Revised EU sanctions policy is hampering vital supply of third world Russian fertilizers


The European Commission published on August 29 an updated text of clarifications on the application of sanctions for fertilizers produced in or exported from Russia, including potassium chloride, as well as complex fertilizers containing nitrogen, phosphorus and potassium.

Brussels’ new position now makes it impossible to supply Russian fertilizers to third countries, including Africa, which use European operators and infrastructure, as well as EU territory.

The move clearly contradicts the bloc’s own previous statements regarding trade in agricultural products and fertilizers between Russia and third countries, especially where it puts people in developing countries on the brink of starvation.

Earlier this year, on April 8, the EU imposed sectoral sanctions on fertilizers of Russian origin. These sanctions prohibited the purchase, import or transfer of these products to the EU, whether or not they exceeded the quotas that Europe had set itself. The quotas amount to 837,500 tons of potassium chloride and 1,577,800 tons of other types of fertilizers containing nitrogen, phosphorus and potash.

Initially, the bans did not apply to the transit of Russian fertilizers to third countries using EU infrastructure. On August 10, however, Brussels further toughened the sanctions by extending the ban to European operators’ activities related to the transit of Russian fertilizers destined for third countries across the bloc’s administrative borders. Moreover, under the new sanctions regime, the supply of fertilizers to third countries, even without the use of EU territory and infrastructure, will be considered a sanctions violation. The provision of transport, transhipment and trading services by European companies, as well as all related services, such as insurance, financial and brokerage operations and technical assistance, are now prohibited.

The European Commission’s August 29 revision contains an important clarification that can be seen as a violation of the immutable principles of international trade. According to the EU chief executive, operators from EU countries are prohibited from making payments for Russian goods delivered to Europe, even if the agreements were signed before the sanctions were imposed. Since the payments are part of the performance of a contract, the Commission is, in effect, forcing European operators to unilaterally breach contractual obligations to Russian suppliers.

The Commission says the growing number of sanctions is aimed at significantly weakening Russia’s economic base by depriving it of its most important markets for its products and severely limiting its ability to wage war.

When the sanctions were first imposed in the spring of 2022 after Russia invaded Ukraine, the European Union said it would target the Russian government, companies producing military products or services, officials making decisions in the military field and public figures loyal to the Kremlin. , but not the general population of Russia, which, according to Brussels, had no direct connection with the conduct of the invasion of Ukraine by the Russian Federation.

Despite these statements, subsequent decisions by European institutions have made ordinary Russian citizens hostage to sanctions. EU countries have drastically restricted or frozen the issuing of visas to Russians, which has essentially prevented all tourists from the Russian Federation from entering Europe. Bank payment systems Visa and MasterCard stopped handling cards issued in Russia, the consequences of which were felt by most Russian citizens. Fearing sanctions, many Western companies producing consumer goods – household appliances, clothing and food – have reduced their activities in Russia, which has also affected the interests of large segments of the population.

Sanctions have also hit Europeans in the form of rising energy and food prices and unprecedented inflation. Social tension is also rising as protest sentiments in many European cities bring residents together for increasingly volatile rallies, and people openly express their displeasure at the adverse effect of the sanctions.

The European Union has gone even further by extending sanctions to the developing world. The ban on transit operations of Russian fertilizers to third countries has had devastating consequences for billions of people in Asia, Africa and Latin America in the form of severe shortages of fertilizers, the decline of agriculture and the spread of hunger.

The new clarifications from the EU directly contradict both the numerous public statements made earlier by European politicians and the general principles enshrined in the preamble of the seventh sanctions package, which proclaims that food and energy security in the world is the priority. of the EU. In particular, it clarifies that none of the measures provided for in the Sanctions Regulation aims to restrict trade in agricultural products, including wheat and fertilizers, between third countries and Russia.

Europe’s latest proclamation grossly violates the Memorandum of Understanding between Russia and the UN Secretariat to facilitate the promotion of Russian foods and fertilizers in world markets – the so-called ‘Grains Deal’ which was signed on July 22 in Istanbul. The memorandum was supposed to solve the problem of unhindered supply of Russian food and fertilizers on the world market, as well as remove obstacles in the field of finance, insurance and other transit service operations.

This does not happen.

In practice, Brussels’ sectoral sanctions on fertilizers have only cemented the impossibility of supplying these products to third countries by involving European economic operators, infrastructures and the administrative territory of the EU. An additional layer of cynicism about the situation is compounded by the fact that the EU set quotas on fertilizers and then removed them from sanctions.

Meanwhile, Russia is ready to give African countries hundreds of thousands of tons of fertilizer stuck in European ports. If they are unlocked. The situation in the port of Riga, the capital of Latvia, is paradoxical. A ship loaded with 55,000 tonnes of potassium chloride produced by Russian company Uralchem ​​has been anchored there since early March (before sanctions were imposed). The Latvian authorities have not been able to take a decision on this cargo for more than six months and have not allowed the ship to leave the port or to moor to unload the fertilizers.

The Initiative on Safe Transportation of Grains and Foodstuffs from Ukrainian Ports, which was signed on July 22 between the UN, Russia and Turkey, is not being implemented. The document guarantees the safe export of Ukrainian agricultural products from Ukrainian Black Sea ports which are still under the control of Kyiv, with the logistics of the operations being under the jurisdiction of the UN. But out of 2 million tons of cereals that were exported, only 3% was sent to the poorest countries, the rest went to the European Union. Complicating matters is the fact that export restrictions on Russian grain and fertilizers were never lifted. As a result, Moscow may refuse to participate in the grain deal.

The European Union may expand its global trade sanctions regime in the future. Such measures can in no way be excluded. This means that the ongoing sanctions war amid Russia’s brutal attempt to revive its empire by forcing Ukraine back into its orbit could quickly turn into a global humanitarian disaster.


Fr

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