EU targets Russia’s state-owned shipping giant Sovcomflot for sanctions

According to an internal EU document obtained by Bloomberg, the European Union wants to impose sanctions on Russia's largest state-owned shipping company, Sovcomflot, which would make it harder for the Kremlin to fund its aggression against Ukraine. Sovcomflot is a key maritime carrier of Russian crude oil.

As the agency emphasized, the state-owned company Sovcomflot also deals with transporting liquefied gas.

After Western countries imposed restrictions on Russia's oil exports, Moscow adapted to the restrictions by using the so-called shadow fleet—old tankers, in many cases already slated for scrapping, operated by unknown companies often established after the Russian invasion of Ukraine.

Thanks to these measures, Russia could sell oil to Asian customers. Other tactics used include ships turning off automatic identification systems (AIS), transferring oil at sea, and even changing tankers' names.

The EU project follows earlier steps by Washington. This year, the US imposed sanctions on Sovcomflot and several dozen tankers associated with this company. Bloomberg reported that the EU project proposes sanctioning 13 units used for transporting goods for the military sector and oil.

The independent Russian portal Moscow Times recalled that as of May 2022, Sovcomflot had a fleet of 134 owned and chartered vessels.

Since the beginning of the aggression against Ukraine, the European Union has imposed 13 packages of sanctions on Russia. Among them are, among others, economic restrictions aimed at curbing further aggression.

The list of products subject to sanctions includes crude oil and petroleum products (since February 2023, when the EU imposed a price cap), coal, steel, iron products, gold and diamonds, cement, asphalt, wood, paper, and synthetic rubber.

In early May, Peter Stano, a spokesperson for the European Commission, discussed the sanctions imposed on Russia. He emphasised that whatever economic growth or investments there are, we are talking about the war industry or the defence industry. He adds that the EU does not aim to paralyse the entire Russian economy but to make it harder to continue the war in Ukraine.

Although sanctions are medium- and long-term measures, (which means that – PAP note) they show their full effectiveness in the medium and long term, we can say that they are working because Putin has not achieved any of the goals he set out when starting the aggression against Ukraine said Peter Stano.