EU adopts new sanctions against Russia, including LNG

FILE PHOTO: High Representative of the European Union for Foreign Affairs and Security Policy Josep Borrell arrives for the second day of a European Union leaders summit as EU leaders attempt to agree on Russian oil sanctions in response to Russia's invasion of Ukraine, in Brussels, Belgium May 31, 2022. REUTERS/Johanna Geron/File Photo

By Julia Payne

BRUSSELS (Reuters) - European Union countries adopted a 14th package of sanctions on Russia that aims to close some circumvention loopholes and hits Russia's gas exports for the first time, EU foreign affairs ministers said in a statement on Monday.

Western powers imposed sweeping sanctions on Moscow after Russia launched a full-scale invasion of Ukraine in February 2022, which has been progressively ramped up since.

The package will also add 116 entities and individuals to the sanctions list bringing, the total to more than 2,200.

The new restrictions on gas aim to reduce Russia's revenues from liquefied natural gas (LNG) exports by banning trans-shipments off EU ports and a clause allowing Sweden and Finland to cancel some LNG contracts. The measures stop short of an EU ban on LNG imports, which have risen since the start of the war.

The sanctions will take effect after a nine-month transition period. The package also prohibit new investments and services to complete of LNG projects under construction in Russia.

Some central European countries still receive pipeline gas from Russia via Ukraine. The EU banned Russian oil imports in 2022 with some limited exemptions.

The new package aims to limit circumvention by creating more responsibility and penalties at member state level for those found flouting the regulations.

The European Commission, the EU's executive arm, had also proposed expanding the so-called "No Russia clause" passed in a previous package. The measure would have made subsidiaries of EU companies in third countries contractually prohibit the re-export of their wares to Russia for high priority goods, including those that have a dual-use for military purposes, as well as ammunitions and firearms.

However, it was scrapped at Germany's behest. The clause may be added later pending an impact assessment, diplomats said.

SHADOW FLEET

The package also aims to crack down on the so-called shadow fleet helping Russia's war effort by creating a framework to add ships to the list of sanctions, such as oil tankers as well as vessels moving North Korean ammunition to Russia.

Vessels can be designated for instances including the "transport of military equipment for Russia, the transport of stolen Ukrainian grain and.. .for instance through the transport of LNG components or trans-shipments of LNG," the EU ministers' statement said, adding 27 ships were listed.

Included in the measures are restrictions on helium, rare earths and manganese ores as well as limits to Russian funding for think tanks and NGOs.

EU countries are now debating a package that would better align sanctions against Belarus that predate Moscow's invasion of Ukraine with the ones targeting Russia since 2022. Belarus has been major loophole for goods reaching Russia, but members have been reluctant to tackle this issue over concerns around Belarus' major fertilizer exports.

(Reporting by Julia Payne, additional reporting by Bart Meijer; Editing by Alison Williams and Alex Richardson)