David O’Sullivan, the EU envoy for sanctions, estimates on Euronews that circumventions of this regime are limited and that the Russian economy is suffering. He also responds to criticism of the EU’s response to the war in the Middle East.
While the West continues to sanction Russia for its illegal invasion of Ukraine, foreign companies have entered the game and are supplying the Russian army with essential technologies banned by the European Union, the United States and the United Kingdom.
The EU’s international special envoy for sanctions implementation, David O’Sullivan, has visited third countries with the aim of limiting sanctions evasion. He gave us an interview in our studios in Brussels.
Shona Murray, Euronews:
“So you are sent for the sanctions, but essentially you are trying to ensure that the potential of the sanctions is maximized so that other countries in the world or private entities do not reduce the scope of the sanctions put in place by the United States, the European Union and the United Kingdom. Tell us about your role.”
David O’Sullivan, EU international special envoy for sanctions implementation:
“This is exactly what we are trying to do. We have implemented an unprecedented battery of sanctions against Russia, more than we have ever sanctioned any other country. They concern 60% of our imports . Past imports from Russia are placed under a sanctions regime, as are 55% of our exports. It is obvious that it is very important to ensure effective implementation. And one of the elements of this – which is my responsibility – is to seek to convince the countries which are not aligned with our sanctions.”
“Access to critical products is more difficult, slower and more expensive for Russia”
Shona Murray:
“What would you say are your goals for success over the next year? Do you hope to ensure that these critical assets and infrastructure do not end up on the battlefield in Ukraine?”
David O’Sullivan:
“We are already seeing that it is increasingly difficult for Russia to acquire this. I think we have to be realistic. There will always be some degree of circumvention. There is money to be made. Good many of these products have already been sold, previously, to other countries and are sort of on the open market. If anyone wants to try to buy them, they’re still available. But our main goal, and I think “What we’re doing is making access to these products harder, slower and more expensive for Russia.”
Shona Murray:
“Are you concerned, however, that Russia will completely reorient its economy and be able to source from huge countries like China?”
David O’Sullivan:
“We must remember what is at stake: most of these products are typically semiconductors, integrated circuits and fiber optic drives, flash memory cards. Products which have a perfectly innocent civilian application under normal circumstances . But they are also made largely with American or European technologies. They are not easy to reproduce in other countries. So it is difficult for Russia to obtain them since we have stopped exporting them and we let’s persuade the other countries, the intermediate countries, not to export them to Russia anymore. And I think, yes, we have evidence that it’s more and more difficult. The Russians are using substitute products, sometimes Chinese origin, but are of inferior quality, to be frank. So this gives the Ukrainian army a certain technological advantage on the battlefield.”
Ukraine and the Middle East: “We can handle more than one crisis at a time”
Shona Murray:
“Have things changed for you or become more difficult since the horrific terrorist attack by Hamas on October 7? We have seen criticism from the likes of King Abdullah of Jordan, for example, who was concerned that the EU’s position on international humanitarian law protecting civilians in Palestine was not the same – or did not raise the same concerns – as for civilians in Ukraine.”
David O’Sullivan:
“I think they understand that for the Europeans the situation is different. Russia attacked Ukraine without any provocation. Ukraine posed absolutely no threat to Russia. So this is an invasion unprovoked and on a large scale by a sovereign country. I think people understand why we in Europe need to respond very strongly. Vladimir Putin’s ambition to restore Russia’s hegemony in his immediate neighborhood is a something that we cannot accept. So I think people understand that the situation is different. That is why, as Europeans, we have a special obligation in this context. Of course, I would say that we also have taken a tough stance on what’s happening in the Middle East. But I don’t feel like people see it as some kind of binary choice. I often explain that we can handle more than one crisis at a time.”
“The Russian state probably has 400 billion euros less to spend”
Shona Murray:
“But some member states say these sanctions are unnecessary and only weigh on the European economy. Citizens are feeling the repercussions at a time of cost of living crisis. And yet the Russian economy is experiencing growth, even if it promises to be lower: 1.1% in 2024 according to the IMF. What do you say to those who say that sanctions are useless and that Europeans only suffer?
David O’Sullivan:
“Let’s be honest: this has a cost for us because we have traditionally had a lot of trade with Russia. This is not, however, a major element of our commercial positioning. And I think that companies are able to to find other markets. Regarding our effectiveness, honestly, we had three objectives: the first was to deprive Russia – the Russian army – of technology. The second was to deprive the Russian state of income. And the third was to impose a high cost on the Russian military-industrial complex. On these three objectives, I think we have been very successful. We see that Russia is having difficulty obtaining the technology it needs and that it is now turning to Iran or North Korea. We also see that the Russians are forced to deploy older weapons and tanks to keep their armed forces equipped. In terms of revenue, we estimate that the The Russian state probably has 400 billion euros less to spend. It was traditionally in budget surplus, in terms of its public spending. Today, it has a deficit of 2 to 3%. Certainly, the Russian economy is experiencing slight growth. But we need to look closely at why this is the case. This is because the Russian state invests heavily in its military. 30% of Russian public spending is now devoted to the army, or almost 10% of GDP. If you put your economy on a war footing, of course you can redirect everything towards the military, but you are cannibalizing the economy. There is no investment in social protection, education, health, research. So the prognosis for the Russian economy – and this is the third objective, namely to reduce its industrial capacity – is not good.
Russian oil: “The Indians’ argument is that they are the ones making the profits, not the Russians”
Shona Murray:
“India buys a lot of Russian oil, refines it and sends it back to Western countries. This seems counterproductive. What is your position on this and how big this loophole (in the sanctions regime) seems to be? ?”
David O’Sullivan:
“We decided from the start not to impose an embargo on Russian oil exports as we did, for example, with Iran, and this because many countries in the South depend on continued deliveries Russian oil. And we have taken the position of allowing these flows to continue to circulate. It is therefore perfectly legal for other countries. We no longer buy Russian oil, but other countries can buy it legally.”
Shona Murray:
“And then sell it to Westerners?”
David O’Sullivan:
“And we have imposed a price cap at which oil can normally be purchased, so as to continue to reduce Russia’s revenues. We estimate that in the first half of this year, oil revenues fell by 50% in Russia. But yes, Russia is still able to export. And yes, in some cases like India, these other countries refine it and send it back to us. The Indian argument is that it They are the ones making profits, not the Russians. I think our main objective is to ensure that Russian revenues are severely affected by the oil price cap and I think we have plenty of evidence that that is the case.”
