The European Union’s 27-member states have adopted a 20th package of sanctions against Russia in response to its illegal invasion of Ukraine in February 2022 and the ongoing conflict, including measures to prevent Russian sanctions circumvention via the digital asset space.
In an April 23 article, the European Commission said it welcomed the sanctions targeted at Russia’s energy, finance, trade, and military complex, including a “total sectorial ban on carrying out exchanges with any Russian crypto asset service provider [CASP] as well as any decentralized platforms enabling crypto trading” that could be used to circumvent the measures.
“This comprehensive package – spanning energy, finance, and trade – will further constrain Russia’s capacity to fund its brutal and illegal war,” said Maria Luís Albuquerque, Commissioner for Financial Services and the Savings and Investments Union. “It represents another decisive step in tackling sanctions evasion, targeting financial actors and infrastructure in third countries that enable circumvention.”
She added that, as part of the package, “for the first time, we are activating our anti-circumvention instrument to block exports of critical EU goods to a third country used to undermine our measures.”
Since Russia’s invasion of Ukraine, the former was hit with an unprecedented set of sanctions from the international community, ranging from freezing the assets of Russian state-linked individuals to barring major Russian banks—including Bank Otkritie, Novikombank, Promsvyazbank, Rossiya Bank, Sovcombank, VEB, and VTB—from the international financial messaging system, Society for Worldwide Interbank Financial Telecommunication (SWIFT).
The EU was among the first jurisdictions to act quickly and severely, imposing economic, financial, and trade sanctions on Russia, targeting major banks, freezing central bank assets, banning exports of key technologies, and limiting energy imports.
It also sought to address concerns that the digital asset industry could serve as a route out of Russia’s restrictions. In April 2023, the bloc banned European-based businesses from providing high-value services to Russia in exchange for digital assets valued at more than €10,000 ($11,700).
The newly announced 20th package imposes additional measures related to the digital asset sector.
As well as the ban on carrying out exchanges with Russian CASPs or decentralized platforms enabling crypto trading, the package prohibits the use of, or support to, the cryptocurrency RUBx—a ruble‑backed stablecoin—and the digital ruble, a central bank digital currency (CBDC) under development by the Central Bank of Russia, which the Commission said was “being set up to enable sanctions circumvention.”
Overall, the Commission described the package as a reaffirmation of the bloc’s unwavering commitment “to a free and sovereign Ukraine,” adding that it “puts further pressure on Russia to engage in negotiations and do so on terms acceptable for Ukraine.”
Hampering oil profit
The majority of the measures announced in the 20th package were not directly related to digital assets, instead targeting a broad range of Russia’s energy, finance, and military sectors. Among the most significant were several measures aimed at hampering the Russian oil sector, which has become an increasingly vital lifeline for the pariah state amid the ongoing conflict in Iran and the Strait of Hormuz stalemate, which has sent oil prices soaring globally.
The EU announced 36 new sanctions listings encompassing both the upstream and downstream segments of the Russian energy sector, including the exploration, extraction, refining, and transportation of oil. On top of this, new measures aim to further reduce revenues from Russian oil exports by listing additional shadow fleet entities, including those operating in third countries, as well as a significant maritime insurer and 46 additional vessel listings.
“With these additions, a total of 632 vessels in Russia’s shadow fleet are now listed by the EU. They are subject to a port access ban and a ban on receiving services,” said the Commission. “Alongside these additional listings, the EU continues its outreach to flag states to ensure that their registers do not allow these vessels to sail under their flags.”
Meanwhile, two Russian ports were also designated, Murmansk and Tuapse, as well as, for the first time, a third country port, Karimun Oil Terminal in Indonesia, for its connections with the shadow fleet and circumvention of the oil price cap.
Finally, the 20th sanctions package also included the basis for a future prohibition on the transport of Russian oil and petroleum products, with the Commission stating it would decide when the maritime services ban would enter into force, taking into account an appropriate wind‑down period.
“This would further reduce the total available capacity to transport Russian oil, hitting Russia’s main source of revenue for its war machine,” said the Commission.
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Financial and trade measures
In terms of other financial measures, the new package extended the ban on EU operators doing business with 20 additional Russian banks, bringing the number of Russian banks excluded from access to the EU internal market to 70.
The EU is also extending the transaction ban to four banks in Kyrgyzstan, Laos, and Azerbaijan that assist the Russian war effort.
Meanwhile, new trade bans include export prohibitions to Russia for goods from rubber to tractors, worth over €365 million ($427 million); export restrictions on items and technologies used for Russia’s military effort, such as explosives, laboratory glassware and high‑performance lubricants and additives for lubricants; a restriction on provision of cybersecurity services to Russia; and import bans on metals, chemicals and minerals worth over €530 million ($620 million).
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Other measures
Alongside increased efforts to stymie Russia’s sanctions circumvention in the digital asset space, the new package added 60 entities to the list of those providing direct or indirect support to Russia’s military industrial complex or engaging in sanctions circumvention, including entities in Hong Kong, Türkiye, the United Arab Emirates, and Thailand.
The Commission also highlighted new measures to tackle Russian propaganda, not least so-called “mirror outlets” that circumvent the broadcasting ban by spreading the same content as listed propaganda media outlets such as Russia Today and Sputnik.
“The content of these mirror sites and domains will also be banned from distribution in the EU,” the Commission said. “This will facilitate the faster takedown or blocking of online sites that act as proxies or clones of official media outlets’ channels.”
Lastly, the EU also introduced new measures prohibiting the acceptance of funding, including donations or grants, from the Russian government in the area of research and innovation—a ban that extends to research institutes, higher education establishments and other bodies in the EU, as well as individuals associated with these entities.
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Source: https://coingeek.com/eu-bans-exchanges-with-russian-crypto-services-in-new-sanctions/
