On June 21st, the European Union was able to agree on its 11th sanctions package against the Russian Federation over its illegal invasion of Ukraine. The package, unlike the previous 10, focuses on the commercial, personal, and military transit of non-EU countries through Russia.

The package is aimed particularly at Central Asian countries, such as Kazakhstan and Kyrgyzstan, but also Turkey and China, due to their prominent technological, commercial, and military reliance on Russia. It attempts to put further pressure on countries helping Russia circumvent Western sanctions, as reports emerge regarding Russia’s increasing ability to do so.

One feature of this sanctions package was the opposition from Hungary and Greece, who submitted their objections to the European Parliament. The package was submitted for review and negotiation back in April, but the two countries’ objections were holding it up.

Their objections were not related directly to the package, but rather to the conflict itself. Ukraine had listed some Greek and Hungarian companies as “sponsors of war,” limiting the companies’ ability to conduct business in Europe. The companies allegedly conducted business activities in Russia, which Ukraine argues helped contribute to the prolongation of the war.

Five Greek shipping companies and the OTP Bank in Hungary were listed. Ukraine alleges the companies were using third-country activities to bypass Western sanctions against Russia.

The Hungarian and Greek companies’ activities with Russia were condemned by German Foreign Minister Annalena Baerbock, who claimed that the countries were “playing in Russia’s war in Ukraine” by holding up the deal for national commercial interests. She also alleged that the Hungarian OTP Bank recognized Luhansk and Donetsk as Russian territories and given credit lines to Russian soldiers. OTP Bank expresses support for Ukraine in public communiqués.

EU officials, including European Commission President Ursula Von der Leyen, argue that sanctions should be put on companies from countries that conduct import-export business with sanctioned Russian companies and officials. The push comes after reports put forth by US officials that foreign companies, including European and Chinese companies, are providing Russia with technological equipment through third-country sales.

The Ukrainian government, in a request from the EU and Greece, removed the targeted Greek companies from its sponsors of war list. The removal led Greece to approve the new sanctions package, leaving only Hungary in the deal’s path.

However, Ukraine refused to remove the OTP Bank from its list, though Hungary ultimately decided to approve the sanctions package. It is unclear whether the approval is due to Hungary’s agreement with Ukraine on the listing. Hungarian diplomats proposed that they would bring Ukraine’s sponsors list for upcoming negotiations regarding further military assistance to Ukraine.

It is noteworthy that none of the companies diminished their commercial activities with Moscow in reaction to the listing as sponsors of war.

Given the increasing commercial and military relevance of non-EU and non-NATO countries, sanctions and military-humanitarian assistance packages may continue to be held up by geopolitical quarrels.

The blockages, creating foreign policy dilemmas, may lead to more pressure on companies to comply with national geopolitical goals, or may lead the EU and NATO to be more flexible with states with closer ties to Russia, China, and other adversaries.

The London Politica Sanctions Project