EU prepares to hit Putin with new sanctions plan next week

Brussels is drawing up plans for a sixth package of sanctions against Russia over its invasion of Ukraine, with measures expected to be presented to European Union countries early next week, according to several diplomats.

The new package is set to include some form of ban on Russian oil imports, and may also target more Russian banks by expelling them from the SWIFT international payments system, four diplomats told POLITICO.

As the Ukraine war drags on, demands have been growing on EU leaders to cut off the Kremlin’s vital revenue stream that comes from Russia’s lucrative energy sector, particularly exports of oil and gas.

In its five previous packages, the EU has backed a ban on coal and removed a number of Russian banks from SWIFT in an effort to ratchet up economic pressure on Moscow. But as evidence emerges of atrocities reportedly committed by Russian forces in Ukraine, Western governments have stepped up military support for Kyiv and resolved to intensify sanctions against President Vladimir Putin and his regime.

Large Russian banks such as Gazprombank and Sberbank have so far been excluded from the sanctions, as they are involved in energy transactions. But European Commission President Ursula von der Leyen told German newspaper Bild on Sunday that the new sanctions will likely hit Sberbank, Russia’s largest bank. One EU diplomat expected the Commission to target all Russian banks, including Gazprombank.

Some countries, such as the Baltics, are also pushing for more measures to tackle Russian disinformation operations in the sixth package. Brussels has previously banned Kremlin-backed media outlets RT and Sputnik. The more hawkish capitals have suggested several other Russian media outlets should be banned in the EU as well, while others worry such a measure could backfire against the West, as the move might be used for Russian propaganda goals.

On oil, it’s unclear how quick and comprehensive a future phaseout of imports from Russia will be. With oil and gas revenue making up a critical source of funding for Russia’s war machine, sanctions on energy are seen as a vital next step for the EU’s response to the invasion.

But countries like Germany and Hungary, which rely on Russian energy imports, have been trying to water down the proposals. The oil ban is likely to differentiate between various grades of Russian oil and their method of delivery — via shipping or pipelines. There is also discussion ongoing in Brussels about the need for potential transition periods to give EU countries time to prepare for any embargo on oil imports from Russia.

One EU diplomat said they expected the next sanctions package to be presented to EU countries as soon as Monday, after which EU ambassadors could discuss it during the week and potentially adopt it by Friday.

However, others were more cautious, arguing there has been no formal decision on timing from the European Commission just yet, even though they all expect some kind of initiative early in the week. “Next week is a reasonable time to get the proposals,” one EU senior diplomat said.