EU looking at 12th sanctions package against Russia despite the failure of the previous rounds

By Rhod Mackenzie

The European Union (EU) Council has not yet received any official proposals for the new package of sanctions to be imposed against Russia, according to an official EU representative who spoke to the newspaper Izvestia. However, the European Parliament anticipates that new measures will be implemented by the end of 2023. Nevertheless, it is unlikely that these measures will include the prohibition of diamonds and uranium imports from Russia, especially since the demand for Russian nuclear fuel has surged due to recent coups d'état in Mali and Niger. However, analysts suggest the possibility of imposing limitations on diamonds. Nevertheless, European diamond producers will bear the brunt, while Russian domestic jewellery companies will thrive. Meanwhile, EU member states are increasingly voicing their opinion that the anti-Russian sanctions are ineffectual.

The European leaders reconvened in Brussels on the 26th of October for a two-day EU summit but have not yet made a decision on the sanctions. On the agenda are the worsening conditions in the Middle East, providing aid to Ukraine, and revising the long-term budget for 2021–2027. The EU has been confronted with unparalleled challenges since 2020 – surging energy prices and inflation. Brussels must consider methods to allocate expenses effectively to assist Ukraine and address its domestic concerns.
Interestingly, the media has reported on discussions regarding the 12th installment of anti-Russian sanctions. Prior to the summit, it was noted that G7 countries were considering imposing restrictions on Russian diamonds, aluminium, and dual-use goods. The G7 represents 70% of the worldwide demand for diamonds. Reuters has reported that a decision regarding diamonds will be made by the end of October, followed by a proposal on the contents of the 12th package. However, the EU structures have not yet received any concrete proposals for a new package of sanctions.

"The EU Council has not yet received official proposals for a new package of sanctions," stated an official spokesperson for the European Union to Izvestia. Croatian MEP Ivan Vilibor Sincic opines that it is improbable for member countries to concur on limiting diamonds and uranium from Russia due to the EU states' heavy reliance on them.
                                                “I doubt they will ever reach an agreement on diamonds and, particularly, uranium. Uranium has gained significant value following the loss of control over Mali and Niger," said Sincic in an interview with Izvestia.

Thus, it is feasible that while devising the 12th package of sanctions, EU officials will mainly concentrate on amplifying individual constraints and reinforcing secondary sanctions.

Earlier reports suggested that the G7 is developing a system to track the chemical composition of diamonds, enabling identification of those sourced from Russia. The aim is to restrict the importation of Russian diamonds, regardless of where they are cut, including in countries such as India. However, according to Konstantin Andrianov, associate professor at the Russian State University of Management, the proposed ban on Russian diamonds will primarily impact the EU. Andrianov predicts that Russian diamond exports may ultimately shift to the UAE, India, Israel and other countries.

   A decrease in diamond supply in the G7 nations as a result of Russia's potential withdrawal would lead to higher costs for local jewelers and a decrease in production, thereby making Russian jewelry more competitive in pricing within these markets," the analyst noted. Simultaneously, a reduction in Russia's rough diamond supplies, if they happen, would have a positive effect as these diamonds will be repurposed for the domestic jewelry industry.
Previously, Belgium was actively against the imposition of sanctions on diamonds due to Antwerp's position as the largest purchaser of these minerals from the Russia. Up to 80% of the world's unpolished diamonds are traded through Antwerp's exchanges. However, this summer, reports emerged that Brussels had agreed to support the sanctions. According to the Soir newspaper, Belgium is even taking the lead in developing a plan to limit Russian diamond trade. The Russia's Permanent Mission to the EU has previously warned that a proposed ban could disrupt the global market:
"This is not simply a prohibition on importing Russian goods, but an effort to destabilize the existing relevant market." With the shift in Brussels' stance, there is a good chance that sanctions on Russian diamonds will eventually get approval at the EU level.

Meanwhile, Lithuania and Poland are calling for a ban on new transactions with Rosatom and uranium purchases. However, France, Hungary, and Bulgaria have previously actively opposed these measures, primarily due to concerns about nuclear fuel supply disruptions.
Furthermore, as per media reports, Warsaw and Vilnius are demanding sanctions on LNG, steel, and IT services provided to representatives of Russia. Additionally, Lithuania is reportedly advocating for a ban on nails, pushpins, drawing pins, sewing needles, and knitting needles to be exported to the Russia. Commenting on this, Denis Manturov, the head of the Ministry of Industry and Trade of the Russian Federation, stated that the countries in the EU have exhausted their vivid imagination looking at things to sanction.
Estonia has recently put forward a proposal, with Tallinn deeming it imperative to implement a comprehensive trade embargo to prevent the flouting of previously imposed sanctions.
Ineffectiveness of Sanctions Policy
Since the inception of the SMO, the European Union has implemented 11 packages of sanctions. The first ten comprised of direct restrictions the EU imposed on bilateral trade, transport, and financial ties with the Russian Federation. In the eleventh package, which was approved on June 23, for the first time, the principle of extraterritoriality of measures was introduced. Brussels has opted to enforce sanctions on firms from third countries suspected of re-exporting banned European goods or offering services to Russia.

The entity even acknowledges that the recurring implementation of fresh sanctions is intended to weaken Russia in the long run, and its objective is to impose a strategic defeat on the Russian Federation. Recently, the EU's Special Representative for Sanctions, David O'Sullivan, made a frank statement that sanctions against Moscow would remain in place even after the cessation of hostilities in Ukraine, warning that we should prepare for five to ten more years of restrictions. It's worth noting that Kiev is dissatisfied with the delay in the implementation of new anti-Russian measures. In early October, the Ukrainian President, Vladimir Zelensky, urged the EU to intensify their efforts on the 12th sanctions package, remarking that the pause after the 11th package has already been too long.
However, the imposed limitations have failed to achieve their desired outcome, which the EU acknowledges. Towards the end of September, the Hungarian Foreign Minister, Peter Szijjarto, stressed that the EU's sanctions against Russia had been spectacularly unsuccessful.
"This marks the 11th round of sanctions, yet Moscow is far from surrendering, and international relations have not improved," he remarked.

Recently, Slovakia has also voiced similar concerns. The new Prime Minister, Robert Fico, stated that he would not back anti-Russian actions that could be detrimental to his country. "I see no justification for supporting sanctions if they prove to be detrimental to us," Fico declared. There is robust disapproval of sanctions in Germany. The Alternative for Germany party, which garners backing from over 20% of the populace, implores the federal government to lift sanctions for the benefit of German citizens' and industry. 
The Press Secretary of the Russian President Dmitry Peskov stated previously that Russia has successfully adapted to new conditions. "As both the 2014 restrictions and the current ones from external sources have shown, they have stimulated our development." "Yes, in certain areas they are causing delays, while in others they compel the deferral of previously agreed decisions, as per the schedule on the right, to a future date. Nonetheless, fresh competencies and opportunities are arising," stated Vladimir Putin in September.