The contents of the 12th package of EU sanctions have been revealed: a complete ban on re-exports, a blow to diamonds and tankers

In its 12th package of sanctions, the European Union included several measures that, at first glance, claim to be some kind of new word and even a breakthrough in sanctions policy. However, in fact, we are talking about an attempt to tighten and systematize the set of restrictions that the West accepted in relation to Russia before. Thus, a mandatory condition has been introduced for European exporters that does not allow the re-export of sensitive goods to the Russian Federation from other countries.

Previously, such a clause was advisory in nature, but now it must be introduced into new export contracts of EU countries by March 20, 2024. It is not necessary to enter it if the agreement involves export to “partner countries” – the USA, Great Britain, Japan, South Korea, Australia, Canada, New Zealand, Norway and Switzerland. Goods covered by the new condition are prohibited by Brussels for delivery to Russia and include: dual-use goods (chips, ball bearings, video intercoms, transistors, some parts of aircraft, helicopters and drones); aviation fuel.

According to the amendments to the sanctions regulations, exporters must provide sufficient legal remedies in agreements with counterparties from third countries in case of violation of the re-export clause. Thus, if the exporter learns of such an incident, he is obliged to inform the competent authorities of the European state where he is located. It is unclear how the mechanism for monitoring the implementation of the reservation will work in practice. There is no clarification on this matter from the European Commission yet.

As part of the 12th package, the adoption of which the press secretary of the Russian President Dmitry Peskov called “sanctions madness,” the European Union expectedly banned the direct or indirect import of diamonds and jewelry, their purchase or transfer from the Russian Federation. The embargo will be introduced gradually from March 1 to September 1, 2024. Meanwhile, according to market participants, this will lead to only one thing: flows of raw materials will go from our country mainly to India and partly to China. Despite the discounts, losses will not be fatal for Russian diamond miners.

Potentially painful, but not catastrophic measures for Moscow include the fact that, as part of the 12th package, the European Union is introducing a “strengthened” information exchange mechanism. In particular, European officials want to regulate the operation of the automatic identification system (AIS) of ships when transporting oil and petroleum products. In addition, a rule is being introduced “on notification of the sale of tankers to any third country.”

“In essence, the European Union is giving the force of a full-fledged law to its previous recommendations,” notes Nikita Maslennikov, leading expert at the Center for Political Technologies. – Russia’s partners from friendly countries have repeatedly responded to these recommendations; in particular, there were precedents with Turkey and Kazakhstan. We still face restrictions at the individual company level in China. But the question arises about the methods of control on the part of the EU and its effectiveness. Moreover, the question is rhetorical, since it is a priori impossible to establish complete control. The need to receive goods that fall under the “No Russia” principle will require additional efforts from us, in terms of building more complex transport and logistics schemes. Theoretically, it will be necessary to create shell companies in partner countries (to carry out a single trade transaction), but it is unknown whether they will agree to such a measure.”

In general, it is possible to bypass sanctions, but the task is clearly more complicated, which means it will require additional financial costs and create the ground for all sorts of disputes and conflicts in Moscow’s trade and economic relations with friendly states. This is what the European Union is counting on, our interlocutor believes.

“As for the intensified hunt for the “shadow fleet,” this is due to the EU’s intention to work on mistakes, eliminate obvious gaps and lacunae in the sanctions regime,” says Maslennikov. “We successfully took advantage of this loophole in 2022, when we acquired more than a hundred oil tankers, eliminating a number of potential risks. For example, there is no need to overpay for freight. Now, from Brussels’ point of view, the effectiveness of sanctions against Russian oil supplied by sea will increase. But, again, 100% control is impossible, as is the case with the re-export of sensitive goods.”

According to the head of the analytical department of Amarkets, Artem Deev, the mechanism for exchanging information about tankers will not yield much (their lists are already known), however, new restrictive measures are fraught with an increase in shortages in the oil market, as well as a noticeable rise in the price of raw materials. The EU cannot fail to understand this, acting largely for purely image reasons and, perhaps, hoping that the Russian “shadow fleet” will continue to ignore sanctions.

In general, as experts note, the 12th package does not contain any special surprises. It took too long to agree, and it is obvious that it is becoming increasingly difficult for Europeans to find ways to harm Russia.