Wider Europe

Welcome to Wider Europe, RFE/RL's newsletter focusing on the key issues concerning the European Union, NATO, and other institutions and their relationships with the Western Balkans and Europe's Eastern neighborhoods.

I'm RFE/RL Europe Editor Rikard Jozwiak, and this week I'm drilling down on two issues related to sanctions: Will Russia be hit by another round? And will the EU ever sanction people or entities for being corrupt?

Brief #1: Can The EU Pass Another Round Of Sanctions On The Kremlin?

What You Need To Know: The European Commission will start sounding out officials from EU member states this week on another round of sanctions on Russia. Some countries -- notably the Baltic trio of Estonia, Latvia, and Lithuania, as well as Poland -- are pushing for a 14th package of sanctions against the Kremlin. The problem is that they need to get all other EU member states on board -- and that needs to happen in the next 10 weeks.

In July, Hungary, the most sanction-skeptic member of the European Union, will take over the bloc's rotating presidency. A few diplomats I have spoken to have said that they don't believe that Hungary is keen to adopt more measures against Russia during the country's six months at the helm.

But there is also another obstacle: European Parliament elections are just around the corner. That means the jockeying for top EU positions in the European Commission and European Council will officially start after that vote in early June -- and is already under way in the corridors of power in Brussels and in other European capitals.

There is an illustrative example here: Ursula von der Leyen is hoping to be selected again as European Commission president for another five years and has appointed the head of her cabinet, Bjorn Seibert, to lead her campaign team. Seibert is essentially tasked with persuading the 27 heads of state and government to endorse von der Leyen for another mandate.

The issue there is that Seibert -- often described as something of an éminence grise -- is the sanctions person in the European Commission, the body in the EU that initiates the measures for member states to eventually agree on. With Seibert busy securing political backing for his boss, will anyone else be able to push through more sanctions?

Deep Background: Then there is the question of what to sanction, apart from blacklisting more people. The obvious answer would be the Russian liquefied natural gas (LNG) and nuclear sectors. But, collectively, there is not enough appetite among EU member states to target Russian energy, as fears still persist inside the bloc that energy prices could spike again just like last year.

Banning the import of aluminum could possibly fly, especially as the EU's own aluminum industry would be in favor of such a move. But it would require that countries such as Greece, which are heavily reliant on Russian aluminum, be on board. Another potential and realistic target is to go after Russian helium exports. While the country only gets about $1 billion a year from exporting the gas, the EU has increased its imports substantially over the last couple of years, and Moscow has the ambition to become one of the world's biggest helium suppliers in the future.

Some EU officials I have spoken to believe that more can be done to limit IT services provided by EU companies in Russia. The current ban, introduced in a previous sanctions package, targets mainly the prohibition of European consultancy services to install computer hardware and software, but services such as cloud computing remain largely untouched. This could be included in a future package.

Drilling Down

• In the future, EU officials are expected to focus on plugging loopholes in the already existing sanctions. When EU leaders met in March, they unanimously agreed on conclusions stating that "Russia's access to sensitive items and technologies with battlefield relevance must be restricted to the maximum extent possible, including by targeting entities in third countries enabling this circumvention."
• The EU has drawn up the legal framework to sanction third countries -- as well as companies operating in third countries -- that the bloc believes are circumventing EU sanctions and aiding Russia. So far, the framework hasn’t been utilized, but one place to start targeting firms could be Central Asia. Trade between the EU and Central Asian states such as Kazakhstan and Kyrgyzstan has risen dramatically in recent years. Much of that trade is luxury goods and components that can be used for airplanes, helicopters, and drones.
• There are other ways that the process could be tightened. Right now, the EU's legal framework allows member states to prevent imports if they have a strong suspicion that the goods originated in Russia. But there isn't a similar provision preventing the export of goods where there is a good chance they'll end up in Russia.
• There are plenty of loopholes, for example, goods checked by customs have to be exported within a certain time frame. In practice, that means that goods can be substituted for others after the cargo has been checked.
• Another loophole is businesses bypassing the EU's ban on flights to Russia. To get around the ban, new aviation companies have popped up in other countries, using quick stopovers in places like Armenia, Georgia, or Turkey. Flight plans are closed at the layover, and then new ones are opened for the final destination, Russia. There are even so-called "fake ambulance flights" where an elderly "medical" passenger is accompanied by several "friends and family members."
• Perhaps one of the biggest sanctions prizes would be targeting the assets of sanctioned Russian companies and oligarchs. Most of those assets are in trustee and nominee services, where the ownership is concealed and notoriously hard to trace. There are almost 800 companies and trusts registered in tax havens or places with a high degree of financial secrecy that are owned or controlled by Russians who have been sanctioned by the EU, according to the International Consortium of Investigative Journalists. But there might not be enough political will in the EU and among the G7 partners to go after these assets.

