EU Readies New Sanctions Targeting Foreign Companies Helping Russia’s War Effort

With Russia ramping up missile and other weapons production with Western-made chips, pressure is growing on Brussels and Washington to take action.

The European Union is preparing to sanction military and tech firms from China, Kazakhstan, Serbia, and other countries helping Russia’s war effort, according to a document seen by RFE/RL, as the bloc steps up efforts to curtail evasion.

Russia has managed to overcome sweeping EU and U.S. technology sanctions aimed at stifling its military-industrial complex by rerouting crucial goods like microprocessors through friendly third nations, such as China.

The West has been cautious to date about targeting companies in third countries amid concerns over alienating leaders, choosing diplomacy instead. But with Russia ramping up missile and other weapons production with Western-made chips, pressure is growing on Brussels and Washington to take action.

Now, ahead of the second anniversary of Russia’s invasion of Ukraine on February 24, the EU is expected to announce a 13th package of Russia-related sanctions that targets entities in six foreign countries, according to the document seen by RFE/RL.

The targets include four firms from China and one each from Kazakhstan, Serbia, India, Singapore, Sri Lanka, Thailand, and NATO-member Turkey. Overall, there are 21 entities on the list, the rest of which are based in Russia.

The entities included on the list are not final and additional companies and persons could be added or removed before a final version is passed.

Brussels has so far sanctioned three Chinese firms in past packages and has been in discussions with Beijing over China’s growing role in supplying Russian companies with nonlethal but militarily useful equipment.

Russian imports of dual-use goods through firms based in Central Asia and China have skyrocketed since the start of the war, including electronics and components produced by Western companies, such as microchips and drones.

During a visit to China in December, European Commission President Ursula von der Leyen and European Council chief Charles Michel warned Chinese leader Xi Jinping to address a list of 13 companies identified by Brussels alleged to be involved in supplying Russian firms.

The four Chinese firms on the current draft sanctions package include: Guangzhou Ausay Technology Co Limited, Shenzhen Biguang Trading Co. Limited, Yilufa Electronics Limited, and the Hong Kong-based RG Solutions Limited.

If included in the final version, the Serbia-based firm Conex Doo Beograd-Stari Grad would be the first company from the Balkan country to be included in an EU sanctions package tied to the war in Ukraine.

The Almaty-based Elem Group would also be the first company from Kazakhstan to be in a package should it not be removed following discussions next week as EU ambassadors meet to finalize the list. Two Kazakh firms were included in a draft version of the 12th sanctions package seen by RFE/RL in November, but were not included into the final version.

Elem Group was added to the U.S. Department of Commerce’s Entity List in December and an RFE/RL investigation in June found that the company had shipped hundreds of dual-use parts to the St. Petersburg-based electronics dealer Streloi E-Kommerts.

Streloi E-Kommerts was hit with sanctions from the U.S. Treasury Department in December, which said the company was part of Russia’s military procurement network.

Elem Group has denied any wrongdoing and Kazakhstan’s Ministry of National Economy claimed in December that the company has not been trading with foreign entities since May.

The company was incorporated in Kazakhstan less than three weeks after Russia’s invasion and one of its founders, Russian businessman Kirill Tulyakov, was also a founder of Streloi E-Kommerts.

The new sanctions list, which includes companies and individuals, will continue to be debated in Brussels as the bloc looks to revitalize waning levels of Western support and assistance to Ukraine. (RFE/RL)