EU’s Russia Sanctions Deal Falls Apart Amid Dispute Over Business Loopholes

The rest of the proposed sanctions package primarily targets companies and vessels involved in bypassing existing EU restrictions on Russia. According to a draft document obtained by POLITICO, the EU is planning to more than double the number of oil and gas tankers added to its blacklist, raising the total to 75.

However, negotiations stalled, according to two diplomats, after Latvia and Lithuania pushed to block the renewal of the “no-Russia clause.” This clause allows EU companies to continue operating in Russia while also being authorized to import and export goods that are otherwise restricted. Other countries, including Germany and France, were hesitant to address the issue at this point in time.

“It’s regrettable that we couldn’t finalize the 15th sanctions package today because Latvia and Lithuania didn’t support it,” said a fourth EU diplomat. “However, the [European] Commission has committed to considering their demand for assurances to end certain exemptions in the 16th package.”

This exemption, initially approved in December 2022, has already been extended three times. Critics argue that firms have had ample time to wind down operations in Russia.

In a parallel dispute, Slovakia is lobbying to maintain a separate sanctions exemption that permits the export of refined Russian oil to the Czech Republic. Slovakia claims the exception is necessary to keep its only refinery — owned by Hungary’s MOL Group — operational. Meanwhile, the Czech Republic has expressed its intention to end the arrangement.

The 15th sanctions package is expected to be revisited when EU foreign ministers convene on December 16.

Looking ahead, officials have hinted at the possibility of a broader and more ambitious sanctions package early next year. This could coincide with Poland assuming the rotating presidency of the Council of the EU, replacing Russia-aligned Hungary.


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