The role of sanctions in countering the Russian Federation’s war of aggression against Ukraine
- Author(s):
- Parliamentary Assembly
- Origin
- Assembly
debate on 26 June 2024 (19th and 20th sittings) (see Doc. 16000, report of the Committee on Political Affairs and Democracy,
rapporteur: Ms Yelyzaveta Yasko). Text
adopted by the Assembly on 26 June 2024 (20th sitting).
1. The Russian Federation’s aggression
against Ukraine, which started in 2014 and escalated into the unprovoked
full-scale military invasion of Ukraine in 2022, is a major breach
of international law which warranted the expulsion of the Russian
Federation from the Council of Europe. Standing in solidarity with Ukraine
and its people, the Parliamentary Assembly reiterates its firm condemnation
of the Russian Federation’s war of aggression against Ukraine, and
the uncountable wrongful acts and violations of international law
committed by the Russian Federation.
2. The Russian Federation’s war of aggression against Ukraine
must be stopped, and all those responsible must be held accountable
for their crimes. The Assembly welcomes the progress made towards
setting up a comprehensive system of accountability which has resulted,
as a first step, in the establishment of the Register of Damage
Caused by the Aggression of the Russian Federation against Ukraine
(the Register), under the aegis of the Council of Europe. The Assembly
emphasises the need to ensure that the Register also includes all
damage caused to the temporarily occupied territories.
3. The Assembly calls for the swift completion of the system
of accountability through the establishment of a compensation mechanism
and a special tribunal to investigate and prosecute the Russian
Federation’s political and military leadership for the crime of
aggression. The international compensation mechanism should be primarily
aimed at compensating citizens, including those who have been forced
to relocate from the temporarily occupied territories. The Assembly
calls for consultations to be started as soon as possible on the draft
agreement between the Council of Europe and the Government of Ukraine
on the establishment of a special tribunal for the crime of aggression
of the Russian Federation against Ukraine, including its statute,
and on a possible draft enlarged partial agreement governing the
modalities of support to such a tribunal, its financing and other
administrative matters.
4. The Assembly has already acknowledged that a wide range of
legal, political and diplomatic measures are necessary to stop the
Russian Federation’s war of aggression against Ukraine. Thus, it
has taken a clear stance in favour of sanctions against the Russian
Federation and key figures of Vladimir Putin’s regime, including
in its
Resolution 2506
(2023) “Political consequences of the Russian Federation’s
war of aggression against Ukraine”,
Resolution 2529 (2024) “Situation
of the children of Ukraine” and
Resolution 2539 (2024) “Support
for the reconstruction of Ukraine”. The Assembly reiterates the
recommendations contained therein, as well as in its
Resolution 2252 (2019) “Sergei
Magnitsky and beyond – fighting impunity by targeted sanctions”
and
Resolution 2542 (2024) “Sanctions
against persons on the ‘Kara-Murza list’”, in which it invites all
States that have not yet adopted Magnitsky-type targeted sanctions
laws to do so without further delay. The Assembly also reiterates
its call on Council of Europe member States to declare the current
Russian regime a terrorist one, as set out in
Resolution 2463 (2022) “Further
escalation in the Russian Federation’s aggression against Ukraine”.
5. The Assembly recognises that the propaganda and disinformation
spread by the Russian media serve as a tool of warfare used both
on the territory of the Russian Federation and abroad, especially
in the so-called global south countries. The channels used by the
aggressor State to influence the outside world should be sanctioned.
In order to achieve this, sanctions should be imposed on individual
propagandists who promote the ideology of the “Russian World” and
incite war and hatred against Ukraine.
6. Faced with the inability of the United Nations Security Council
to resort to Article 41 of the Charter of the United Nations, given
that the aggressor State Russia is a permanent member of the United
Nations Security Council, a coalition of States and the European
Union have introduced and regularly updated an unprecedented range
of restrictive measures aimed at holding the Russian Federation’s
authorities, elites and their accomplices accountable for their
wrongful acts, and to hamper the Russian Federation’s capacity to wage
the war of aggression against Ukraine, by targeting its military
and economic sectors. In addition, sanctions have been imposed against
Belarus, in response to its involvement in the Russian Federation’s
war of aggression against Ukraine, and against Iran in relation
to the manufacture and supply of drones which are being used by
the Russian military in Ukraine. The imposition of sanctions contributes
to the efforts to restore justice, bring suffering to an end and
deter the aggressor State Russia from any temptation to further
broaden its military threat in Europe.
7. Among the most significant restrictive measures against the
Russian Federation are the imposition of an oil price cap and export
control measures, as well as specific targeted sanctions against
individuals and companies directly involved in the Russian Federation’s
war of aggression against Ukraine. Thanks to these sanctions, the
Russian Federation has lost US$113 billion in revenues related to
oil exports, which has considerably reduced the inflow of foreign
currencies. Sanctions have also strongly limited the Russian Federation’s
access to goods and technologies which are critical for its military
industry.
