The European Commission on August 29 published an updated text of clarifications on the application of sanctions for fertilizers produced 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, that use European operators and infrastructure, along with the EU’s territory.
This decision clearly contradicts the bloc’s own earlier statements regarding the trade of agricultural products and fertilizers between Russia and third countries, particularly in cases 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. Those sanctions banned the purchase, import or transfer of these products to the EU, regardless of whether they were in excess of the quotas that Europe set for itself. The quotas amount to 837.5 thousand tons of potassium chloride and 1,577.8 thousand 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 that used the EU’s infrastructure. On August 10, however, Brussels further tightened the sanctions by extending the ban to include European operators’ activities related to the transit of Russian fertilizers that were destined for third countries through the bloc’s administrative borders. Moreover, under the new sanctions regime, the supply of fertilizers to third countries, even without the use of the EU’s territory and infrastructure, will be considered a violation of the sanctions. The provision of transportation, transhipment and trading services by European companies, along with any related services, such as insurance, financial and brokerage operations and technical assistance, is now prohibited.
The European Commission’s August 29th revision contains a significant clarification that can be regarded as a violation of the immutable principles of international trade. According to Europe’s chief executive body, 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 payments are part of the fulfilment of a contract, the Commission is, in reality, forcing European operators to violate contractual obligations to Russian suppliers unilaterally.
The Commission says the purpose of the increasing amount of sanctions is to significantly weaken Russia’s economic base by depriving it of its most important markets for its products and greatly limiting its ability to wage war.
When the sanctions were first imposed in the spring of 2022 after Russia’s invasion of Ukraine, the European Union said it would target the Russian government, companies producing military products or services, officials making decisions in the military sphere, and public figures loyal to the Kremlin, but not the general population of Russia, which Brussels claimed had no direct link to the conduct of the Russian Federation’s invasion of Ukraine.
Despite these statements, the subsequent decisions by the European institutions have made ordinary Russian citizens hostages to the sanctions. Countries in the EU have significantly restricted or frozen the issuance of visas to Russians, which has essentially cut off all tourists from the Russian Federation from entering Europe. The banking payment systems Visa and MasterCard stopped servicing cards issued in Russia, the consequences of which were felt by most Russian citizens. Fearing sanctions, many Western companies producing mass-market products – household appliances, clothing and food – curtailed their activities in Russia, which also affected the interests of large segments of the population.
The sanctions have also hit Europeans in the form of higher energy, food prices, and unprecedented inflation. Social tension is also growing as protest sentiments in many European cities are gathering residents for increasingly volatile rallies, and people are openly expressing their dissatisfaction with the reverse effect of the sanctions.
The European Union has gone even further by extending the sanctions to the developing world. The prohibition on Russian fertilizer transit operations to third countries has had devastating consequences on billions of people in Asia, Africa, and Latin America in the form of severe fertilizer shortages, declining agriculture, and the spread of hunger.
The EU’s new clarifications directly contradict both the numerous public statements previously made by European politicians and the general principles enshrined in the preamble to the seventh package of sanctions, which proclaims that food and energy security worldwide is the EU’s priority. In particular, it states that none of the measures provided in the sanctions regulations is intended 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 on Facilitating the Promotion of Russian Food and Fertilizers to World Markets – the so-called “grain deal” that was signed on July 22 in Istanbul. The memorandum was supposed to solve the problem of unimpeded supplies of Russian food and fertilizers to the world market, as well as to remove obstacles in the area of finance, insurance and other transit service operations.
This did not happen.
In practice, Brussels’ sectoral sanctions on fertilizers have only cemented the impossibility of supplying such products to third countries by involving European economic operators, infrastructure and the EU’s administrative territory. An additional layer of cynicism regarding the situation is compounded by the fact that the EU has set quotas on fertilizers and has subsequently removed them from the sanctions.
Meanwhile, Russia is ready to donate to African countries hundreds of thousands of tons of fertilizers that are stuck in European ports. If they are unblocked. The situation in the port of Riga, the capital of Latvia, is paradoxical. A vessel loaded with 55 thousand tons of potassium chloride produced by the Russian company Uralchem has been anchored there since early March (before the sanctions were imposed). Latvian authorities have been unable to make a decision regarding this cargo for more than six months and have not allowed the ship to leave the port or to be moored so the fertilizers can be unloaded.
The Initiative on the Safe Transportation of Grain 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 Ukraine’s Black Sea ports that are still under Kyiv’s control, with the logistics for the operations under the jurisdiction of the UN. But out of 2 million tons of grain that have been exported, only 3% was sent to the poorest countries, the rest went to the European Union. What complicates the matter is the fact that restrictions on the export of Russian grain and fertilizers were never actually lifted. As a result, Moscow may refuse to participate in the grain deal.
The European Union may extend its sanctions regime on world trade in the future. Such measures cannot, under any circumstances, be ruled out. This means that the ongoing sanctions war amidst Russia’s brutal attempt to revive its empire by forcing Ukraine back into its orbit could quickly turn into a global humanitarian catastrophe.
By: Nicholas WallerTitle: The EU’s revised sanctions policy hinders vital supplies of Russian fertilizers to the Third WorldSourced From: www.neweurope.eu/article/the-eus-revised-sanctions-policy-hinders-vital-supplies-of-russian-fertilizers-to-the-third-world/Published Date: Mon, 19 Sep 2022 09:07:53 +0000