Welcome to Wider Europe, RFE/RL’s newsletter focusing on the key issues concerning the European Union, NATO, and other institutions and their relationships with the Western Balkans and Europe’s Eastern neighborhoods.
I’m RFE/RL Europe Editor Rikard Jozwiak, and this week I’m drilling down on two issues: the latest — and weakest — sanctions on Russia; and Schengen entry (of sorts) for Bulgaria and Romania.
Brief #1: The EU’s New Sanctions Package On Russia: Weak And Watered Down
What You Need To Know: Just before the winter holidays and only a few days after a historic but turbulent European Union summit in Brussels, the bloc finally managed to agree on its 12th round of sanctions against Russia since its full-scale invasion of Ukraine in February 2022.
From EU officials speaking on background, I understand that the aim is to have yet another sanctions package ready for the second anniversary of the invasion on February 24 and that the Russian missile attacks on Ukrainian cities over the holidays convinced more officials in Brussels that further restrictive measures are needed.
That said, it still takes a while for all 27 member states to agree on new sanctions, with the latest round taking over a month to green-light. And with no consensus on how to tackle the Russian energy sector, dramatic measures are in short supply.
The biggest takeaway is that the EU, from the start of the new year, has banned imports of both natural and synthetic Russian diamonds, a business that generated over $4 billion for Moscow last year. Starting from March 1, imports of Russian diamonds processed in third countries will also be banned.
The rest of the sanctions package was much weaker tea. A few more Russian exports face EU import bans in the future — liquefied petroleum gas (LPG), processed aluminum, pig iron, and copper wires — which should deprive the Kremlin of an estimated $2 billion to $3 billion in revenue. The bloc will also cease the export to Russia of thermostats, static converters, resistors, propellants, and lithium batteries — components also used in drones and other military equipment. And it will be prohibited for EU companies to provide services such as software for industrial design and for Russian nationals to hold high positions in EU companies providing crypto-asset services.
Deep Background: Senior European Commission officials briefed journalists that the 12th package would reduce Russia’s war chest and close previous sanction loopholes. But looking at the final text, it seems that the EU has created new loopholes and exceptions as well. The diamond ban, for example, doesn’t cover industrial diamonds. The LPG ban doesn’t come into effect for another year. And some of the other import bans mentioned above also have phase-in periods ranging from between six to 18 months.
Croatia got an extension till 2025 on its exemption on importing Russian vacuum gas oil, an oil product often upgraded to diesel or gasoline, and the same goes for crude oil imports to some landlocked Central European countries. Exemptions related to the imports of certain Russian steel products were also prolonged from 2026 to 2028.
While no measures so far target the Russian nuclear sector, Hungary received legal assurances that there will be sanctions exceptions — so-called “derogations” — for all services related to the extension of Hungary’s Paks nuclear power plant, which the Russian energy giant Rosatom is working on.
Germany also pushed for the final sanctions text to include clarification regarding what Russians traveling into the European Union can bring with them. This was after widespread media reports in the fall that some EU border guards were seizing personal items such as toothpaste and clothes. The text now notes that the EU allows “the entry into the Union of personal effects, which do not pose significant circumvention concerns, such as personal hygiene items, or clothing worn by travelers or contained in their luggage, and which are clearly intended for their or their family members’ strict personal use.”
While cars with Russian license plates are forbidden from entering the bloc, there are now exemptions for diplomatic vehicles entering the EU and for cars belonging to EU citizens living in Russia.
Drilling Down
- Along with the new exemptions, many of the new measures are, in fact, either lacking bite or have been completely watered down from the initial proposal, seen by RFE/RL, that was first presented to member states by the European Commission in November.
- Take the oil cap that was set up late last year with the Group of Seven leading industrial nations at $60 per barrel. The cap will not be touched, but Brussels is pushing for more transparency as regulators fear that extra costs — for example, related to insurance and freight — are being inflated to create more revenue for Russia. The problem here is that the EU can ask for more information from shipping companies but can do little in the way of enforcement.
- It’s a similar issue with another novelty introduced in this latest package. The EU will introduce a notification register that will list all sales of EU tankers to all third countries in order to see how many of them are now part of Russia’s “dark fleet” of vessels carrying oil around the world that is priced above the cap. The dark fleet is estimated at around 200 vessels, including those from EU countries. So, there isn’t an actual ban on selling tankers to Russia. This is just a transparency measure for Brussels to “understand how the chain works,” according to an EU official with knowledge of the issue who spoke on the condition of anonymity.
- Other proposed sanctions have also been watered down. Take the list of mainly Russian companies that EU firms aren’t allowed to trade with anymore because Brussels suspects them of contributing to Russia’s war machine. In the original November 2023 proposal, there were 31 companies — all Russian, apart from one from Singapore, one from Uzbekistan, and two from Kazakhstan. When the final list was published on December 18, the two Kazakh companies had been removed. When I asked a European Commission official on background why this was, I was told that it was connected to the EU’s engagement with third countries.
- In perhaps the starkest example of watering down, the original European Commission proposal stated that EU subsidiaries of Russian companies must get an authorization permit from Brussels to transfer funds above 100,000 euros ($109,000) either to Russia or to a third country — a move that would potentially make it harder for Russia’s EU subsidiaries to survive. What remains now — again — is just a notification system, meaning that the companies don’t need a green light to send money out of the EU. While it may increase transparency, it certainly won’t squeeze the Kremlin much economically. A European Commission official, speaking on the condition of anonymity as they weren’t authorized to speak on the matter, said that certain member states were concerned that the original measure could be a heavy administrative burden for countries every time they needed to grant a potential authorization.
