For the first time, the EU introduces penalties for third countries for helping Russia to circumvent sanctions.

The European Union, as part of the 11th package of anti-Russian sanctions, on June 23 announced the creation of a phased mechanism of restrictions against “third countries” that supposedly help Russia bypass restrictions on a number of technologies and goods, including dual-use ones. Such bans will be introduced if the restrictions against individuals do not work, and cooperation with a “third country” does not give “expected results”. If the circumvention of sanctions continues to be “substantial and systemic”, Brussels intends for the first time in its sanctions practice to introduce secondary restrictions against entire jurisdictions – “exceptional, extreme measures”, follows from messages on the website of the European Council.

IN document, published in the EU magazine on the afternoon of June 23, summarizes the step-by-step procedure for transitioning to secondary sanctions against “third countries”. First, Brussels must take action against “third country operators” that facilitate the circumvention of sanctions – in particular, they will be added to the regularly updated sanctions list in Annex IV of Council Regulation EU No. Member States”. After that, the EU “will resume a constructive dialogue with the third country concerned in order to ensure that remedial measures are taken to deter other operators from similar behavior.”

Then the European Council (the highest political body of the EU, consisting of the heads of state and government of the members of the union. – Note “Vedomosti”) is informed about the results of interaction with the “third country”. If they are found to be unsatisfactory, “The Union should be able to take further action.” “As a last resort, it is advisable to introduce the possibility of restricting the sale, supply, transfer or export of sensitive dual-use goods and technologies or goods and technologies that contribute to strengthening the military, technological or industrial potential of Russia or to the development of the Russian defense and security sector,” the document says. .

It is noted that decisions to include a “third country” and targeted goods or technologies in the scope of this measure “must be taken by the Council unanimously.” “Before a proposal for these extreme measures is presented to the Council, the High Representative of the Union for Foreign Affairs and Security Policy and the European Commission will inform the Council of the technical details, of the information measures taken and of the enforcement measures,” the document says.

“Coercive” measures may be taken if the EC considers that previous targeted sanctions against persons from this jurisdiction, according to data on trade with these countries, as well as interaction with this country, “were ineffective”. Nevertheless, the EU intends to give the “third country” a chance to eliminate the violations to the last and consider the options proposed by their governments to correct the situation.

As early as mid-February 2023, a study by the European Bank for Reconstruction and Development (EBRD) stated that rapidly growing trade flows from post-Soviet countries, in particular those members of the EAEU, to Russia indicate evasion of anti-Russian sanctions. The fact that the EU has developed a punishment mechanism against “third countries” that help Russia to circumvent restrictions was reported by Bloomberg, citing sources in mid-May.

Press Secretary of the President of Russia Dmitry Peskov did not comment on June 23 to journalists about the possible consequences of the 11th package of EU sanctions that came into force. The Russian Foreign Ministry said that the European restrictions are a continuation of “an attempt to put pressure on Russia through unilateral restrictive measures” and called the actions of Brussels “illegitimate, undermining the international legal prerogatives of the UN Security Council.

In response, Moscow applied a series of personal sanctions. As the Foreign Ministry explained on June 23, a number of representatives of law enforcement agencies, commercial and EU government organizations involved in the supply of military equipment, equipment for the Ukrainian army, training its military personnel, providing intelligence, logistics, etc. are prohibited from entering Russian territory. It also banned the entry of those “responsible for imposing sanctions” against Russia and “trying to undermine Russia’s relations with other states,” the Foreign Ministry said.

This is the first such story in the EU when one of the states is exposed to new risks in connection with the transit of goods to Russia, but in fact Brussels has already joined similar regimes within the UN against the DPRK and Iran, recalls BGP Litigation partner, an expert in the field of international law Sergey Glandin. The punishment of “third countries” that help Syria and Iran is already provided for by the legislation of Great Britain and the United States, the lawyer continues. “What we have now in the case of the EU is at least the threat of putting a “toxic” label on a number of CIS and EAEU countries, which may limit cooperation with them for other world players,” Glandin said.

He notes that such an idea was considered by the European bureaucracy for a long time, but the collegial principle of decision-making in the EU slowed down the coordination of such a mechanism, since a number of countries of the union are not interested in it. Theoretically, such measures against specific “third countries” will also be taken as long as possible, Glandin believes. “In general, Brussels has created only a mechanism so far. There are no countries. This is such a hint – stop practices that we don’t like, ”says the lawyer.

The European Union has embarked on the already tried and tested “American” path of secondary export sanctions against entire jurisdictions, such as the “Caesar law” against Syria, for example, says Alexei Ispolinov, Doctor of Law, an expert in international economic law. The fact that this mechanism is being introduced is a recognition of the ineffectiveness of previously introduced export restrictions, the lawyer believes.

The trend in the application of sanctions over the past 20-25 years has been to avoid punishing countries for helping sanctioned jurisdictions to punish individuals, says Ivan Timofeev, director of the Russian International Affairs Council. According to him, this gave the Europeans more flexibility – to punish specific perpetrators of the circumvention and at the same time not spoil political relations with these countries. There were still alternative mechanisms for punishing an entire jurisdiction in Western practice, for example, they were used by the Americans, who linked assistance in circumventing sanctions with the suspension of military and financial assistance to a particular country. But the Europeans, having much weaker leverage here, were forced to resort to the threat of tightening export controls against certain jurisdictions, Timofeev concludes.

Vedomosti sent inquiries to the economic and trade ministries of Armenia, Kazakhstan, Kyrgyzstan, Uzbekistan, Azerbaijan, Tajikistan, and Georgia.