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The European Commission has proposed a fifth sanctions package against Russia for its invasion of Ukraine, which calls for a ban on Russian coal imports into the European Union. The aim is also to prevent Russian sea and road carriers from using EU ports and roads or to further reduce the import of important products from which the Russian regime derives significant revenue. The 27 will also freeze trade with four major Russian banks that have not yet been subject to European sanctions.
The proposal will be discussed by member state representatives on Wednesday and, if approved, the sanctions are expected to come into force this week. In addition, the EU will expel an unknown number of diplomats from the Russian representation to the Union.
“We have all seen the horrific pictures of Bucha and other areas where Russian troops have recently withdrawn,” Commission President Ursula von der Leyen recalled of the images of the corpses and mass graves of Ukrainian civilians. According to her, the regime of Russian President Vladimir Putin is continuing a cruel and ruthless war, and the EU must further increase the pressure on Moscow at this critical moment.
Therefore, Brussels proposes to add new measures to the current four packages aimed at reducing the resources of the Putin regime. According to the EU chief executive, a major step is to ban coal imports, which will deprive Moscow of four billion euros (97.4 billion crowns) a year. This measure, unlike the oil or gas embargo, enjoys the support of almost all EU countries, including Germany. However, it is not yet certain of the precise date when it could start to apply.
“I think it could be one of the first raw materials that the European Union would give up,” said Czech Finance Minister Zbynek Stanjura, who discussed new sanctions with his EU colleagues. Obtaining unanimous support for a Russian oil or gas embargo will be more difficult, according to Stanjura, although under the impression of the brutality of Russian aggression, the attitude of some states is gradually changing. Germany, Austria and Hungary in particular are opposed to a complete cut off from Russian oil or gas.
According to the Commission’s proposal, the Union will also ban Russian companies from applying for public contracts in member countries.
The EU also plans to freeze all transactions and other contacts with four major Russian banks, including the second largest bank, VTB. These banks represent a quarter of the Russian banking market. Although the Union has in the past approved their exclusion from the SWIFT international payment system, it has not yet introduced direct sanctions like the United States or Great Britain.
The new measures are intended to affect, for example, imports of wood or cement, but also certain foodstuffs and alcohol from Russia. Its treasury should still lose 5.5 billion euros. The export of advanced technologies such as certain semiconductors and quantum computers is to be limited, which is believed to slow down Russian technological progress.
EU foreign policy chief Josep Borrell said the aim of the whole package was “to further cripple Putin’s war machine”. According to him, in addition to Russian aggression in Ukraine, the 27 also respond to violations of diplomatic principles by Russian officials in embassies to the EU and in member states. Borrell therefore ordered that certain personnel of the Russian diplomatic mission to the EU be declared undesirable. He did not specify their number, the summoned Russian ambassador must know the details.
Germany and Poland import most coal from EU countries
Russia has long been the third largest coal exporter and the European Union is one of its main customers. According to the US government energy agency EIA, it exported 237 million tons of coal last year, the largest export market is China, which accounts for a quarter of Russia’s coal exports, and total exports to EU countries are only slightly lower. According to the EU statistical agency Eurostat, Germany was the biggest importer of Russian coal in 2020, followed by Poland and Italy.
Meanwhile, Polish Prime Minister Mateusz Morawiecki announced last week that his country plans to stop importing Russian coal by the end of May. German Economy Minister Robert Habeck announced in March that Berlin could get rid of its dependence on Russian coal by the fall. Today, the European Commission proposed a fifth sanctions package against Russia for its invasion of Ukraine, which, among other things, envisages a ban on Russian coal imports into the European Union.
Coal imports from Russia to EU countries in 2020 (million tons):