individuals, including oligarchs and politicians, would be added to the EU’s sanctions list.

The ban on coal, if approved by European Union states, would be the first on any energy import from Russia adopted by the bloc since Moscow launched what it calls a “special operation” in Ukraine on Feb. 24.

The commission had proposed such a ban in January should Russia invade its neighbour, but EU sources told Reuters it was blocked by Germany, the EU country most reliant on Russia coal. read more

A German government source told Reuters Germany would support a phased EU embargo on Russian coal imports.

As a comparison, the European Union imported about 100 billion euros’ worth of oil and gas from Russia last year. Sources said the union was working on measures on oil and gas but has not made any decisions yet.

Import bans applicable immediately have been published in the EU’s official journal, with winding-down periods whose length is still to be decided, the source said.

Crippling trade

The European Union has already approved four rounds of sanctions, including freezing assets of the Russian central bank and the new measures are intended to further cripple trade with Russia.

They would stop the transport of goods by road and sea, with the exception of critical imports including gas and oil. The European Union has already banned air traffic with Russia.

Applying some sanctions may be complicated, officials have repeatedly said, because it is not always easy to identify the origin of a cargo ship.

Bans on importing wood, cement, rubber and chemicals from Russia, plus high-end foodstuffs including caviar and spirits such as vodka will also be proposed, together worth about 5 billion euros a year, the source said.

Including about 10 billion euros from the planned ban on technology exports to Russia, the new restrictions would reduce the value of trade between the European Union and Russia by at least 20 billion euros a year, the source said.

($1 = 0.9123 euros)