(Bloomberg) -- European Union countries are still struggling to agree on new sanctions on Russia over its invasion of Ukraine, as member states continue to haggle over just how tough enforcement should be.
The main aim of the EU’s 11th sanctions package, which the bloc originally hoped to adopt around last month’s Group of Seven summit in Japan, is to tighten loopholes and tackle circumvention. Envoys to the bloc didn’t reach an agreement in the latest discussions this week.
That goal is particularly acute in terms of cracking down on Moscow’s ability to source banned technologies through third countries — such as the United Arab Emirates, Armenia, Kazakhstan and others in central Asia — that end up in Russian weapons on the battlefield in Ukraine. The European Commission, the EU’s executive arm, proposed a new mechanism to target countries that aren’t doing enough to prevent Russia from evading export restrictions.
A spokesperson for the commission declined to comment.
The primary aim of the tool would be to deter governments from helping Russia. But if diplomatic pressure proves ineffective, the mechanism would give member states the power to adopt targeted export restrictions on key goods. It would feature two lists: one of restricted goods, and the other of countries which the listed items can’t be sent to.
However, a group of countries, including France and Germany, have been seeking to weaken the proposal’s criteria by raising the bar on when it can target a country and limiting the scope of the trade sectors it covers, according to diplomats familiar with discussions over the past weeks and days.
Others would prefer targeting companies first rather than countries, despite arguments that new firms are easy to set up and such a move would mean the bloc having to constantly chase new entities that pop up.
The concern, one of the diplomats said, is that the mechanism could get so watered down that it would effectively be too hard to deploy and at the same time become weak as a deterrent. Some governments worry that targeting third countries could damage the EU’s relations with those nations and push them even closer to Russia, the diplomats said.
The debate has exposed the challenge the EU faces in working to enforce its own sanctions in a manner that is tough and consistent across the bloc, with the lack of common tools often meaning that enforcement is patchy and comes down to the political will of individual member states to implement the rules.
Meanwhile, Hungary and Greece continue to want to see some of their companies removed from a Ukrainian blacklist of what Kyiv calls “international sponsors of war” and are holding off on giving the overall package their green light. Discussions on that issue are ongoing even though the Ukrainian list isn’t a sanction and has no legal implications, several of the diplomats said.
An EU official said they were confident all the details could be solved next week.
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