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30. 7. 2014 20:04

The Czech Republic has joined the next stage of EU sanctions against Russia

On Tuesday 29 July the European Union adopted tougher sanctions against the Russian Federation. The new sanctions are based on the measures recommended in the conclusions of the extraordinary European Council meeting in July and are aimed particularly at trade in military goods and restrictions on the financing of the Russian economy.

“Russia has unfortunately not taken the option to stop supplying the rebels with heavy weapons after downing a Malaysian aircraft and to consistently seek a peaceful solution to the crisis in eastern Ukraine. After this tragic event, which claimed the lives of large number of innocent civilians, Russia is still unwilling to enter talks with Ukraine in an effort to reduce the tension. When discussing the new sanctions, representatives of the Czech Republic advocated maintaining the EU’s consistent attitude towards Russia and doing as much as possible to protect the local economy and jobs. It is good that the sanctions are not wholly economic and are narrowly targeted. I hope that no further sanctions will be needed and that common sense and diplomacy will win the day. A major trade war in the future is not beneficial for either the European Union or Russia, nor is a new economic and political Iron Curtain on the eastern borders of Ukraine,” said Prime Minister Bohuslav Sobotka.

The nature and scope of the sanctions has been extensively discussed within the European Union in the past few days. the aim of the debate was to react as quickly as possible to the current situation, in which Russia is doing nothing to ease the conflict in eastern Ukraine. The sanctions are aimed particularly at the military industry and financing for new investments. The measures taken to apply only to new contracts, not existing contracts.

During the talks the Czech government successfully urged that the new sanctions should not have an impact on trade in civil goods and should only apply to military supplies. As the Czech Republic focuses primarily on civil supplies in its relations with Russia, the new sanctions should not have any major impact on the Czech economy.

The sanctions adopted focus specifically on the following areas:

  • access of Russian state-owned banks to the capital markets

The restrictions apply to trading in bonds and shares, which have a maturity of greater than 90 days and are issued by major Russian financial institutions based in Russia, in which the state has at least a 50 % share; this concerns five banks.

  • arms trade

A ban on trading in weapons to/from Russia, including if the goods do not originate in EU member states. The sanctions do not apply to supplies of spare parts and services necessary for the maintenance of existing ordnance in the EU.

  • export of dual-use goods

It is prohibited to trade in dual-use goods intended for military use in Russia or a military end user in Russia, including if the goods do not originate in EU member states. The ban does not apply to civil supplies of goods, or to goods intended for joint recipients.

  • export of sensitive technologies

A possible ban on the export of technologies for deep-sea exploration and oil extraction, arctic exploration and the extraction of oil and project to extract oil from shale in Russia. Decisions on the authorisation of exports will be taken by the relevant government body.

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