Upcoming Russia sanctions to target entities bypassing restrictions

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In the forthcoming eleventh round of sanctions against Russia, the EU plans to introduce a new measure intended to penalize countries and business entities that are perceived as helping the Kremlin override sanctions, potentially targeting China as a primary Russian ally and business partner, Euronews reported on Monday.

Such a measure will require the EU to apply a contested legal principle that would enable it to sanction entities outside of its own jurisdiction, namely that of extraterritoriality, alternatively known as secondary sanctions. 

With ten rounds of sanctions since the conflict erupted in February 2022, Russia's economy has still managed to stay afloat, with productivity thriving in a range of economic sectors, including the production of microchips, trucks, banknotes, chemicals, and luxury bags, the report states. 

A draft of the proposition has already been submitted to member states last Friday. It is expected to be further debated by ambassadors this Wednesday and will require the unanimity of all 27 member states in order to be approved.

"This package focuses on the implementation of sanctions, their effectiveness and how to prevent them from being circumvented, and also on the goods that have been banned from exporting to Russia – preventing these goods from finding their way to Russia and its military-industrial complex," a European Commission spokesperson said on Monday.

Read more: EU Commission proposes 11th sanctions package against Russia

The main concern for Brussels has been the re-routing of EU-made goods transiting through countries in the South Caucasus and Central Asia and finally reaching Russia Russia. 

For instance, China and Iran, who are big purchasers of EU goods, are also good partners with Russia. Turkey is also put under scrutiny despite it being a NATO member. 

The transfer of particular technologies to Russia is considered highly risky, as experts believe it would assist Moscow with its efforts in Ukraine.

These include semiconductors, radars, drones, radio systems, and other electronic components deemed highly strategic for warfare. 

The draft issued by the European Commission reportedly targets seven Chinese companies that are accused of selling military equipment to Russia, a report by the Financial Times states. Some among them are already blacklisted under the US' OFAC. 

Read more: Sanctions drive Chinese firms to advance AI research minus US chips