EU states push against ‘no Russia clause’ in sanctions package.

According to six sources, the European Union (EU) nations are taking a firm stance against some aspects of the most recent proposed package of sanctions against Russia. These aspects include the so-called “no Russia clause,” retaliatory financial constraints, and the enforcement of sanctions on items intended for direct personal use.

Additionally, the package, which would be the bloc’s 12th since Russia invaded Ukraine in February 2022, aims to narrow additional loopholes on sanctions circumvention. This would be the bloc’s 12th package since Russia.

On the other hand, several member states, whose identities the sources did not reveal, have expressed their opinion that the new plan is comprehensive, would harm the EU’s international trade, and would ultimately fail to achieve its goals.

This week, during a conference of ambassadors, countries expressed their concern that Article 12 G of the plan, which has been called the “No Russia clause,” could cause widespread disruption for European businesses worldwide, according to people involved with the discussions.

Based on the ideas discussed at the conference, the sources stated that EU exporters would be compelled to include a re-export restriction to Russia for all commodities in the Commission’s list of custom codes. This list includes more significant things used daily than those applicable to Russia’s military.

One person stated, “A small entrepreneur in Brazil would have to fulfill contracts in such a complex system… the discussion should be focused on highly critical goods,” they all declined to be named due to the sensitive nature of the negotiations. “The discussion should be focused on highly critical goods,” the source said.

According to three sources, the version of the plan presented on Tuesday included an additional amendment that exempted the use of sanctioned items for personal use from this most recent package. This is because the use of such goods has become a source of abuse at Russia-EU crossings ever since the previous packages came into effect.

Personal goods that can be resold are confiscated by border guards whenever people of any nationality exit Russia and cross the border into the United States. Based on a sanctions list that includes products that may be used as “potential revenue” for Russia, they justify the actions that they have taken.

Two of the individuals stated that products such as toothpaste were also being taken, which led to the attempt to develop a provision for items that are used for personal purposes. The European Union Commission has recognized this is happening with expensive items such as automobiles.

According to one source, most countries that attended the ambassadorial meeting of the 27-member bloc did not support the proposed measures requiring EU authorization for “any transfer of funds” by a Russian entity or Russian national residing in Russia outside of the EU. These measures were criticized as being pointlessly burdensome because they did not have thresholds below which a transaction would be exempt from the requirements. Another report stated that “many” countries raised objections.

Since the bloc is waiting for the G7 to provide its technical direction, which is anticipated to take place within the next few weeks, the fundamental components of the proposed package, which include an indirect ban on Russian diamond imports and modifications to how the Group of Seven (G7) Russian oil price ceiling may be implemented more effectively, have not been actively addressed.

The European Union and the Group of Seven are working to restrict the trade of Russian oil by setting a crude oil price ceiling of sixty dollars a barrel. Even though it was successful for some time, Western nations reported that Russian oil earnings were increasing due to a growing “shadow fleet” of tankers consisting of older Western ships.

The European Union (EU) is considering including liquefied petroleum gas (LPG) and some metals products on its list of prohibited goods that will be included in the 12th package. Initially, the plan called for a wind-down duration of three months for the commodities; however, the most recent version of the proposed packaging increased the wind-down period to one year for some iron products and LPG.