The European Union is planning for the first time to impose sanctions against several companies in mainland China and other countries, including Turkey, India and Serbia, for helping Russia circumvent sanctions and buy dual-use goods, POLITICO reports.
Ever since Chinese President Xi Jinping and Russian President Vladimir Putin declared a “no-limits friendship” between the two nations, reports have piled up – including this POLITICO investigation – about China helping Russia circumvent sanctions.
According to the draft proposal, Brussels is preparing to impose sanctions against four Chinese organisations it believes are helping Moscow buy European dual-use goods. Two senior diplomats confirmed to Playbook POLITICO these plans.
The bloc wants to wrap up discussions on a 13th package of sanctions against Russia before 24 February, which marks two years since the start of the military conflict in Ukraine. The European Commission also called on national governments to take “concerted action” to tighten the sanctions.
At a summit in Beijing in December, EU Council President Charles Michel notified Xi Jinping that the European Commission had compiled a list of companies suspected of supplying Russia with dual-use goods – which can have both military and civilian applications.
If EU countries add the four names to the bloc’s dual-use sanctions list, European firms will be banned from doing business with them.
The list also includes one company in Kazakhstan, one in Thailand, one in Turkey, one in Sri Lanka, one in India and one in Serbia, as well as 11 other companies in Russia, totalling 21 new companies.
In an attempt to stop Russian military production, the EU and G7 allies banned their companies from exporting dual-use goods such as microelectronics or even ball bearings. However, middlemen in other countries such as the United Arab Emirates, Serbia, Kazakhstan and China quickly emerged to sell large quantities of these European goods to Russia.
A study by the sanctions group of the KSE Institute, a think tank at the Kyiv School of Economics, found that companies from China and Hong Kong became the most important intermediaries in supplying “battlefield technologies” subject to Western sanctions. However, it was US companies that topped the list of original manufacturers.
So far, the EU has not directly blamed China, as EU countries such as Germany have urged Brussels to abandon plans to impose sanctions on third countries helping Russia.
While under the new proposal the EU would only sanction companies that actively undermine sanctions, it would be the first time the EU has imposed sanctions on mainland Chinese companies – which would happen if the 27 EU governments approve the new sanctions package this week.
Diplomats from EU member states discussed the plan at a so-called Relex meeting on Monday. Permanent representatives will try to agree on the list on Wednesday.
