EU states are actively helping Russia genocide AND lining their pockets, says DAVID CLARK

The EU set a bad precedent in December by agreeing new exemptions allowing Russian entities and individuals involved in food and fertiliser production to receive payments and have their assets unfrozen on a case-by-case basis.

Ukraine: Inna Sovsun discusses possible Rosatom sanctions

The grim anniversary of Russia’s unprovoked attack on Ukraine should have been a moment for the European Union to demonstrate resolve and punish Russian aggression with a new and uncompromising round of sanctions.

Instead, the package arrived late and in a watered-down form following obstructionism and special pleading by a handful of countries.

The new measures, including targeted sanctions on a further 121 Kremlin-linked individuals and entities, in addition to export restrictions on sensitive dual-use technologies, are welcome enough.

But they were accompanied by serious omissions that leave significant gaps in sanctions coverage and illustrate the EU’s need for a longer-term strategy to reduce Russia’s commercial influence.

Inexplicably, the Russian nuclear sector again escaped sanctions despite its well-known links to Russia’s military-industrial complex.

Proposals to include it in the package faltered thanks to the objections of Hungarian Prime Minister Viktor Orban whose government maintains close ties with Rosatom, the Russian state nuclear energy corporation.

Last summer, after the start of Russia’s invasion, it even issued a permit for the company to build two new reactors in Hungary.

A letter written by a senior Rosatom official, and obtained by Ukrainian intelligence, shows that as recently as last October the company was working to supply Russian military units and help Russian defence manufacturers evade sanctions by obtaining restricted components.

That’s why both the US and UK included it in their own latest sanctions packages.

David Clark comment

The West needs to prevent Russia from weaponising food security, says David Clark (Image: Getty)

Another major omission is the trade in diamonds, which remains one of Russia’s top ten non-energy exports.

The concerns of one member state – Belgium – meant that expected action to close down the trade in “Russian blood diamonds” has been deferred once more.

Russia’s state-owned mining company, Alrosa, accounts for 95 percent of Russian diamond production and generates $4.2bn in revenue annually. It is headed by the son of Putin’s former chief of staff and operates as an integral part of Putin’s nexus of patronage and power.

Although the Belgian government softened its position, proposing a new tracking system to exclude Russian diamonds from the European market, progress was insufficient for an announcement to be made. This needs to be addressed in the next sanctions round.

Even the sanctions that have already been agreed have proved susceptible to Russian pressure.

The EU set a bad precedent in December by agreeing new exemptions allowing Russian entities and individuals involved in food and fertiliser production to receive payments and have their assets unfrozen on a case-by-case basis.

The move was intended to address food security concerns, especially in Africa, but has opened the way for sanctioned oligarchs and others close to the Putin regime to resume their business activities and fund Russia’s war machine.

The immediate beneficiaries of the fertiliser exception include Dmitry Mazepin, long the owner of the Russian chemical conglomerate Uralchem. Mazepin was among the first oligarchs to be sanctioned last March by the EU as “a member of the closest circle of Vladimir Putin.”

When sanctions were imposed, Mazepin ostensibly relinquished his controlling stake in Uralchem, but his interest in the fertiliser sector and apparent continuing control of the company remains clear.

He joined Putin for a televised meeting in November to discuss proposals to unblock shipments of Russian fertiliser held in European ports and has been closely involved in negotiations around the Black Sea Grain Initiative, which facilitates grain shipments from southern Ukraine.

Russia has agreed to extend the Black Sea Grain Initiative following talks with the United Nations on March 13, but only for a further 60 days.

Moscow insisted that it wanted to see "tangible progress" on a parallel agreement on Russian fertiliser exports. A key feature of diplomacy around the initiative has been Kremlin pressure to resume the export of Russian-produced ammonia via the pipeline that links the TogliattiAzot ammonia plant in southern Russia to the Ukrainian port of Odessa.

TogliattiAzot was seized by Mazepin as part of a state-approved corporate raid shortly before the start of Russia’s war last February. Allowing the company taken by Mazepin to export via Ukraine would, of course, legitimise strategic corruption and give Russia additional means to finance its aggression.

So far, Ukraine has refused to yield to Russian pressure, but the Kremlin is demanding the re-opening of the pipeline again as part of the negotiation process.

With a record 349m people experiencing acute hunger globally last year and three-quarters of African countries entirely dependent on fertiliser imports, the need to keep food and fertiliser prices down and to maintain supplies is clear.

But instead of succumbing to Russian blackmail, the West needs to prevent Russia from weaponising food security. Substitution with fertiliser from phosphate-rich Morocco, nitrogen-rich Algeria, and potash-rich Canada can help, as the world accelerates efforts to produce fossil-free fertiliser. Russia created the world’s current food-security crisis when it attacked Ukraine.

Rewarding Russia with exemptions that give it funds for food only harms the effort to weaken its ability to continue the war against its neighbour.

Metal production, Russia’s largest non-energy export earner, is another sector that benefits from porous sanctions coverage.

Russian steel is still entering the European market thanks to a loophole that allows continued trade in semi-finished products. Yet neither Rusal, the world’s second-largest aluminium producer, nor its parent company, En+, have been sanctioned.

Oleg Deripaska, who retains a significant stake in En+ has also escaped European sanctions despite his known closeness to Putin and his sanctioning in the US since 2018 for what the Department of the Treasury called “worldwide malign activities” on behalf of the Russian state.

These deficiencies can be addressed with further rounds of sanctions that will continue to be necessary in the face of Russian aggression. But what the EU and other Western partners need even more than incremental adjustments to their sanctions regimes is a long-term plan to reduce Russia’s ability to exert political influence through its stranglehold on critical products and commodities.

The success with which EU countries have broken their dependency on Russian energy in less than a year shows what can be achieved with sufficient political will.

The EU, working with the G7, should aim at nothing less than a strategic uncoupling of Western economic interests from Russian commercial blackmail. Only then will Russia begin to understand that there can be no return to business as usual.

  • David Clark was Special Adviser on Europe at the Foreign Office 1997-2001 and now works as an independent analyst specialising in foreign policy and European affairs.

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