EU bans Russian energy investments

European Union (EU) sanctions aimed at the Russian rich have been expanded to restrict the export of luxury goods to the country, along with a ban on all new investments and technology exchanges with the country’s energy sector. 

The new sanctions prohibit new investments in Russia’s energy sector as it does the transfer of EU-made equipment and technology used for energy exploration, however there is an exemption for nuclear energy and refined fossil fuels, like gas and oil.

Other industrial restrictions include a ban on Russian steel imports worth over 3.3 billion euros annually, and Russian companies are barred from hiring EU credit rating agencies.

The consumer goods ban targets a huge array of products worth over €300 that includes, amongst other items, clothing, footwear, leather, fashion accessories, pearls, jewellery, gold, silversmith, diamonds, suitcases, handbags, purses, wallets, wigs, skincare, perfumes, as well as works of art, antiques, cutlery, porcelain, china and fine pottery.

Luxury items such as caviar, truffles, champagne, wine, vermouth and cigars over €300 are also included in the ban.

Vehicles worth over €50,000, which includes brands like Mercedes, Ferrari and Porsche are also included in the export ban as are musical instruments that exceed €1,500.

Additionally, the 27 have agreed to deprive Russia of the most-favoured nation status, whilst 893 individuals have been blacklisted.

Under the rules of the World Trade Organisation (WTO), all members grant each other this particular status, which lowers tariffs, removes trade barriers and prevents discriminatory treatment. Russia is a member of the organisation.

The bloc has invoked a national security exception to bypass the WTO provision and is now able to impose higher tariffs on Russian goods headed to the EU single market. In practice, this means all the targeted EU-made products can no longer enter the Russian market.

First mentioned by EU Commission President Ursula von der Leyen at the end of a two-day informal summit in Versailles, she called the idea a “direct blow to the Russian elite”.

Continuing she said that: “Those who sustain Putin’s war machine should no longer be able to enjoy their lavish lifestyle while bombs fall on innocent people in Ukraine.”

Luxury goods account t for more than 10 percent of EU exports according to the EU, with exports totalling more than 800 billion euros annually. More than 60 percent of EU member country exports leave the bloc.

The latest raft of sanctions approved by EU ambassadors on Monday 15^th, the sanctions will come into force after their publication in the EU’s official journal.

With the EU bans on Russian energy investments and luxury goods, Russia becomes the most sanctioned nation in the world, having amassed over 5,000 different types of penalties, according to the Castellum.AI database. That is more than Iran, Syria and North Korea and all achieved in less than one month.

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