Brussels is developing plans to use trade tariffs and capital controls to maintain financial pressure on Russia, even as Hungary decides to use its veto to prevent the expansion of the EU sanctions system, which will fail in July this year.
The European Commission has told ministers that a large portion of EU sanctions, including the freezing of 200 billion euros ($22.4 billion) of Russian assets, could adapt to a new legal framework to bypass Budapest's veto.
Hungarian Prime Minister Viktor Orban received 85% of natural gas from Russia in Central European countries and has boycotted the EU several times in Moscow. Auban's nationalist government is also one of the most friendly governments in Moscow in Europe.
In any case, Moscow and Kiev held their first direct peace talks since Russia's full-scale invasion of Ukraine in February 2022, and the recent proposals from the EU have emerged.
Representatives of Ukraine and Russia were convened today in Tukuye Istanbul. However, Vladimir Putin will not travel to Istanbul for face-to-face conversations with Volodymyr Zelenskyy.
European leaders held talks in Ukraine last weekend to put pressure on Russia to agree to a ceasefire in the early stages of talks in Istanbul. Ukraine agreed. Russia does not.
The EU adopted the 17th sanctions package against Moscow on Wednesday, aiming to stifle Russia's economy and force President Vladimir Putin to end the war in Ukraine. The plan has been signed by Budapest and will be officially approved by the European Commission next week.
Since 2022, Brussels has gradually expanded sanctions on Moscow, bans on imports of Russian oil, price caps for Russian fuels and the freeze of Russian central bank assets held in European financial institutions.
In addition to trade bans and measures targeting oligarchs and politicians, the broad economy of the Russian economy (from media organizations to aviation and telecommunications) is now subject to EU restrictions.
Under the 17th package, approximately 200 Shadow Fleet tankers have been approved. These are ships with opaque ownership, with no Western ties in finance or insurance, which makes them bypass financial sanctions.
The latest sanctions will also target what the EU calls China and Türkiye’s entities to help Russia evade the embargo. New restrictions will be imposed on 30 companies involved in the dual-use commodity trade - products with potential military applications.
"Russia has found a way to avoid obstacles imposed by Europe and the United States, so closing the faucet will grab Russia," French Foreign Minister Jean-Noel Barrot told BFM TV.
In addition to military support for Kiev, sanctions were the EU's main response to Russia's war against Ukraine. But so far, sanctions have failed to stop the war. More importantly, Russia's economy has performed better than expected since the beginning of 2022 due to high oil prices and increased military spending.
Balott admitted on Wednesday that the sanctions were inadequate. "We will need to develop further, because the sanctions so far have not discouraged Vladimir Putin from continuing his war of aggression ... We must be prepared to expand devastating sanctions that could suffocate Russia's economy once and for all."
While the 17th round of sanctions was only reached on Wednesday, EU ministers are already considering that it could undermine Putin's political influence if Ukraine's war persists.
Capital controls will aim to limit Russian funds entering and leaving, as well as trade measures such as tariffs, are two options mentioned by the European Commission in recent weeks. Capital controls can take many forms, including restrictions on foreign investment, restrictions on currency exchange or taxes on capital transportation.
The committee is also aiming to share next month's proposal that will allow Brussels to impose a ban on contracts for the new Russian gas spot market. - Delivery and payment transactions now - 2025 with European companies and the total phase to 2027.
Despite oil export restrictions, Russia still earned billions of euros from gas sales to the EU through liquefied natural gas (LNG) and Turkstream (pipelines connected to Russia through the Black Sea to Southeast Europe). Banning spot market contracts will reduce Moscow's revenue from these sources.
Brussels could also propose tariffs on enriched uranium, part of an EU effort to cut Russian fuel.
According to the Financial Times, the EU insists that these measures do not constitute sanctions and therefore do not require unanimous support for all 27 EU countries, which is usually extended.
"I think the EU cooked these potential punishments in an attempt to get Russia to agree to a 30-day ceasefire ... it was the stick they waved," said an analyst familiar with the matter.
possible. On May 1, South Carolina Republican Senator Lindsey Graham said he had pledged the promise of 72 colleagues that the bill would impose "fracture" sanctions on Russia.
Graham is a close ally of President Donald Trump.
Trump himself appears to welcome the possibility of a reconciliation with Russia, and he said in March that he was "considering" sanctions and tariffs on Russia until a peace agreement was reached with Ukraine.
"Most Russians want life back to normal and business owners are tired of the costs associated with war," the anonymous analyst told Al Jazeera. "More uneasy."
She said she doubted whether the EU's touting measures would bring Putin closer to signing a peace deal. "Just because of sanctions, and there is already a maze," she said.
Russia has been slapped in the face since the war began 21,692 sanctions - most of them individually, according to global risk platform Castellum.ai.
"It's hard to see more sanctions and other punishments that will stop the fight," the analyst said.
She estimates that Russia and Ukraine will remain in war by the end of this year 60%.