Sanctions against 100 individuals and legal entities will be introduced by the European Union as part of the 11th package of anti-Russian restrictions. This is reported by the publication EUobserver.
The report claims that new sanctions could be introduced in conjunction with special financial transaction permits for European companies leaving Russia.
These firms can make financial transfers to EU-sanctioned Russians if “these funds or economic resources are necessary to complete the transactions” up until August 31, 2023.
In addition, European regulators may allow the provision of legal services until the end of this year, necessary to complete the exit from the Russian market.
Although about 1,000 foreign companies have left Russia since February 24, 2022, dozens of organizations from the EU still operate in the Russian Federation, for example, subsidiaries of large European banks, energy companies Engie, OMV and Total and others.
However, they cannot leave the Russian Federation so easily – since all transactions for the sale of Russian businesses by companies from “unfriendly” countries must be approved by a subcommittee of the government commission on foreign investment, headed by the Minister of Finance of the Russian Federation.
In addition, writes EUobserber, foreign businessmen need to pay the Russian Federation an “exit tax”: at least 5% of the market value of the business if the discount on the sale is less than 90%, and at least 10% of the market value if the discount exceeds 90%.
In addition, the material, citing an unnamed source in Russia, says that foreign companies that continue to work in the country may need to pay tax – up to 25% of profits.
This may happen when double tax treaties are terminated. Suspension of their action with countries that have imposed sanctions against Russia was previously proposed by the Foreign Ministry and the Ministry of Finance of the Russian Federation.
Work on the 11th package of sanctions has been carried out by European bureaucrats since the beginning of spring 2023. The head of the European Commission, Ursula von der Leyen, during a visit to Kyiv on May 9, said that the new sanctions package will focus on circumventing the already introduced measures. For example, they may impose a ban on the transit of European goods through Russia to third countries. Or they can ban the export of European products to third countries that supply products under EU sanctions to Russia.
Sanctions may also be introduced in the energy sector – Germany may be banned from receiving oil through the Druzhba pipeline, leaving such a right only for Hungary.
In addition, they may introduce new visa bans and freeze the assets of several dozen Russian officials, a number of organizations and “two small banks”, EUobserver reported.
On May 13, Polskie radio reported that the countries of the European Union could not yet agree on the 11th package of sanctions against the Russian Federation. At the meeting of the committee of permanent representatives of the EU states, held on May 12, no decisions were made.
The radio station also notes that this sanctions package will be aimed at combating restriction bypasses and eliminating loopholes.
“If it turns out that some goods intended for export to third countries enter the Russian market, then an export ban will be introduced for them,” the publication says. As Polskie radio points out, such sanctions will be applied with caution and after careful analysis.