8. Despite these results, the Assembly is concerned that the
effectiveness of the sanction system is weakened by gaps and loopholes,
which are exploited by the Russian authorities and targeted individuals
to circumvent the restrictions. In order to bypass the oil price
cap, for instance, the Russian authorities have assembled a “shadow
fleet” of old vessels, which operate under different flags and represent
a serious environmental hazard due to their poor maintenance and
inadequate insurance coverage. The Russian Federation’s volume of
trade with countries such as China, Iran, Kazakhstan and Kyrgyzstan
has sharply increased, and so has it with some Council of Europe
member States. Evidence shows that this increase is due to the re-exportation
of sensitive goods originating from sanction-imposing countries,
despite the existing ban.
9. The Assembly draws attention to the other critical sectors
of the Russian Federation’s economy that need to be targeted by
sanctions. For instance, Russian liquefied natural gas is still
making its way onto the European market, representing around 15%
of the total supply. In 2023 alone, the Russian Federation earned US$99
billion from the supply of gas.
10. Special attention should be paid to the Russian steel slabs
(semi-finished products for rolling into plate or coil rolled),
pig iron and iron ore products. For instance, in November and December
2023 alone, Russian slabs entered the European Union at a price
much lower than the market price (€450 per tonne instead of €600 per
tonne according to the European Steel Association (EUROFER)). This
is one of the core sectors of the Russian economy, estimated to
account for 3% of the country’s gross domestic product (GDP), or approximately
US$60 billion annually. This results in price dumping, delaying
the green transition and boosting the Russian Federation’s economy,
which funds its war of aggression against Ukraine.
11. In light of these considerations, the Assembly believes that
urgent and robust action is needed to enhance the effectiveness
of the sanction system, learning from the experience gathered so
far. The Assembly, therefore, calls on Council of Europe member
and non-member States to consider the following measures to reinforce
and expand the range of sanctions imposed:
11.1 strengthen compliance with the oil price cap, by listing
the vessels of the “shadow fleet” assembled by the Russian Federation
and its accomplices, banning them, and establishing a whitelist of
brokers authorised to provide information regarding transactions
under the price cap;
11.2 ensure that other strategic sources of Russian income
are also targeted, including liquefied natural gas and pipeline
gas, as well as agricultural, metallurgical and nuclear industries,
by banning both the direct import and the resale of related products;
11.3 ban the export of critical raw materials, manufactured
battlefield goods and dual-use items to the Russian Federation,
especially those that could contribute to the war effort, and impede
access to their transport hubs, services and financial assistance
to all carriers transporting these goods to the Russian Federation;
11.4 ban all Russian and Belarusian banks from the Society
for Worldwide Interbank Financial Telecommunication (SWIFT) international
payment messaging system, and urge banks to cease operations in
the Russian Federation;
11.5 enlarge the list of sanctioned individuals, to also include
the persons directly responsible for and participating in the persecution
and ill-treatment of Vladimir Kara-Murza; the persecution, ill-treatment and
death of Alexei Navalny; the deportation, forcible transfer and
unjustifiable delay in repatriation of Ukrainian children; and the
destruction of Ukrainian cities and towns, such as Mariupol, Bakhmut, Avdiivka
and Marinka;
11.6 ensure that Russian companies in the military and defence
sectors, especially those producing weapons, as well as their owners
and managers, are targeted by sanctions;
11.7 consider the available legal grounds to also target family
members of sanctioned individuals;
11.8 strengthen and enlarge the ban on media outlets broadcasting
Russian propaganda, ensuring that prohibition is enforced and that
appropriate penalties are in place in case of failure to comply.
12. The Danish Straits mostly lie within Danish territorial waters
and represent a point of passage for roughly one third of Russian
oil exports. According to international law, Denmark cannot impede
the transit of foreign vessels through the Danish Straits, unless
they appear to be in violation of environmental rules. At the same time,
the European Union sanctions also apply to the territorial waters
of its member States. The Assembly therefore invites the Danish
authorities, in co-operation with other States and relevant international
actors, to convene a reflection group to consider the measures that
Denmark can apply, in compliance with international law, to prevent
vessels from exploiting freedom of navigation in the Danish Straits
to circumvent the system of international sanctions.
13. Welcoming the decision taken on 8 May 2024 by the European
Council to use windfall profits from the Russian Central Bank’s
frozen assets to support Ukraine’s recovery and military defence,
the Assembly reiterates its call to explore all available legal
options to confiscate frozen Russian assets and the interests accruing
thereon, and commit them to compensate Ukrainian citizens, rebuild
destroyed cities and regions, and reconstruct Ukraine.
