The European Union is discussing a new mechanism for sanctions against third countries to help Russia bypass Western restrictions.
They will especially focus on those states that cannot explain the sharp increase in trade with Russians in key goods or technologies.
In addition, the US and the EU are considering imposing a ban on the transit of goods through Russia, reports Bloomberg.
The plans will be unveiled at the G7 leaders’ meeting in Japan later this month.
The packages of measures will be implemented separately, but coordinated. The key goal is to close loopholes in existing sanctions and combat the general circumvention of sanctions.
Numerous packages of economic sanctions imposed on Moscow after its invasion of Ukraine have hit the Russian economy but not a knockout blow, while Russia shows no signs of ending its war.
Russia’s energy revenues are close to above target despite oil price caps imposed by G-7 partners and the European Union, helping the Russian government to stabilize the budget, even after a surge in military spending.
On Friday, April 30, Russia’s central bank forecast that the economy would expand by 2% this year as the impact of sanctions wanes and GDP reaches pre-war levels by the end of 2024 much sooner than many economists had predicted.
In 2022, Russia’s GDP fell by 2.1% from the previous year, contradicting predictions at the beginning of the war that the restrictions would lead to a deep recession in the economy.
The G-7 summit will be a forum for discussing options for further pressure on the Russian economy that have worked and remain. But given that a significant part of the Russian trade and financial sectors are already under sanctions, finding new areas that will significantly limit Russia’s ability to finance its war is not easy.
The EU package, the 11th since February 2022, will largely focus on loopholes in the sanctions already in place, officials said. The proposals include a ban on the transit of many goods through Russia and a target for ships that disable navigation systems.
Earlier, the publication wrote that Russia continues to sell gold, despite Western sanctions. Little-known intermediary companies find new buyers in other countries.
Instead of the massive shipments previously heading to London, Russian gold is heading to other countries such as the United Arab Emirates, Hong Kong and Turkey, where there are no restrictions.
There have also been changes to who conducts transactions in Russia. The country’s exports were previously dominated by large lenders such as VTB Bank and Sberbank, but sanctions against them have led smaller banks to take over the role.
Source: Racurs
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