summary of EU Sanctions Proposal (September 2025)
This document outlines a new, thorough EU proposal to tighten sanctions against Russia and utilize frozen Russian assets to aid Ukraine. Here’s a breakdown of teh key points:
1. Energy Sector Sanctions:
* LNG Ban: A full ban on Russian Liquefied Natural Gas (LNG) is proposed, a year earlier than previously planned (effective January 2027). This would cut off an estimated SEK 66-92 billion annual income for Russia.
* Oil Pressure: Further reduction of the price ceiling on crude oil and sanctions on 118 vessels in Russia’s “shadow fleet” used to circumvent existing sanctions.
* Transaction Bans: Total transaction bans proposed for major Russian energy companies Rosneft and Gazpromneft.
2. Financial Sanctions:
* Cryptocurrency Ban: A ban on cryptocurrency transactions via platforms used to bypass financial sanctions.
* bank Sanctions: Additional Russian and foreign banks linked to option Russian payment systems will be added to the sanction list.
3. Technology & Military Restrictions:
* Export controls: New direct export restrictions on technology and components used in the Russian defence industry, notably for drones.
* Company Sanctions: 45 new companies (in Russia and third countries) accused of supporting Russia’s military industry will be added to the sanction list.
4. Utilizing Frozen Assets:
* $300 Billion Frozen: The EU proposes using the cash generated by the $300 billion in frozen Russian central bank assets (held primarily in Europe) to provide Ukraine with a “repair loan.” The assets themselves will not be moved.
* “Perpetrator Pays”: The EU emphasizes Russia’s duty for financing Ukraine’s defense.
5. Political Challenges & Compromises:
* Unanimity Required: Both the sanctions package and the asset utilization plan require unanimous approval from all 27 EU member states.
* Hungary’s Veto threat: Hungary (led by Viktor Orbán) has repeatedly threatened to veto sanctions. Slovakia is also a continued importer of Russian oil.
* Financial Incentives for hungary: To overcome potential resistance, the european Commission is planning to release approximately EUR 550 million in previously frozen EU funds to Hungary. This follows a similar tactic in 2023 where EUR 10 billion was released to secure a veto release on a Ukraine support package.
Overall Goal: The EU aims to cripple Russia’s war economy, force Russia to withdraw from Ukraine, and bring Russia to the negotiating table. The EU anticipates tough negotiations to achieve these goals.
Sources: bloomberg & Financial times (links provided in the original text).