14. The effectiveness of the sanctions regime should also be improved
by increasing the number of participating countries, enhancing their
co-ordination and reducing legal gaps and loopholes. To this effect,
the Assembly invites Council of Europe member and non-member States
to:
14.1 join the coalition of countries
that are imposing restrictive measures on the Russian Federation, if
they have not done so yet;
14.2 expand and simplify export control measures, in particular
by establishing a co-ordinating mechanism for multilateral export
controls, by setting up more robust tracking and verification systems to
prevent sanctioned goods and materials from entering global markets
through indirect channels, and by strengthening the collection,
accessibility and exchange of relevant customs and banking data;
14.3 bolster corporate responsibility, by:
14.3.1 establishing
corporate responsibility codes impeding trade with the Russian Federation, directly
or via third countries, in strategic sectors critical to its war
effort;
14.3.2 providing clearer guidance on the sanctions regime to
the private sector, especially in relation to the “No Russia clause”
imposed on European Union exporters;
14.3.3 introducing due diligence systems to track the complete
route of their exports;
14.3.4 introducing criminal liability for corporate managers
of companies involved in sanctions violation and circumvention;
14.3.5 enhancing the effectiveness of inspections and investigations;
14.4 tackle sanctions circumvention facilitated by companies’
subsidiaries operating in third countries, by holding parent companies
accountable globally;
14.5 set up and publish a register of individuals and companies
operating under their jurisdiction which support the Russian Federation’s
effort in its war of aggression against Ukraine;
14.6 set up and publish a register of individuals and companies
operating under their jurisdiction which are involved in sanctions
violation and circumvention;
14.7 enlarge and diversify the adoption of secondary sanctions
to target countries, entities and individuals contributing to sanctions
violation and circumvention;
14.8 withhold financial assistance and all kinds of aid to
those countries, entities and individuals who support the Russian
Federation in its war of aggression against Ukraine;
14.9 consider mirroring the same range and nature of restrictive
measures to the closest allies of the Russian Federation, such as
Belarus, Iran, North Korea and their elites;
14.10 improve multilateral co-operation in order to ensure the
harmonisation of relevant national legislations, the elimination
of legal loopholes facilitating sanctions circumvention, the continuous exchange
of information and best practices, and the conduct of joint inspections
and investigations;
14.11 reinforce the financial, human and technical capacities
of the national authorities responsible for the enforcement of sanctions,
so that they have enough means to properly and efficiently conduct
their tasks;
14.12 enhance penalties which are applied for sanction circumvention;
14.13 raise public awareness through a communication strategy
that explains the importance of sanctions to European citizens and
clarifies their goal, which ultimately is to minimise the economic power
of the aggressor State Russia and therefore to reduce its capabilities
to wage its war of aggression and commit war crimes;
14.14 provide support to those independent media outlets that
are actively countering the Russian propaganda efforts.
15. In order to eliminate safe havens and ensure a more homogeneous
legal framework concerning the criminalisation of sanctions violation
and circumvention, the Assembly urges European Union member States to
expedite the incorporation in their national legislation of the
provisions contained in Directive (EU) 2024/1226 of the European
Parliament and of the Council of 24 April 2024 on the definition
of criminal offences and penalties for the violation of Union restrictive
measures and amending Directive (EU) 2018/1673.
16. In addition, applicants to European Union membership should
ensure that their domestic legislation is aligned with the provisions
contained in Directives 2024/1226 and 2018/1673, and in general
with decisions taken under the European Union’s Common Foreign and
Security Policy. The Assembly urges the European Union to consider
this alignment a necessary condition to proceed with membership
negotiation procedures.
17. In December 2022, the European Commission decided to appoint
an International Special Envoy for the Implementation of EU Sanctions,
to ensure a continuous dialogue with third countries to avoid sanctions circumvention
or violation. The Assembly invites the European Union to strengthen
these diplomatic efforts, especially with third countries which
are not yet imposing restrictive measures on the Russian Federation,
by identifying possible incentives for them to do so.
18. As regards sport sanctions, the Assembly regrets the decision
taken by the International Olympic Committee to allow Russian and
Belarusian athletes to participate in the Paris 2024 Olympic Games
as individual neutral athletes, contrary to its call to fully ban
their participation, expressed in
Resolution 2507 (2023) “War of aggression
against Ukraine – Participation of Russian and Belarusian athletes
in the Paris 2024 Olympics and Paralympics?”.
19. The Assembly welcomes and encourages the initiatives taken
by the Council of Europe on the matter of sanctions, including through
the work of the Committee of Legal Advisers on Public International
Law (CAHDI) and the monitoring activities of the Committee of Experts
on the Evaluation of Anti-Money Laundering Measures and the Financing
of Terrorism (MONEYVAL), as well as the Council of Europe–EU Technical Support
Instrument project on “Effective implementation of the sanctions
regime and enhanced cross-border cooperation in EU Member States”.
