Russia cannibalizing its economy to power its war machine - EU special envoy on sanctions

RIGA - Russia is cannibalizing its economy to power its war machine, the European Union's (EU) International Special Envoy for the Implementation of EU Sanctions, David O'Sullivan, said after a meeting in Riga today with Foreign Minister Baiba Braze.

He stressed that the EU sanctions are working because Russia's economic performance is not so good when you look at it in detail. Russia is being denied access to the technology needed to make sophisticated weapons. It is also dealing with the issue of limiting revenue generation.

O'Sullivan pointed out that sanctions cannot solve all the problems, so there are other ways that can help to improve the situation. He believes that other things need to be done to help Ukraine, be it military, macro-financial assistance or political, such as the prospect of joining NATO and the EU. The envoy stressed that sanctions are an important part of what can be done and have an impact on Russia's ability to continue the war it has started.

The Latvian Foreign Minister pointed out that it is important to regularly analyze what is happening in the Russian economy, but this is not always easy, as Russia has also realized that some data should be hidden. Braze agreed that the sanctions are working, but this does not mean that the situation is static and unchanging. In her view, it is a dynamic adjustment, as Russia is trying to circumvent sanctions by using other countries, hidden companies and financial structures.

"We are talking about three lines of action. The first is to reduce the entry of money into the Russian economy from the outside, the second is to reduce access to technology, and the third is to maintain and sustain political cooperation and support," the Minister said.

Braze noted that exchanges of views took place during the meeting with the EU Special Envoy on Sanctions. O'Sullivan's post was specifically created after Russia's full-scale invasion of Ukraine in 2022 to work with non-EU countries to jointly prevent sanctions evasion. She stressed that EU sanctions have a global effect.

"We discussed what we can do in terms of new sanctions, how existing sanctions are implemented, how we can work together in third countries to prevent sanctions evasion. (...) The goal is the same for all of us - to prevent Russia from getting access to the money and technology that is influencing the war in Ukraine," said Braze.

Asked whether the circumvention of EU sanctions is a big problem, O'Sullivan stressed that all the bloc's member states are implementing the sanctions. He added that circumventing sanctions is a crime in Europe. A directive has recently been adopted at European level aimed at harmonizing the criminal penalties that can be imposed for violations.

"I think that the enforcement of sanctions is working well in the bloc. Of course, it is very difficult because Russia is subject to a wide range of sanctions that no other country has ever been subject to before. [...] I think the issue of sanctions evasion is more for countries outside the bloc, because the sanctions imposed by the EU are not sanctions imposed by the UN, so many countries feel that they do not have to comply with these sanctions," said the EU Special Envoy on Sanctions.

The envoy stressed that it is his job to try to persuade such countries, even if they did not fully comply with EU sanctions, to prevent dual-use and military goods from reaching Russia through the territory of other countries.

Asked whether he thought that Latvia, as well as Poland, Lithuania and Estonia, need the bloc's help in customs and sanctions enforcement, O'Sullivan stressed that he was fully aware of the specific situation of border countries and customs authorities. The Envoy noted that the EU already provides a great deal of assistance. He underlined that there is very good cooperation between border countries to share experiences.

"You can be sure that the EU fully supports the work of the border countries to protect not only their territory but also the territory of the bloc as a whole," the envoy said.

Braze added that before the Russian war, there were no controls on goods leaving the bloc. It was the duty of Russia or Belarus to check what goods were entering their territory. After the Russian war and the introduction of sanctions, this is a completely new obligation that falls on all border customs. She said that a practical support package for customs support has been prepared. Work on this is ongoing with both American counterparts and the EU.