Brief #2: Will Corruption Ever Be Sanctioned In The EU?

What You Need To Know: Whatever happened to the European Commission proposal that the EU should impose sanctions on people and entities guilty of serious corruption? The short answer: not much. Since the proposal was announced amid much fanfare in May 2023, there were hopes the EU would finally have something similar to the so-called "Magnitsky sanctions," which are already in place in Canada, the United Kingdom, and the United States. Those measures allow these countries to target corrupt businesspeople and compromised officials.

European Commission President Ursula von der Leyen, who had raised the idea in a big speech back in the fall of 2022, has not spoken much about the issue in recent months. But the main reason the proposal has stalled -- as happens so often when it comes to the bloc's sanctions policy -- is due to the member states themselves and the need to find consensus.

Deep Background: When the EU adopted a new sanctions regime in 2020 targeting human rights abuses globally, corruption was omitted as a sanctionable offense. Hungary said that it would not support the proposal if it included references to corruption, while other member states, particularly in Luxembourg and in southern Europe, also expressed reservations.

The story is still pretty much the same. The issue has languished in various lower-level diplomatic working groups ever since the European Commission, the executive branch of the EU, presented the draft law nearly a year ago to the European Council, which defines the political direction and priorities of the bloc.

Sweden, which held the council's rotating presidency when the European Commission announced its proposal, only had weeks left in its stint at the helm and decided not to touch the issue. Spain, which wasn't overjoyed about the proposal, also decided not to put it on the agenda during its presidency in the second half of the year. For Belgium, which currently holds the European Council Presidency, it will probably be a similar story. Belgian officials have indicated that there is no chance of moving forward with the issue when no consensus among member states exists. With the EU gearing up for European Parliament elections, the proposal will only gather more dust.

There are many legitimate concerns about making corruption a sanctionable offense. Some European politicians are worried that the restrictive measures could be used domestically to punish political opponents. There are also questions about how far Brussels could go when it comes to interfering in what is largely a domestic issue in third countries.

Some diplomats I have spoken to note that most of the sanctions the EU imposes don't deal with what can broadly be described as "economic crimes" but instead concern more "classical" abuses of power. For instance, actively supporting the undermining of a country's territorial integrity has led to asset freezes and visa bans, primarily levied against Russian nationals in recent years following the full-scale invasion of Ukraine in 2022. Or cases involving killings, torture, and mistreatment, which are included in the EU's global human rights sanctions regime.

Drilling Down

• There is another obstacle: the need to obtain enough credible evidence to impose sanctions in the first place. Brussels can only target people and companies via publicly available information, and, of course, corruption is an incredibly opaque business.
• The EU also didn't have much luck with perhaps its biggest corruption-related sanctions regime so far: the 2014 decision to impose punitive measures on the Ukrainian ex-president, Viktor Yanukovych, and 17 of his closest associates over the "misappropriation of Ukrainian state funds." Ten years down the line, only three people remain on the blacklist, with the others managing to get delisted through the European Court of Justice (ECJ). Brussels officials have already conceded -- as have ECJ judges -- that much of the evidence they had at the time was a little flimsy and the sanctions were adopted in haste.
• The EU's legal troubles with the ECJ were further highlighted recently when some Russian citizens who had been sanctioned over the war in Ukraine managed to win in the Luxembourg-based court.
• This is where diplomats in favor of corruption-focused sanctions have one of their strongest arguments. As legal decisions have shown, it can sometimes be hard to prove connections to the Russian war effort. If corruption was a sanctionable offense along with other infractions, there would likely be more evidence and a greater likelihood of individuals staying on the blacklist.
• Those in favor of corruption sanctions say that creating a working party on the issue within the Council of the European Union, where ministers from member states meet to discuss, amend, and adopt laws, would help. There is a precedent: Cyberattacks on the EU are considered sanctionable offenses, and a working group has been set up on precisely this issue.
• The actual European Commission's draft proposal, seen by RFE/RL, is quite limited in scope -- which could actually help its chances. Under the proposal, three categories would be targeted: active bribery, meaning "the promise, offering, or giving, to a public official, directly or indirectly, of an undue advantage, for the official himself or herself or another person or entity"; passive bribery, which is the acceptance by a public official of such an offer; and embezzlement and misappropriation of property by a public official.

