EU Parliament Calls for a Complete Ban on Russian Fossil Fuel Imports

In a resolution adopted on 09 November, members of the European Parliament (MEPs) have expressed concerns about loopholes in the European Union (EU’s) sanctions against Russia. MEPs acknowledge the scope of the EU’s sanctions, yet are worried about the inadequate enforcement and efforts to weaken Russia’s economic and industrial power, affecting its warfare abilities.

Special attention is given to Russia’s adeptness in evading restrictions such as the EU’s oil sanction price cap and the Price Cap Coalition. The resolution also highlights the significant increase in EU imports of petroleum products produced with Russian oil through countries like India, establishing an alternative channel for the Kremlin’s oil access to the EU, as per the European Parliament press release

Moreover, the essential Western Components are still making their way to Russia through countries including China, Turkey, the United Arab Emirates, Kazakhstan, Kyrgyzstan, and Serbia.

Despite restrictions, the EU remains a major client of Russian fossil fuels including pipeline gas and LNG, with exceptions allowing the import of crude oil and oil products.

Resolution to close EU market for Russian fossil fuels

MEPs have called Europe to enhance centralized oversight of sanctions enforcement and to establish a system to monitor and prevent evasion.  Furthermore, they have emphasized the need for the EU to ensure the implementation of existing sanctions on Russian oil exports, ensuring the closure of the EU market on Russian fossil fuels, and imposing sanctions on the leading Russian oil corporations, including Gazprombank, their affiliated companies, and their executive boards.

The resolution encourages the EU to cooperate with G7 to substantially reduce the price cap for Russian oil and petroleum products. Additionally, it suggests a complete ban on the import of Russian LNG and LPG, as well as on imports of fuel and other petroleum products from non-EU countries, if they are derived from Russian oil.

The parliament has also urged the EU to prohibit the transportation of Russian Oil and LNG through EU territory and to impose limitations on the price and quality of EU imports of fertilizers from Russia and Belarus.

MEPs have further requested to expand sanctions by implementing a complete ban on the trade and cutting of diamonds originating from Russia or imported from Russia to the EU. They have also proposed that the EU should consider examining the legal channels to facilitate the seizure of frozen Russian assets and their utilization in Ukraine’s reconstruction.

G7 countries have considerably increased their AML defenses after the Russia-Ukraine war, to assist with sanctions compliance and prevent circumvention. Just recently, the United Kingdom has passed the Economic Crime and Corporate Transparency Act which aims to make registration of businesses to companies more transparent. In one way, the new law has also made it easier to identify and track any business’s links to any sanctioned jurisdictions due to the availability of information. Moreover, in June 2022 and May 2023, FinCEN and BIS warned financial institutions to stay alert to any attempts made by Russia to avoid US export laws. To strengthen the export laws and cut off global non-compliance with the US export regulations, FinCEN and BIS has recently issued a joint notice on Suspicious Activity Report (SARs) for financial institutions. This notice supports the financial institutions to adopt risk-assessment in trade transactions and staying alert to any global attempt to evade export laws.