Daniel Tannebaum on EU Russia Sanctions and US Policy Shifts

EU's Role in Russian Sanctions

• 🇪🇺 The EU is expected to continue leading on Russian sanctions, even as the US under President Trump has reduced its focus.
• 🎯 The upcoming 19th EU sanctions package may target entities in third countries like China and India.
• ⚠️ Enforcement has been a key weakness, not only in Europe but also from the US and UK, regarding previous sanctions.

US Sanctions Policy Under Trump

• 📉 President Trump has imposed no new sanctions on Russia in nine months, with a focus shifting towards tariffs which generate revenue.
• 🚢 A sanctions package on Russia's shadow fleet has been prepared for months but remains unsigned by the President.
• ❓ The argument that sanctions impede negotiations with Russia is questioned, given continued Russian aggression.

Challenges for European Union

• 🤝 Meaningful discussions between the US and EU on Russia sanctions have only recently begun, indicating a need for continued EU leadership.
• 📢 The EU must educate its member states on effectively enforcing and policing sanctions to remind companies of potential consequences.
• 🌍 The EU needs to be more aggressive in administering and enforcing sanctions to compel companies to make choices about their business dealings.

Economic Impact and Third Countries

• 💸 Russia's economy is experiencing impacts, with fewer petro dollars expected and increasing war spending.
• 🛢️ Significant oil trade between India, China, and Russia continues, as these countries have not faced substantial pressure to choose sides.
• ⏳ Isolating and impacting an economy the size of Russia takes time, and even measures like banning Russian LNG will have a delayed effect.

Client Advisory and Enforcement Gaps

• 🏢 Most clients have exited Russia quickly after the invasion, but some European clients continue operations where it's not illegal.
• ⚖️ The lack of robust enforcement, similar to that seen with Iran, Libya, Cuba, and North Korea, means companies don't feel pressure to cease borderline activities.
• 🗺️ Historically, European sanctions have not been as significant until the 2022 invasion, and there's a need for a singular agency in Europe to administer and enforce sanctions, akin to the US OFAC.