Looking Ahead

The EU's foreign and defense ministers gather in Luxembourg on April 22. They will mainly discuss how to give Ukraine more air defense capabilities, but they could also take stock of the situation in Georgia, where the government is trying to pass a controversial "foreign agents" bill that the bloc has already signaled its displeasure with.

Also this week, European Union ambassadors could finally clinch a deal on sending the profits from frozen Russian state assets to Ukraine. The main issue to overcome is how to deal with the taxation on these extra profits and where that money should end up.

That's all for this week. Feel free to reach out to me on any of these issues on Twitter @RikardJozwiak, or on e-mail at jozwiakr@rferl.org.

Until next time,

Rikard Jozwiak

If you enjoyed this briefing and don't want to miss the next edition subscribe here.

Welcome to Wider Europe, RFE/RL's newsletter focusing on the key issues concerning the European Union, NATO, and other institutions and their relationships with the Western Balkans and Europe's Eastern neighborhoods.

I'm RFE/RL Europe Editor Rikard Jozwiak, and this week I'm drilling down on two big issues: Kosovo's chances of joining the Council of Europe and the weakening of the EU's sanctions on Russia.

Brief #1: Is Pristina On The Cusp Of Council Of Europe Membership?

What You Need To Know: Kosovo is taking one step closer to joining the Council of Europe, a body promoting human rights, democracy, and the rule of law in its member states. On April 16, the Parliamentary Assembly of the Council of Europe (PACE) will consider and vote on a report recommending the country's membership.

If a two-thirds majority of the assembly's delegates from 46 member countries vote in favor, that could set the stage for a final decision at a meeting of Council of Europe foreign ministers on May 16.

Membership in the council, which has been a goal for Pristina ever since its declaration of independence from Serbia in 2008, would mean, among other things, that Kosovars could have their cases tried at the Strasbourg-based European Court of Human Rights (ECHR). Not to mention that Kosovo would join the European Broadcasting Union (EBU), allowing it to take part in the much-celebrated, much-derided annual Eurovision Song Contest.

Belgrade has never recognized Kosovo's 2008 declaration of independence and has worked actively to prevent the country from joining any international organizations.

Deep Background: It is likely that the two-thirds majority will be reached. A report on the issue was approved on March 27 by PACE's Committee on Political Affairs and Democracy, which stated that "Kosovo's aspirations to join the Council of Europe should be met with a positive response." The plenary tends to follow committee decisions.

Currently, 12 out of the 46 Council of Europe member states do not consider Kosovo to be an independent state -- just short of a blocking minority. That includes Serbia and Bosnia-Herzegovina; the five nonrecognizers in the EU, Cyprus, Greece, Romania, Slovakia, and Spain; as well as Armenia, Azerbaijan, Georgia, and Moldova. Ukraine also doesn't recognize Kosovo's independence, largely because of the fear that Russia would use this as a pretext to push for wider international recognition of the Ukrainian territories it currently occupies.

Country representatives might not, however, vote according to their capitals' stated political views on Kosovo. For example, the Ukrainian representatives will have "a free vote," and it could be that other countries will follow suit.

PACE deputies from Hungary's ruling Fidesz party are likely to vote against the motion, despite Hungary's recognition of Kosovo's statehood, a reflection of Budapest's growing ties with Serbia. There will also probably be quite a few representatives opting to abstain, which would play well in Pristina's favor. It is significant that the author of the report, Dora Bakoyannis, is a former Greek foreign minister and sister of the current Greek prime minister, Kyriakos Mitsotakis. It is not inconceivable that, despite Athens' formal stance of nonrecognition, the Greek delegation will back Pristina's membership.

