EU announces 18th sanctions package against Russia

European Commission President Ursula von der Leyen and EU High Representative for Foreign Affairs and Security Policy Kaja Kallas held a joint press conference in Brussels, Belgium, regarding sanctions against Russia. Von der Leyen and Kallas announced the proposal for the 18th sanctions package, which is prepared against Russia and will begin to be discussed by EU countries this week.

Von der Leyen stated that they want peace in Ukraine, but despite weeks of diplomatic efforts, Russia continues to bring death and destruction to Ukraine. Expressing that they want to increase the pressure on Russia for this reason, Von der Leyen said, "Sanctions have deeply affected the Russian economy. The Russian Central Bank's 210 billion euros in reserves are frozen. Russia's oil and natural gas revenues have fallen by 80 percent compared to pre-war levels. The budget deficit has skyrocketed. Interest rates are extremely high and inflation is rising above 10 percent."

Emphasizing that the war must end and that Russia must sit at the negotiating table in a serious manner to establish peace, Von der Leyen said, "We are proposing the 18th sanctions package in this direction. The main targets of these tough sanctions are the Russian energy sector and the Russian banking sector. We are expanding export bans and controls, and we are also strengthening measures against the circumvention of sanctions."

"WE PROPOSE LOWERING THE OIL PRICE CAP"

Addressing the measures in the energy field first, Von der Leyen said, "For the first time, we are proposing a ban on transactions related to the Nord Stream 1 and Nord Stream 2 natural gas pipelines. This means that no EU operator can engage in direct or indirect transactions related to the pipelines. There is no going back. Furthermore, we propose lowering the oil price cap from 60 dollars to 45 dollars. After this limit came into effect in 2023, oil prices fell and prices are hovering quite close to the current limit. By lowering the cap, we are adapting to market conditions and maintaining its effectiveness. Oil exports still account for one-third of Russia's state revenues. We need to cut off this source of income."

Von der Leyen announced that in addition to the 342 ships already on the blacklist that Russia uses for oil shipments, they will also add 77 more ships from Russia's shadow fleet to the list in the sanctions package.

"WE PROPOSE APPLYING THE BAN TO 22 MORE RUSSIAN BANKS"

Stating that the second area targeted by the new sanctions package is Russia's banking sector, Von der Leyen said, "We propose transforming the current SWIFT system ban into a full-scope transaction ban, and we propose applying this ban to 22 more Russian banks."

Von der Leyen also said they proposed extending the transaction ban to financial intermediaries and institutions in third countries that finance trade with Russia. Von der Leyen stated that the third pillar of the new sanctions package consists of new export bans worth more than 2.5 billion euros. Von der Leyen said, "This ban will deprive the Russian economy of critical technology and industrial products. Among the products we are targeting are machinery, metals, plastics, and chemicals. These are used as raw materials in industry. We are also restricting the export of dual-use goods and technologies used in the manufacture of drones, missiles, and other weapons systems."

Von der Leyen said the fourth and final pillar of the sanctions package is to expand the scope of the existing transaction ban to ensure better implementation of sanctions. Von der Leyen said, "We are adding 22 Russian and foreign companies that provide direct or indirect support to Russia's military and industrial complex to the list."

"SANCTIONS ARE WORKING"

Kallas said the sanctions package aims both to support Ukraine and to increase pressure on Russia. Emphasizing that the new package targets Russia's energy revenues, shadow fleet, military industry, and banking sector, Kallas said, "We are doing all this because sanctions are working. Every sanction weakens Russia's ability to wage war. Russia wants to make us believe that it can continue this war forever, but that is not true. Russia has lost tens of billions of dollars in oil revenue, its economy is shrinking, and its gross domestic product is in decline."

Kallas stated, "Sanctions applied to the shadow fleet have been particularly effective. After the 17th sanctions package, Russian oil exports via Black Sea and Baltic Sea routes decreased by 30 percent in just one week. In May alone, Russia's sovereign wealth fund fell from 42 billion dollars to 36 billion dollars, a decrease of 6 billion dollars. There is a risk that this fund will be depleted next year."