EU agrees to ban Russian gold as it tightens sanctions over Ukraine

Latest package hits technology exports and blacklists more than 50 people and entities

The prolonged fighting in Ukraine has raised questions about the effectiveness of EU sanctions on Russia. AFP
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European diplomats on Wednesday agreed on a package of tighter sanctions on Russia that will ban gold imports and freeze the assets of Moscow's biggest bank.

The measures adopted by ambassadors from the European Union's 27 member states will tighten export controls on high-tech equipment and blacklist more Russian oligarchs, as the continent tries to increase the cost to the Kremlin of invading Ukraine.

The EU billed the latest measures as a tweak to its six previous rounds of sanctions on Russia, tightening them in places while reassuring traders that food exports would not breach EU law.

"The rapid and consensual progress underlines that the EU is united and determined to support Ukraine," said Michael Clauss, Germany's ambassador in Brussels, after the agreement was reached.

Lithuanian delegate Arnoldas Pranckevicius said more than 50 people and entities were being added to the sanctions list including politicians, military leaders, oligarchs and Kremlin propagandists.

The new package does not include a ban on Russian gas, which Mr Pranckevicius and others had favoured, but is opposed by some member states including Hungary and Austria.

Early rounds of sanctions had passed in record time but the process lost momentum when an oil ban was held up in negotiations for almost a month, before diplomats agreed on a carve-out for landlocked countries.

Hungary subsequently said it opposed any further sanctions but did not stand in the way of what the EU carefully billed as a "maintenance and alignment" package, although some diplomats described it as a seventh round of restrictions.

Lithuanian Prime Minister Ingrida Simonyte said on Wednesday that the EU "must not succumb to sanctions fatigue" despite doubts over whether the measures are working.

"The EU must remain patient, strengthen communication on sanctions among the European countries and not deviate from its course," she said at talks with European Commission member Mairead McGuinness.

The EU ban on gold follows in the footsteps of Britain, the US and Canada and honours an agreement made at the G7 summit in Germany last month to go after Russia's reserves.

It is due to take effect on Thursday and will include a ban on importing gold jewellery — with Russian elites already banned from acquiring precious metals from the EU. Russia's biggest bank, Sberbank, will have its assets frozen.

"The new measures will align the EU with G7 partners, reinforce implementation and close loopholes where necessary," said an official from the current Czech presidency of the bloc, which is on rotation.

They said the package contained a "commitment that sanctions won't endanger the food and energy security around the world".

With the war in Ukraine sending food prices rocketing around the world, the EU has been keen to counter the Russian narrative that western sanctions are to blame.

The EU has accused Russia of deliberately bombarding Ukrainian grain stocks but has sought to clarify to businesses that they can handle Russian produce without breaching sanctions.

Updated: July 20, 2022, 3:55 PM
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