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EU to further expand restrictive measures on Russia with fourth round of sanctions

The European Commission has put forth their intent on restricting trade ties and other benefits to Russia amidst the invasion carried out on Ukraine in late February this...

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15 Mar 2022, 17:57 IST
EU to further expand restrictive measures on Russia with fourth round of sanctions

The European Commission has put forth their intent on restricting trade ties and other benefits to Russia amidst the invasion carried out on Ukraine in late February this year. The repetitive efforts of Ukraine to engage in diplomatic talks with Russia have so far been failed. Hence, the EU along with the G7 consortium (Canada, France, Germany, Italy, Japan, UK, and USA) are seeking a ramp up in exerting economic pressure on the Russian Federation with the fourth round of sanctions.

Prior to this, three rounds of sanctions have been announced resulting in severing of ties of many Russian banks with the International Monetary Fund (IMF) and the World Bank (WB), and also an exit of many companies from the country.

The measures in fourth package entail:
1. Denial of most-favoured-nation status:
The European Commission is seeking to revoke the status of most-favoured-nation by cutting off the important benefits that Russia enjoys as a WTO member. Furthermore, it will also lead to a suspension of Russia's membership from IMF and World Bank along with the monetary benefits Russia get from these institutions.

2. Setting up task force: The G7 finance, justice and home affairs ministers are mulling on setting up a task force to ensure that the Russian elites or families don't enjoy the luxury. Furthermore, the access to crypto shall also be denied to avoid any circumvention from the sanctions being levied.

3. EU to partially cut-off trade ties with Russia: The EU countries have remained major importers of iron and steel from Russia and have been the source of luxury brand products for the latter. Thus, to increase pressure, the countries will impose stringent restrictions on trading with Russia. The European Commission will prohibit the import of key goods in the iron and steel sector from the Russian Federation. Moreover, the EU is a billion dollar customer for Russian-origin iron and steel products. The European Union is the largest importer of Russia's steel at 8.83 mnt in 2021, up by a sharp 58% y-o-y against 5.60 mnt in the previous calendar year.

4. Ban on investments in Russian energy sector: The European Commission is to ban all investments in the Russian energy sector, technology transfers, finiancial services and other benefits to the energy exploration and production on the Russian soil.

Meanwhile, standing in support for the Ukrainian citizens, the EU commission has announced a total financial aid package of Euro 1.2 billion for the country. Also, the first tranche of Euro 300 million has been disbursed under an emergency financial assistance.

 

15 Mar 2022, 17:57 IST

 

 

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