France and the Netherlands are pushing for the European Union to impose sanctions against any bank worldwide that aids Russian military in paying for goods or technologies for weapons, according to Reuters.
EU government envoys will discuss this proposal on May 15th as part of the 14th package of sanctions against Russia, currently being prepared within the EU.
According to the proposal, any EU member may be prohibited from doing business with any financial institution worldwide that, according to the EU, directly or indirectly aids Russian military in acquiring prohibited goods and dual-use technologies.
Such a ban could serve as a potent incentive for financial institutions in the Middle East, Türkiye, or even in China, to abstain from deals supplying Russia with dual-use goods sanctioned by the EU, as they could risk losing access to European business and financial markets.
EU officials said that the European Commission will likely coordinate any similar sanctions on financial institutions with the United States, making this instrument even more robust.
Hungary, which maintains warm relations with Moscow despite its incursion into Ukraine, may oppose this proposal, and perhaps Germany, which seeks to not jeopardize close business ties with China. Last month, the European Commission stated that there were signs Beijing is supplying Russia with components that could be used in weapon production.
The EU expects the 14th package of sanctions, requiring unanimity from all 27 EU governments, to be ready in June.
Sanctions against Russia
The EU seeks to prevent circumvention of the 13 packages of sanctions already imposed against Russia since its invasion of Ukraine in February 2022. Existing sanctions include a ban on selling certain goods and dual-use technologies to Russia, which have both civilian and military applications.
The US President Joe Biden signed an executive order on December 22 to strengthen sanctions on financial institutions aiding Russia. These banks could be cut off from the US financial system, effectively destroying the financial institution.
