Indian company among 27 faces EU sanctions over dual-use exports to Russia

FILE – Russian President Vladimir Putin – AP

A company registered in India along with others registered in Russia, China, Kazakhstan, Serbia, Thailand, Sri Lanka and Turkey are among those facing export restrictions under new European Union (EU) sanctions announced on Friday.

The move comes as the EU commemorates the second anniversary of the Russia-Ukraine conflict, which falls on Saturday. The sanctions specifically focus on companies involved in producing electronic components, which the EU, comprising 27 nations, perceives as potentially serving both military and civilian purposes, thereby subjecting them to heightened export restrictions.

The names of the companies are not yet public; they will be published in the EU’s official journal later.

“Based on hard evidence from various sources, supported by trade and customs data, the package adds 27 Russian and third-country companies to the list of entities associated with Russia’s military-industrial complex,” read an official statement from the European Commission.”The EU will impose export restrictions towards these companies regarding dual-use goods and technology, as well as goods and technology which might contribute to the technological enhancement of Russia’s defence and security sector,” it said.

The package covers: 17 Russian companies which are involved in the development, production and supply of electronic components, particularly used in connection with drone production; four companies registered in China and “one each registered in Kazakhstan, India, Serbia, Thailand, Sri Lanka, and Turkiye, also trading in the area of electronic components, including of EU-origin.

“The latest restrictions form part of the 13th package of sanctions against Russia by the European bloc and focus on further limiting Russia’s access to military technologies, such as drones, and on listing additional companies and individuals involved in Russia’s war effort.

With the new package, the European Commission said the number of individual listings has reached over 2,000, “dealing a huge blow to those who enable Russia’s illegal war against Ukraine.”This package further deepens our actions to stop Russia from acquiring Western-sensitive technologies for the Russian military.

Unmanned aerial vehicles, or drones, have been central to Russia’s war against Ukraine. This package thus specifically lists companies procuring Russia with key drone components and introduces some sectoral sanctions to close loopholes and make drone warfare more complicated,” it noted.

In addition, the package expands the list of advanced technology items that may contribute to Russia’s military and technological enhancement or to the development of its defence and security sector.

It adds components used for the development and production of drones, such as electric transformers, static converters and inductors found inter alia in drones, as well as aluminium capacitors, which have military applications, such as in missiles and drones and in communication systems for aircraft and vessels. This will further weaken Russia’s military capabilities, the European Commission said.

While previous sanctions have increased costs for Russia’s ability to fight in Ukraine, they appear to have done little so far to deter Putin’s aggression or ambitions. The Biden administration is levying additional sanctions as House Republicans are blocking billions of dollars in additional aid to Ukraine.

The war is becoming entangled in U.S. election-year politics, with former President Donald Trump voicing scepticism about the benefits of the NATO alliance and saying that he would “encourage” Russia to “do whatever the hell they want” to countries that, in his view, are not pulling their weight in the alliance.

Many of the new U.S. sanctions announced Friday target Russian firms that contribute to the Kremlin’s war effort — including drone and industrial chemical manufacturers and machine tool importers — as well as financial institutions, such as the state-owned operator of Russia’s Mir National Payment System.

The Russian foreign ministry said the EU sanctions are “illegal” and undermine “the international legal prerogatives of the UN Security Council.” In response, the ministry is banning some EU citizens from entering the country because they have provided military assistance to Ukraine. It did not immediately address the U.S. sanctions.

The U.S. specifically was to target individuals associated with Navalny’s imprisonment a day after Biden met with the opposition leader’s widow and daughter in California. It was also hitting “Russia’s financial sector, defence industrial base, procurement networks and sanctions evaders across multiple continents,” Biden said. “They will ensure Putin pays an even steeper price for his aggression abroad and repression at home.”

The EU asset freezes and travel bans constitute the 13th package of measures imposed by the bloc against people and organizations it suspects of undermining the sovereignty and territorial integrity of Ukraine.

“Today, we are further tightening the restrictive measures against Russia’s military and defence sector,” EU foreign policy chief Josep Borrell said. “We remain united in our determination to dent Russia’s war machine and help Ukraine win its legitimate fight for self-defence.”

In all, 106 more officials and 88 “entities” — often companies, banks, government agencies or other organizations — have been added to the bloc’s sanctions list, bringing the tally of those targeted to more than 2,000 people and entities, including Russian President Vladimir Putin and his associates.

Companies making electronic components, which the EU believes could have military as well as civilian uses, were among 27 entities accused of “directly supporting Russia’s military and industrial complex in its war of aggression against Ukraine,” a statement said.

Those companies — some of them based in India, Sri Lanka, China, Serbia, Kazakhstan, Thailand and Turkey — face tougher export restrictions.

The bloc said the companies “have been involved in the circumvention of trade restrictions,” and it accuses others of “the development, production and supply of electronic components” destined to help Russia’s armed forces.

Some of the measures are aimed at depriving Russia of parts for pilotless drones, which are seen by military experts as key to the war.

Since the start of the war, U.S. Treasury and State departments have designated over 4,000 officials, oligarchs, firms, banks and others under Russia-related sanctions authorities. A $60 per barrel price cap has also been imposed on Russian oil by the Group of Seven allies, intended to reduce Russia’s revenues from fossil fuels.

Critics of the sanctions, price cap and other measures meant to stop Russia’s invasion say they are not working fast enough.

Maria Snegovaya, a senior fellow at the Center for Strategic and International Studies, said that primarily sanctioning Russia’s defence industry and failing to cut meaningfully into Russia’s energy revenues will not be enough to halt the war.

“One way or another, they will have to eventually address Russia’s oil revenues and have to consider an oil embargo,” Snegovaya said. “The oil price cap has effectively stopped working.”

Treasury Deputy Secretary Wally Adeyemo, in previewing the new sanctions, told reporters that the U.S. and its allies will not lower the price cap; “rather what we’ll be doing is taking actions that will increase the cost” of Russia’s production of oil.

He added that “sanctions alone are not enough to carry Ukraine to victory.”

“We owe the Ukrainian people who have held on for so long the support and resources they desperately need to defend their homeland and prove Putin wrong once and for all time.”

With inputs from agencies.