A proposed ban on the re-export of key goods could put the bloc’s businesses at a disadvantage, several nations reportedly warn

Several EU member states are seeking to soften proposals by the European Commission, aimed at preventing sanctions on Russia being circumvented via third nations, Bloomberg reported on Saturday, citing people familiar with the matter.

The bloc’s executive arm recently proposed curtailing exports to nations currently able to re-export goods from the bloc to Russia – thus helping the sanctions-hit country bypass penalties imposed by Brussels over the Ukraine conflict.

The measure, which could be included in a 12th package of sanctions on Russia, targets the sale of what the European Commission considers to be high-priority items, like semiconductors that can be used in weapons production. It reportedly obliges the buyer to deposit a sum in an escrow account to ensure compliance with the requirements.

According to documents seen by the news agency, at least half of the deposited amount would be transferred to a trust fund for Ukraine, while contracts would be terminated if the sanctions were breached.

However, diplomats from some large EU countries – which were not named by Bloomberg – have reportedly expressed concerns about the measures, raising doubts about their legality, and whether the insistence on guarantees and clauses from importers is viable.

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According to the agency’s sources, the member states are also pushing to narrow the scope of the proposed clauses and the list of items targeted by the measures that, according to them, could put EU businesses at a competitive disadvantage.

Other members, including the Baltic countries, back the proposals, the unnamed people told the agency.

Brussels has so far imposed eleven rounds of penalties on Russia in response to Moscow’s military operation in Ukraine.

The latest proposals reportedly include measures to cut off Moscow’s access to commercial revenues by restricting exports to Russia, including a ban on the sale of certain chemicals, lithium batteries, thermostats and motors for drones, as well as machine tools and machinery parts that can be used to produce weapons. The package may also impose a complete ban on the sale of Russian diamonds and jewelry.

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