EU States Demand Sanctions Exemptions, Block Measures in Latest Russia Package

Several EU member states have demanded exemptions from the bloc’s latest proposed Russia sanctions package, or blocked some of its measures outright, the Financial Times reported on Monday, citing diplomats.

Greece, France, Italy, Germany, Austria, and Portugal all repordedly asked for changes, reflecting growing resistance to Brussels’ sanctions attempts, as more member states balk at measures they believe would damage their own national economies and corporate interests.

Several rounds of talks last week failed to produce agreement on the EU’s proposed 21st sanctions package targeting Russia’s energy, financial, crypto, trade, and fisheries sectors. It would also ban Russians who have served in the military since the escalation of the Ukraine conflict in February 2022 from entering the bloc.

New sanctions require unanimous backing, but EU governments are becoming less willing to accept the economic costs of sanctions to back Kiev, five diplomats involved in the negotiations told the outlet.

“The moral imperative is functioning less and less,” one diplomat said. “Capitals all agree on tough rhetoric and talk of solidarity, but then it all melts away.”

Greece has reportedly refused to approve the package unless it secures an exemption allowing its shipping companies to continue transporting Russian liquefied natural gas (LNG) to non-EU countries. Athens argues that a ban would disproportionately hurt Greek shipping interests, including Dynagas, owned by billionaire George Prokopiou.

Dynagas has transported more than 30 million tons of LNG from Russia’s Yamal project since 2022, with cargoes estimated to be worth more than $24 billion, the FT said citing energy analytics firm Kpler.

Dynagas has argued that the proposed restrictions could force it to sell its specialized ice-class LNG carriers once the EU ban on Russian gas takes effect in January 2027. The company said the vessels were built specifically to serve Russia’s Yamal LNG project and are tied to long-term contracts running until 2065 that were signed well before the Ukraine conflict. It warned that banning EU companies from transporting Russian LNG to third countries would weaken Europe’s shipping industry while benefiting foreign competitors without achieving its stated geopolitical goals.

Portugal and Germany have also sought to remove a proposed ban on Russian fish imports to protect domestic processors, while France and Italy reportedly want to soften restrictions on issuing EU visas to Russian military personnel.

“It is a major crisis for the whole sanctions approach,” one diplomat told the FT. “If everyone demands derogations and loopholes, then at the end of the process, each package of sanctions is just an empty box.”

Since 2022, the EU has adopted 20 rounds of sanctions on Russia. However, diplomats told the outlet that resistance to the latest package is stronger than at any point since the campaign began, reflecting growing concern among governments over the impact on their own economies.

Moscow has insisted the sanctions will not change Russia’s course, with Kremlin spokesman Dmitry Peskov saying the country has adapted to the restrictions while Europe is bearing part of the economic cost.