In A First, EU Sanctions Chinese Firms Supplying Drones & Military Equipment To Russia

The European Union has approved its 15th sanctions package against Russia, focusing on its shadow tanker fleet and Chinese companies providing drones to Moscow.

These measures are taken to weaken Russia’s economy and disrupt its military operations as the war in Ukraine continues.

The Hungarian presidency of the EU confirmed that the sanctions target vessels from third countries helping in Russia’s oil trade and several entities supplying technology to support its military.

This package will add approximately 45 to 50 tankers, 30 entities, and over 50 individuals to the EU’s sanctions list.

The new measures aim to restrict ships involved in transporting oil and fuel for Russia while evading international sanctions. Reports reveal that Russia is using a “shadow fleet” of aging vessels to bypass the G7-imposed price cap on crude oil exports.

These ships operate outside international regulations, allowing Moscow to continue profiting from its energy trade despite global restrictions.

Currently, around 600 to 800 such vessels are believed to be operating, with China and India being the largest buyers of Russian oil. Analysts estimate that Russia earned approximately $500 billion from oil exports between 2022 and mid-2024.

For the first time, the EU will target Chinese companies allegedly involved in supplying drones and military equipment to Russia. Among the firms listed is one based in Hong Kong.

The package also builds on existing sanctions, which already apply to over 2,300 individuals and entities. These measures include asset freezes, travel bans, and restrictions on financial transactions within the 27-member bloc.

The package includes a six-month extension for the Czech Republic to continue importing Russian oil products via Slovakia. This exemption was negotiated during discussion, with the final package delayed by political manoeuvring among member states.

The sanctions package will be formally adopted during a meeting of EU foreign ministers on December 16. European Commission President Ursula von der Leyen welcomed the agreement, particularly its focus on the shadow fleet, calling it a step forward in disrupting Russia’s ability to finance its war in Ukraine.

Since February 2022, the EU has imposed several rounds of sanctions targeting Russia’s energy sector, banks, and major industries. These measures also include penalties on President Vladimir Putin, Russian lawmakers and key allies.

Although the EU has intensified its efforts, the shadow fleet remains a serious challenge. Hungary which currently holds the rotating EU Council presidency, has passed only one sanctions package during its term.

Analysts expect stricter actions under Poland’s leadership beginning January 2025.

Additionally, ten EU countries have called for new restrictions on Russia’s natural gas, aluminium, and nuclear fuel trade starting in 2025. This could further impact Russia’s ability to sustain its economy and military capabilities.

Reference: Reuters, AP News

Source: Maritime Shipping News