EU Guidance Weakens Bloc’s Sanctions on Coal, Countries Warn

Alberto Nardelli and Aaron Eglitis
·3 min read
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(Bloomberg) -- A group of European Union nations pushed back against new guidance from the EU executive that they fear weakens sanctions and could allow countries to transport key Russian commodities such as coal globally.

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Member states including Poland and the Baltic nations criticized the EU’s updated sanctions guidance during meetings between European ministers, according to people familiar with the talks. The nations had asked the commission to withhold publication of the document until the matter was addressed.

The new guidance from the European Commission, the bloc’s executive arm, says that the transfer of certain goods, including coal and related products, “should be allowed to combat food and energy insecurity around the world.” Previously, the commission said that its sanctions prohibit EU operators from transferring coal and providing services -- such as financing and insurance -- to all shipments of such products originating in Russia.

The commission’s guidelines were surprising and not coordinated with member states, Latvia’s Foreign Ministry said in a statement. The ministry confirmed that a number of countries had raised the issue at a meeting of foreign ministers requesting reconsideration of the guidelines, particularly on commodities that are not related with food security.

The government in Riga will work with the commission to address the concerns, the ministry said, but if an agreement is not found, it will seek a legally sound regional solution in areas that are the responsibility of member states.

“The EU is fully committed to avoiding that its sanctions unduly impact trade in critical items to third countries around the globe,” Commission Spokesman Daniel Ferrie said in a statement, adding that the clarification was relevant to agri-food items including chemicals used for fertilizers, energy commodities and specific essential goods.

“The financing, or provision of financial assistance -- such as insurance or reinsurance -- by EU operators for the transport to third countries of the products mentioned in our guidance note is also allowed,” Ferrie said.

Coal and related products were highlighted in the commission’s guidance note.

Food Security

The commission told member states during the meeting that the clarifications were aimed at avoiding any negative impact on food and energy security on third countries around the world and primarily focused on fertilizers, said the people, who asked not to be identified because the discussions were private.

The EU previously agreed not to sanction food and essential agricultural goods, and has reaffirmed that commitment on a number of occasions to counter Russian propaganda falsely blaming restrictive measures for rises in food prices.

“None of the sanctions adopted by the EU in view of Russia’s war of aggression in Ukraine target the trade in agricultural and food products, including wheat and fertilizer, between third countries and Russia,” Ferrie said. The full import ban on coal into the EU remains in place, he said.

But the group of nations said they were left confused by the proposals and pointed out that the new text contained references to wood, some cement products and coal, the people said. Diplomats have asked the commission to further explain the proposed move, fearing it could go beyond the earlier food security commitments and effectively be watering down sanctions on those Russian commodities.

Bloomberg reported last week that a Greek-managed vessel had shipped coal from Russia to Turkey after EU sanctions came into force in August.

(Updates with Latvian statement from the fourth paragraph.)

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