The EU’s Newest Sanctions Package against Russia is Very Different
On Wednesday June 21st, the European Union passed its 11th package of sanctions against Russia. While previous rounds have targeted key individuals and industries within Russia in an attempt to bankrupt the Russian economy and turn Putin’s advisors against him, this newest round of sanctions imposes measures against countries that directly or indirectly support the Russian war effort. Package 11 represents the first EU secondary sanctions legislation, and a shift in the EU’s sanctions strategy towards one of tackling non-compliance.
Thus far, the EU has used economic sanctions as a tool to directly inflict economic harm on Russia in an attempt to coerce Russia into ending its war in Ukraine. By seizing Russian assets held within the EU or by EU actors, and severing access to the European Common Market, the EU has attempted to induce substantial economic harm on Russia. However, the European Union is not Russia’s only trading partner. States such as China, Iran, and Kazakhstan have remained trading partners with Russia. Therefore, while Russia is prevented from accessing Western markets for goods and services, it has been able to acquire some resources from third party states.
EU sanctions package 11 attempts to bring an end to this with secondary sanctions. Individuals and entities in countries such as China, Iran, or Kazakhstan, who actively export weapons and other goods which support the Russian war effort are the targets of package 11’s secondary sanctions. In total, the package names 71 individuals and 33 entities involved in supporting the Russian war effort from abroad. The logic of secondary sanctions is based on the idea that actors will end their support for Russia because the costs of non-compliance are now greater than the benefits of continuing to export to Russia. However, it remains to be seen how effective package 11’s secondary sanctions will be.
Before package 11 was passed, the EU did not possess a legal mechanism for secondary sanctions. Concerns over the geopolitical implications of secondary sanctions and their legal ambiguity made EU lawmakers hesitant to develop the legal frameworks that underpin secondary sanctions. Imposing secondary sanctions risks pushing third parties into the arms of Russia, given that sanctions are generally seen as a punitive or aggressive measure. This issue is most evident with China, which has towed the line between supporter of the Russian war effort and potential peace mediator. The EU is concerned that secondary sanctions that target Chinese individuals and entities could risk increasing Chinese support for Russia. Likewise, secondary sanctions are legally ambiguous given the lack of jurisdiction over the assets of individuals and entities who are targeted. Historically, the United States has attempted to assert sweeping jurisdiction over foreign assets and transactions, even in Europe. Therefore, with package 11, the EU seems to have reconciled its own concerns over the geopolitical implications and legal ambiguity of secondary sanctions.
While the effectiveness of secondary sanctions against Russia is still questionable. The decision to enact secondary sanctions on Russia signals a shift in EU sanctions policy. It adds an additional layer of complexity, and enables the EU to take advantage of a modernized sanctions mechanism to increase compliance, and ideally effectiveness.