MEPs discuss with Commission and Council representatives whether the EU’s sanctions against Russia are working, and how to prevent their circumvention by Moscow. Following Russia's illegal and unprovoked full-scale invasion of Ukraine in February 2022, the European Union swiftly adopted unprecedentedly tough sanctions against Moscow. There have since been 11 sanctions packages in total, Moscow has however found ways to bypass these measures, including through loopholes in trade restrictions and with the help of third-country intermediaries. Opening statements by Pascual NAVARRO RÍOS, Spanish Secretary of State for the European Union and Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim). This transcription is a result of an automatic process. Please check against delivery.

EU - Ukraine (T)

statement

Strasbourg

debate

plenary session

EU - Russia (T)

REYNDERS, Didier (BE, EC)

solidarity with Ukraine (T)

NAVARRO RÍOS, Pascual Ignacio

The effectiveness of the EU sanctions on Russia: opening statements by Pascual NAVARRO RÍOS, Spanish Secretary of State for the European Union and Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim)

SOUNDBITE (Spanish), Pascual NAVARRO R&Iacute;OS, Spanish Secretary of State for the European Union, Thank you, President. Honorable members. Commissioner. Russia's war of aggression against Ukraine is a clear violation of the UN Charter and the fundamental principles of international law. Thanks to our unity, we have managed to provide a political, economic and military support to Ukraine and adopted an unprecedented range of sanctions against the Russian regime. The current sanctions regime against Russia is the widest and most decisive ever decided upon by the European Union, as expressed by our leaders at the Venice summit last year.

SOUNDBITE (Spanish), Pascual NAVARRO RÍOS, Spanish Secretary of State for the European Union, The European Union is prepared to step up the pressure on Russia and Belarus, including the adoption of further restrictive measures. Our sanctions have been designed to reduce Russia's capacity to carry out its illegal war against Ukraine, reduce its budget and prevent access to key technologies which are relevant to defense.

SOUNDBITE (Spanish), Pascual NAVARRO RÍOS, Spanish Secretary of State for the European Union, The effectiveness of this system has been shown by the decline of the defense manufacturing industries in Russia and its loss of competitiveness over the medium and longer term. But we need to enforce new sanctions to step up the effectiveness of our regime. The recent measures adopted in the 11th sanctions package have this goal in mind.

SOUNDBITE (Spanish), Pascual NAVARRO RÍOS, Spanish Secretary of State for the European Union, This is important for all the assets sanctioned, but also for combat technologies that Russia would be able to purchase to pursue its war against Ukraine. Given the significance of the measures, it's important to be uniformly enforced. That means we have to start by preaching, by example. The European Union must redouble its efforts for repression. Thanks to cooperation amongst the member States and the Commission. Thank you.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), Thank you, President. Dear Secretary There, Members of the Parliament. Today we face a grim milestone. It is 600 days since Russia's war of aggression began against Ukraine. Since day one, we have been clear where we stand. We stand with Ukraine for as long as it takes. And we stand united as a European Union. Together, we have adopted 11 package of sanctions so far.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), Together, we have asked to end all energy reliance on Russia within a very short space of time. And together, we have successfully diversified our supplies of energy and raw materials. Let me talk briefly outline the impact of our measures on Russia.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), First of all, I want to reassure you: sanctions are having a strong impact on the Russian economy. Not that Russia carefully cherry picks the economic data that it publishes. Sanctions have curbed the revenues that Russia can use to finance the war. For instance, budget figures reveal that Russia's income from oil and gas has significantly declined, while large increases in military spending.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), This has resulted in estimate budget deficit of 1.7 trillion rebels. In fact, €15.9 billion for this year. We can see that the oil price gap and sanctions more generally are depriving Russia of its usual income sources to finance the war. In addition, mobilizing the assets of the Central Bank of Russia of about €300 billion. Of which two thirds we know are in the European Union was effective.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), It immediately created strong pressure on the ruble and forced the Russian authorities to turn to drastic capital control measures. And it is important to recognize that Russia is implementing a number of measures to support its economy and counter the effects of sanctions. While these Russian countermeasures may provide some stabilization. They also tie up resources that would otherwise be available to finance the wall.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), 'Diversion control measures also include the illegal expropriation of foreign assets and false administer creation of foreign companies, which undermine prospects for return to normality. Russia is going now through a so-called reconstruction process, allegedly rebuilding its economy and really ending its trade flows but the outcome of this process is a less efficient economy facing higher costs.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), First and foremost, Russia's war and the strong response from the European Union and our allies compromised the growth potential of the Russian economy. Inflationary expectations are increasing again. Russia's central bank is pressuring a more restrictive policy and their fiscal space is not large enough to extend sufficient support to all sectors.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), 'Russia's long term growth is undermined by our sanctions regime too. And let us not forget the kind of growth Russia is experiencing at the moment. Russia is turning its economy into a war economy. But manufacturing weapons and ammunitions will not improve the well-being of Russian citizens. There is no room for complacency. Sanctions need to be implemented in full.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), We are working closely with the member states like minded partners and third countries to tackle gaps and to address Russia's attempts to circumvent all restrictive measures. In fact, we are doing the same with Russia as a country that what we tried to do with the oligarchs and entities on the list of sanctions where we are trying to freeze the assets of those oligarchs and entities.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), And you know that we are in discussion with you and with the council about a proposal of directive to harmonize the different sanctions and the definition of sanctions. One is an attempt to circumvent the sanctions regime and certainly one, there is an attempt to circumvent such a possibility to freeze assets.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), We want to go to a step further and justice with a possible confiscation of such a gain of assets. So we are working on that. And we have had, again, a meeting of the task force with all the Member States yesterday in Brussels about that. And I said, So we are working very closely with the Member states, and Russia is building new physical and financial infrastructures and restructuring trade patterns, logistics and supply chains to circumvene all sanctions.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), These circumventions shows that sanctions are working as intended and cutting off access to many goods. Of course, sanctions cannot win the war alone, and there will always be profiteers looking to make a quick buck however they can, including by evading sanctions. These actions damage all our collective efforts, all the actions to try to circumvent the sanctions or to take profits in the framework of the sanctions.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), So we need to work closely again with our partners to prevent circumvention. We need all member states to play their part, and the Commission will continue to support them. For example, our sanctions now allow us to list people who facilitate the evasion of sanctions. The Commission is continually revising its guidance and facts, and the Commission regularly convenes meeting with Member States to discuss implementation and to exchange best practices.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), We also need to act with all international partners. This is why we have appointed an EU International Special Envoy for sanctions implementation. The envoys work as focuses on stopping Russia's attempts to procure key technologies for the battlefield, prohibited by all sanctions, that make their way to reach via third country.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), We are also in regular contact with third countries to learn together how to best limit sanctions Circumvention. Honorable members, Thank you for the opportunity to speak to you today because it's not enough to put into place 11 package of sanctions. The most important part is to be sure that it's possible to enforce those sanctions and again, to fight against all forms of circumvention.

SOUNDBITE (English), Didier REYNDERS, European Commissioner for Justice, and Commissioner for Competition (ad interim), And I count on your support to continue to work on this, sometimes also with some legislative proposals. Of course, I know that you are sharing the commission's commitment towards Ukraine, and I thank you for it. So I will continue to work together and I will be very pleased to hear your views today. Thank you.