What is in the EU's 18th package of sanctions against Russia?

The details of the 18th package of sanctions against Russia for its war in Ukraine are listed below. This package was approved by the European Union on Friday, and is aimed at further damaging Russia's energy and oil industry.

OIL PRICE CAPTABILITY

The package includes a price cap for Russian oil, which is intended to reduce Moscow's revenues from energy without disrupting the global markets.

EU diplomats have said that the EU will set a price cap for Russian crude oil at 15% less than its average market value.

This means that the cap is currently around $47.60 a barrel, which is well below the $60 limit the Group of Seven Major Economies has been trying to impose from December 2022.

The measure is designed to prohibit the trade of Russian crude purchased at higher prices by preventing shipping, insurance and reinsurers from handling tankers that carry such crude.

The European Union (EU) and Britain are pushing the G7 group to lower the cap, since the oil futures have fallen so much that the $60 cap is largely irrelevant.

The United States, however, has refused to comply, and the EU is left to implement the measure on its own. However, this is only possible with limited powers, as oil is mostly traded in dollars for which U.S. banks control payment clearing.

SHADOW FLEET & ENERGY TRADING

EU diplomats have announced that the EU will no long import petroleum products made with Russian crude. However, this ban does not apply to imports coming from Norway, Britain or the U.S.

The EU also sanctioned India's Nayara refinery, whose main shareholder is Russia's Rosneft. Additional 105 vessels will be banned from entering EU ports, locks or transferring oil ship-to-ship. This is to close down the "shadow fleet" (older oil tankers) that were used to transport Russian crude oil and to circumvent sanctions. According to a press statement, the EU has also sanctioned a private operator who operates an international flag registry as well as a captain on a shadow fleet vessel.

The EU has sanctioned more than 400 ships in the shadow fleet.

NORD STREAM

All transactions relating to the Nord Stream pipeline project, which runs under the Baltic Sea, will be prohibited. This includes any goods or services provided to this project.

SECTOR FINANCIAL

The EU will prohibit all transactions with Russian financial institution - which are already excluded from SWIFT, the global financial messaging system.

The Russian Direct Investment Fund, as well as any investments it holds, will be included in the ban.

The aim is to further restrict Russia’s access to foreign exchange and international financial markets.

The EU also agreed to lower their thresholds for further sanctions against foreign financial and lending institutions that undermine sanctions or support Russia’s war effort, for example by circumventing oil price caps.

EXPORT BANS, NEW BLACKLIST ENTRIES

Diplomats have said that the EU will add 26 new entities to its blacklist for circumventing sanctions. These include seven entities in China, Hong Kong, and Turkey.

The list of goods that EU countries can't export to Russia now includes a number of chemicals and plastics, as well as items of machinery.

DELAYED APPROVAL

This is the 18th package of sanctions against Russia since Moscow invaded Ukraine on a large scale in 2022. The approval was delayed for weeks due to repeated vetoes from Slovakia and Malta. Slovakia demanded guarantees to protect it from potential losses resulting from a separate EU ban on imports of Russian Gas by 2028. It only dropped its veto after Prime Minister Robert Fico stated that it had done all it could. (Reporting and editing by Kevin Liffey, Frances Kerry, and Kate Abnett)

(source: Reuters)