Digest of the main news 26.08/01.09
1️⃣ European allies continue to work on developing a mechanism for transferring frozen Russian assets to Ukraine.
For example, Poland is calling on the EU to transfer all frozen assets of the Central Bank of Russia to Ukraine, not just the profits from them. Polish Deputy Foreign Minister Bartoszewski emphasizes that this is technically possible and is a political issue.
➖ At the same time, the EU itself is continuing the process of creating conditions for granting Ukraine a €50 billion loan from future income from frozen Russian assets. The EU plans to develop this mechanism regardless of the US position, as the latter fears the limited duration of European sanctions against Russia, given the opposition from Hungary within the EU.
➖ It is also stated that part of the frozen Russian assets will be used to support Ukraine's energy sector. In particular, according to EU Ambassador Katharina Mathernov, part of the first tranche, which came in July, amounting to €1.5 billion, is intended to prepare Ukraine for the coming winter, as the energy problem is becoming more acute with each passing day. The EU plans to disburse the next tranche in March 2025.
2️⃣ The sanctions pressure on Russia and its supporters is increasing significantly.
➖ The United States imposed new sanctions on 400 individuals and companies representing key industries, including energy, metals, and mining. The sanctions targeted companies from the UAE, Hong Kong, Turkey, Kazakhstan, Kyrgyzstan, and China that had been intermediaries for the export of sanctioned goods to Russia and Belarus. China reacted sharply to the US sanctions and called on the latter to stop ‘unlawful actions’.
➖ However, banks in countries that support Russia are increasingly refusing to work with the Russian ruble because they fear being hit by US sanctions. For example, UAE banks refuse to process payments from Russian companies for Chinese electronics, arguing that the goods do not arrive in the Emirates. Turkish state-owned banks, including Ziraat Bank, which ranked first in the country in terms of assets, have also started to pursue a similar policy.
3️⃣ The Lithuanian and Latvian MFAs report high involvement in the unification of sanctions against Russia and Belarus.
Full harmonization of sanctions will ensure greater control over their circumvention, and thus continue to increase sanctions pressure on Russia and its associates.
➖ In addition, the EU reminds of the need to use stricter measures against sanctions circumvention against the backdrop of growing exports of EU goods to countries close to Russia. It is emphasized that most of the work should be done by member states at the local level, which will provide a basis for further work at the EU level.
➖ Last week also saw the first case when a company itself discovered that its competitors were circumventing sanctions. Thus, Hindenberg Research investigated Super Micro, which revealed that Super Micro continues to export data processing and artificial intelligence equipment to Russia that could be used for military purposes.
International sanctions circumvention schemes are still active. For example, the US arrested a Hungarian citizen for attempting to illegally export US military equipment to Russia.
He was allegedly exporting 200 radio stations through a network of branches in Spain, Serbia, Hungary, Latvia, and other countries. Kyiv customs officers exposed a scheme to import water heaters from a sanctioned company into Ukraine worth more than UAH 2 million. According to the scheme, the goods were supposed to enter Ukraine through a third country.
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