Greece and Malta have emerged as the main obstacle to a European Union proposal to replace a Russian oil price cap with a ban on the services needed to ship the fuel, Bloomberg reports citing sources familiar with the matter.
The two southern European countries raised concerns about the move at an EU ambassadors' meeting on 9 February where the bloc's latest sanctions package was presented, according to people who spoke on condition of anonymity to discuss private deliberations.
They expressed fears that the switch may affect Europe's shipping industry and energy prices, the sources said. Both nations also asked for clarifications on proposals to sanction foreign ports for handling Russian oil and to tighten ship seller oversight to cut down on vessels ending up in Moscow's fleet.
A Greek government spokesperson declined to comment. Nestor Laiviera, a Maltese government spokesperson in Brussels, said the country was "engaging in the technical discussions to ensure that the eventual outcome will be implementable."
Last week, the European Commission proposed replacing an existing price cap on Russian oil sales with a ban on the services needed to move the oil. The proposal would hit insurance and transport providers and reflects the price cap's struggles to severely curtail Moscow's oil revenue. It's the centerpiece of the EU's 20th sanctions package targeting Moscow for its full-scale invasion of Ukraine, which is entering its fifth year.
The measure would be conditional on the backing of the Group of Seven nations, which collectively implemented the price cap at the end of 2022. The US position on the change is unclear, the sources said.
Separately, the EU is considering lifting sanctions on two Chinese banks after having received commitments from Beijing over its support for Russia's war against Ukraine, according to the people familiar with the matter. The EU sanctioned Heihe Rural Commercial Bank and Heilongjiang Suifenhe Rural Commercial Bank last August, which prompted Beijing to target two small banks in the EU.
China remains Russia's main war-time enabler, some of the people said, providing Moscow with the bulk of the critical supplies it needs to make weapons.
The EU's latest package does include proposals to sanction several companies in China and elsewhere that are allegedly supplying Russia's war machine with key components. It also targets cryptocurrency operators and a small number of banks in Central Asia and Laos that it claims are helping Moscow evade the bloc's sanctions.
Additionally, the EU has proposed applying its anti-circumvention tool for the first time, which would see machine tools and certain radio equipment banned from being exported to Kyrgyzstan. But Germany is concerned that could impact bilateral relations with the country, the sources said. One alternative is to introduce quotas based on pre-war trade data instead of a full ban.
A German government spokesperson declined to comment, referring to remarks made on Monday. "We coordinate these matters confidentially within the European framework as part of the EU sanctions," Foreign Ministry spokesman Josef Hinterseher told reporters.
The new sanctions proposal also includes export restrictions worth more than €360 million ($429 million) on goods such as rubber and chemicals, as well as import bans valued at more than half a billion euros, including on several metals, and a quota on ammonia imports.
EU sanctions require the backing of all member states to be approved and could change before they're adopted. The bloc is aiming to finalize the package by the end of February
