Just days after the second anniversary of Russia’s invasion of Ukraine, the European Union approved its 13th package of sanctions against Russia to disrupt the country’s economic activity and hinder its continued ability to fund the war. This iteration of sanctions does not entail as sweeping economic restrictions as previous packages, yet the implications stand to be much greater than previous efforts. The new sanctions focus on preventing Russian procurement and manufacturing of military equipment and weaponry.
The focus of this sanctions package is to tighten restrictions on the trade of electronic components with Russia, particularly those considered dual use for commercial and military purposes, such as components needed for drone manufacturing.
The U.S. also issued a new set of export controls and sanctions hindering Russian manufacturing. Targeting over 500 individuals and entities, this was the largest-ever U.S. sanctions package aimed at Russia. While the EU sanctions package aims to limit the trade of components that can be used for defense purposes, the impact of the U.S. package is more widespread. It does not limit the restrictions to dual-use components, but instead targets any component or product that could ease or enable the Russian war efforts in Ukraine. It targets nearly 90 companies from Russia, China, India, Kyrgyzstan, South Korea, Turkey, and the United Arab Emirates.
Non-Russian entities linked to the export or transport of weapons to Russia were also sanctioned, including those from Belarus, China, Finland, Germany, Ireland, Kazakhstan, Kyrgyzstan, Liechtenstein, Turkey, Serbia, the UAE, and Vietnam. Further, the U.S. sanctioned Sovcomflot, Russia’s largest shipping company, with the aim of further reducing Russian oil revenue.
Latest round of sanctions aims to disrupt Russian manufacturing
In this latest round of EU sanctions, 27 companies were added to the EU Annex IV list, which bars European firms from selling dual use goods to listed companies. Most of the companies are Russian, with the exceptions of four companies registered in China and one company each in Kazakhstan, India, Serbia, Thailand, Sri Lanka, and Turkey. These companies were accused of circumventing EU sanctions and exporting restricted dual-use items into Russia.
Within the EU sanction’s framework, dual-use advanced technology items that could aid in Russian military advancements include electric transformers, static converters, inductors, and aluminum capacitors. These were added to the 50 Common High Priority Items List, a joint effort between the EU, U.S., Japan, and the UK to identify and prioritize items with a heightened risk of being obtained by Russia for use in military contexts. Though all items on the list are considered critical, the further down the tiers the items are, the less of a priority they have to the countries involved in comparison to those at the top tier.
The U.S. sanctions package targets Russian manufacturing with a particular focus on electronics components. Sanctions specifically target 70 technology and electronics companies that provide advanced software and manufacture semiconductors and optical and radar equipment. In addition to this, the U.S. extended its prohibition of Russian diamond imports to include diamonds that were mined in Russian and have been processed outside of the country.
Further, the UK has now joined the list of partner countries that have blocked iron and steel imports from Russia, compounding the effects of US and EU sanctions packages on Russian manufacturing. On February 22, the UK also designated sanctions on more than 52 individuals and entities for having connections to Russia’s invasion of Ukraine. In addition to the restrictions on iron and steel, these sanctions target key sources of Russian revenue in the trade of diamonds, metals, energy, and munition.
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