EU Official Says Russia Enforcement Is Priority, Hints at Penalties

The U.S. and the EU are continuing to prioritize export control and sanctions enforcement against Russia, said Valdis Dombrovskis, the European Commission’s top trade official, and he suggested the EU may soon issue penalties against companies for evading the bloc’s sanctions. He also said the two sides are working on ways they can both put in place new export controls proposed at consensus-based multilateral regimes, such as the Wassenaar Arrangement, even if they are blocked by Russia.

Dombrovskis, speaking during a Jan. 31 event hosted by the Center for Strategic and International Studies, noted that European and American officials already have worked closely on a host of export control enforcement issues, and they are continuing to travel on “joint missions” to countries that are showing “unusual trade patterns” involving Russia. The U.S and the EU have specifically named Kyrgyzstan, Tajikistan and other Eastern European and Central Asian nations (see 2310230021, 2308110059, 2311140037 and 2304240014).

That effort has so far resulted in a “varying degree of engagement and commitment” from those countries to “actually address these circumvention problems,” Dombrovskis said. He said some countries visited by the EU and the U.S. “are currently considering changing their behavior,” but more work is needed.

“It's a topic which requires constant effort and constant attention and also coordination between the EU, the U.S. and also other democratic countries which are actually imposing sanctions,” he said, adding that Russia is always looking for new ways to “bypass” the restrictions.

Asked specifically what the EU can do to improve enforcement, Dombrovskis said imposing penalties against European companies who knowingly violate Russia restrictions is something “we foresee as a possibility.” He also said the EU is open to blocking trade with foreign companies trying to evade the sanctions.

“We foresee the possibility of a prohibition of EU companies doing business with third-country companies which are engaged in sanctions intervention, so to say, a blacklisting of those third country companies,” he said. “And there will be some examples.”

He added: “It's clear that this question of enforcement is going to stay on our agenda as we are putting sanctions against Russia.”

Dombrovskis’ comments came one day after the U.S.-EU Trade and Technology Council met in Washington, where the two sides discussed a range of trade issues, including “enhancing and better coordinating our export control regimes to prevent the exploitation of dual-use technologies,” the White House said Jan. 31.

The EU recently unveiled package of proposals aimed at strengthening EU controls and investment restrictions on dual-use technologies (see 2401240078), including one proposal that could allow it to implement controls discussed at regimes like Wassenaar even if they’re blocked from being adopted by Russia (see 2309270015).

Dombrovskis said the EU discussed the issue during the TTC meeting this week because “the U.S. is looking at the same topic.” He said the two sides are speaking about how “we can approach this in a coordinated way.”

The bloc wants to treat proposals blocked at Wassenaar by Russia as “consensus-minus-one decisions,” Dombrovskis said, which would allow the EU to implement the restrictions “uniformly at the European level.”

European Commission Executive Vice President Margrethe Vestager, also speaking during the event, said the EU is “very focused on the risk of technology leakage.” Asked about how the EU views China, Vestager called Beijing a “systemic rival,” but she said the U.S. and the EU don’t yet agree on all issues involving China.

“We have, I think, maybe more converging views of China than we had five years ago,” Vestager said. "But still, we have slightly different approaches."

She noted the EU has “equipped ourselves with new tools” to protect sensitive technologies from being sent to China, specifically mentioning export controls and investment screening restrictions. “We are, I think, very clear-eyed about the threats that the Chinese economy and initiatives can pose, while at the same time insisting that China is a fact of life on this planet, and we have a trading relationship with China as well.”

She said the EU views its relationship with China through the prism of: “As open as possible, as closed as necessary.”