Brief #2: Bulgaria And Romania Partially Join Schengen
What You Need To Know: The European Union on December 30 agreed on the removal of internal border controls with Bulgaria and Romania for air and maritime traffic, with the new measures expected to come into force by March 31. For Sofia and Bucharest, this is a historic step, as the two countries have been waiting to join the bloc’s visa-free Schengen Area ever since they became EU members in 2007. (Schengen now includes all of the EU member states, apart from the island nations of Cyprus and Ireland, as well as the non-EU countries of Iceland, Liechtenstein, Norway, and Switzerland.)
This is also an unprecedented step as the two countries are only being granted partial Schengen entry, as for now land border controls between the two countries and the rest of the EU will remain. This means that motorists will continue to queue at borders, such as between Bulgaria and Greece and between Romania and Hungary, to enter the de facto Schengen zone, which won’t help Romanian and Bulgarian hauling companies. The decision to have, for the first time, a staged Schengen entry — air and maritime first, followed by the opening of land borders — could potentially be a formula used for Moldova and Ukraine and countries in the Western Balkans when they eventually join the EU.
Deep Background: The decision comes after a crushing disappointment for Bulgaria and Romania at the end of 2022 when they were blocked, but Croatia secured full entry into the Schengen Area, applicable as of January 1, 2023. That time — as has been the case for many years — the Netherlands wasn’t satisfied that Sofia and Bucharest had fulfilled all the criteria for joining Schengen, especially when it came to the Cooperation and Verification Mechanism (CVM). The CVM was set up by the European Commission when Romania and Bulgaria joined the EU to ensure progress on judicial reform and the fight against corruption in both nations and to combat organized crime in Bulgaria.
In the fall of 2023, the CVM process was formally closed for both Bulgaria and Romania. With a European Commission fact-finding mission to Bulgaria near the end of last year giving a positive assessment about Sofia’s readiness to join Schengen, the Netherlands finally relented. This was confirmed at a Dutch parliamentary debate on December 20. It’s possible that the Dutch change of heart was due to a desire to sign off on the Schengen issue before the likely formation of a more EU-skeptical government, led or heavily influenced by the populist Geert Wilders, who finished first in parliamentary elections in November 2023.
Drilling Down
- Instead, the biggest obstacle to the pair’s Schengen entry proved to be Austria. For some time, Vienna has expressed concern about including Bulgaria and Romania in the visa-free zone, citing fears of increased illegal immigration into the EU, with migrants using the two countries as transit points. The conservative-led Austrian government has taken much harder lines on many issues, notably on everything pertaining to migration, but also by delaying its approval of the EU’s Russia sanctions and by watering down positive EU language on Ukraine. For context, Austria will hold parliamentary elections in the fall, in which polls indicate that the right-wing populist Freedom Party of Austria will comfortably finish first. In the end, Austria, Bulgaria, and Romania worked out a deal at the end of 2023, helped along by other EU member states and the United States.
- Apart from the partial accession to Schengen in three months’ time, there was also a commitment from Bucharest and Sofia to make several key changes in the near future. This includes a tripling of personnel from the EU’s external border agency Frontex on Bulgaria’s border with Turkey and beefing up security on its border with Serbia.
- The Austrians are also asking the European Commission to increase financing to strengthen Bulgaria’s and Romania’s external borders with more fences, drones, and electronic surveillance systems. Vienna has also asked to deploy EU officials who can advise about documents for some flights at airports in Bulgaria and Romania and to conduct random spot checks upon arrival in Austria. Unsurprisingly, the Austrians are also asking both countries to take back all third-country asylum seekers, notably from Afghanistan and Syria, who have come to Austria via Bulgaria or Romania.
- Perhaps the most interesting commitment from the European Union is boosting controls on the land border between Bulgaria and Romania — a border that is already under a good deal of surveillance. Some diplomats I spoke to suggested that this might be being done to prepare for a future decision to “decouple” Romania from Bulgaria, meaning that the former will be a fully fledged Schengen member before the latter.
- The reason for this suggestion is that Bulgaria is considered by Brussels to be the more problematic of the two — mainly due to its border with Turkey, which is one of the main migration routes into the EU. While the 500-kilometer Bulgarian-Turkish border is partially fenced and guarded, there are still places, especially in the mountains, that can be used for illegal crossings, and EU officials have sometimes voiced concerns about the poor cooperation of Turkish border guards.
- So, when can Bulgaria and/or Romania become full Schengen members? Few believe there will be any movement before the elections for the European Parliament in June. A joint Austrian-Bulgarian-Romanian statement issued when the deal was announced just mentioned “a commitment to discuss in 2024 a date for a possible lifting of the checks at land borders.”
- The statement from the Council of the EU, where ministers from each member state meet to amend and adopt laws and coordinate policies, noted that it “shall endeavor to take a decision lifting checks on persons at internal land borders,” whereas the European Commission said that discussions will continue in 2024 and “a decision by the Council on this matter is expected to be taken within a reasonable time frame.”
Looking Ahead
Brussels is still slowly waking up after the Christmas and New Year’s holidays, but on January 10 a NATO-Ukraine Council on the ambassadorial level will be convened in Brussels in which Kyiv will brief the military alliance members about the latest barrage of Russian missiles targeting Ukrainian cities and key infrastructure. It’s likely that NATO will reiterate its call on members to provide the war-torn country with more air-defense systems.
That’s all for this week. Feel free to reach out to me on any of these issues on Twitter @RikardJozwiak, or on e-mail at [email protected].
Until next time,
Rikard Jozwiak
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