Drilling Down

• There are a number of reasons why there is a reasonable chance of Kosovo getting in now. Firstly, Russia was expelled from the Council of Europe shortly after its full-scale invasion of Ukraine in February 2022. With Moscow out, Serbia has lost one of its biggest allies in the fight. Then there is the fact that Kosovo has already successfully joined some Council of Europe-related bodies, such as the Venice Commission, an advisory board, and the Council of Europe Development Bank.
• Linked to that, the dialogue aimed at normalizing relations between Belgrade and Pristina, which is facilitated by the European Union, has been taking place since 2011 with varying degrees of diplomatic engagement. This dialogue is at an all-time low right now after a number of incidents in the last year, including Pristina's decision to enforce the use of Kosovar car license plates, local elections without the participation of ethnic Serbs, and the Belgrade-linked attack at the Banjska monastery that resulted in the death of a Kosovar police officer.
• Before all that took place, there appeared to be a major breakthrough, with both Serbia and Kosovo verbally consenting to the Ohrid Agreement, which aims to normalize diplomatic relations between the two. One of the key points of that agreement is that "Serbia will not object to Kosovo's membership in any international organization." There are two other important provisions: that Kosovo will "commit to ensure an appropriate level of self-management for the ethnic Serbian community in Kosovo" and will "ensure the security of the properties of the Serbian Orthodox Church within its borders."
• There are, however, two caveats related to Ohrid. Firstly, it wasn't actually signed by either party, even though Kosovar Prime Minister Albin Kurti did express his willingness to do so. So, its legality is questionable at best. Secondly, and more importantly, there is no agreed sequence on what the first next step should be.
• Essentially, Kosovo has jumped first. This happened in March when its government decided to hand over ownership of 24 hectares of land to the Serbian Orthodox Church monastery in Decani, western Kosovo. Kosovo's constitutional court had ruled in favor of the monastery being given the land in 2016, but successive Kosovo governments refused to heed the court's ruling. It was this U-turn that prompted Bakoyannis to recommend Council of Europe membership.
• There are other issues that Kosovo needs to address: the establishment of an association of Serbian-majority municipalities; and the issue of land expropriation in those municipalities. According to Bakoyannis's report, both of these issues should be a "postaccession commitment" for Pristina. The question is if the wider international community agrees.
• While the PACE vote next week is advisory and not binding, the real politicking will start in the run-up to the foreign ministers' meeting next month. As in the parliamentary assembly, a decision can be taken by a two-thirds majority, but that would be unprecedented. So far, ministers have always reached consensus on accepting new members.
• Serbia has already hinted that it will do its utmost to prevent Kosovo's membership, and, ultimately, Belgrade could win that fight. One scenario could be that no final decision is taken at all in May. The so-called Quint, consisting of France, Germany, Italy, the United Kingdom, and the United States, wants to see a proper draft law presented by Kosovo on the association of Serbian-majority municipalities before the countries can agree on the item even being on the agenda at the ministerial meeting.
• Those five countries see this as the last chance to pressure Kurti to agree on this contentious issue. With EU membership still only a pipe dream, Council of Europe membership is the last Western carrot on offer for Pristina. But even Council of Europe membership could be a step too far for Kosovo -- and not only for political reasons.
• While the establishment of the municipalities' association was agreed by Belgrade and Pristina back in 2013, Kosovo's Constitutional Court has questioned its legality. The judicial decision pertains to the scope of authority and ethnic structure within the organization, with indications that employment may be exclusively reserved for ethnic Serbs -- a practice Kosovo's court deems to be in violation of the constitution.
• So, while Kosovo might get boosted by a vote in the parliamentary assembly this week, a final decision by the 46 foreign ministers could be postponed by at least a year, if not more. Unless, that is, there is more progress in the weeks to come.

Brief #2: Are EU Sanctions On Russia Falling Apart?

What You Need To Know: It is fair to say that the European Union's sanctions regime against Russia has had a bit of a wobble in recent weeks, particularly with regard to the list of entities and people that the bloc has imposed asset freezes and visa bans on since the full-scale invasion of Ukraine in 2022.

As the European Union considers expanding the sanctions list, which currently includes 2,177 individuals and entities, three people were removed from the list in March during its routine biannual review, which requires the unanimous agreement of all 27 EU member states.

While that is a relatively small number, the delisted individuals were notable -- Arkady Volozh, the co-founder of the Russian Internet giant Yandex; businessman Sergei Mndoiants; and Jozef Hambalek, a Slovak national and head of the Russian nationalist Night Wolves motorcycle club in Europe.

Hambalek was the first EU national to be blacklisted in 2022. (Some of the other blacklisted individuals had EU passports in addition to their Russian citizenship.) When the entire list is up for renewal again in September, it's likely that more names will be removed, largely due to three recent rulings in the EU's Luxembourg-based General Court, a constituent part of the Court of Justice of the European Union.

Deep Background: On March 20, the General Court ruled that Nikita Mazepin, a former Formula One driver and son of the Russian oligarch Dmitry Mazepin, should be removed from the list. The EU has maintained that Mazepin senior is a member of Russian President Vladimir Putin's inner circle and has supported actions undermining the territorial integrity of Ukraine. Last fall, an EU court backed Brussels' reasoning on this in a landmark verdict.

When it comes to Mazepin junior, however, the General Court noted that the EU had failed to prove any link between father and son -- beyond the obvious family ties, that is -- and had insufficient evidence to apply restrictive measures on him.

And then, on April 10, the Luxembourg court delivered another legal blow for Brussels when it ruled that Petr Aven and Mikhail Fridman, both major shareholders in one of Russia's biggest financial institutions, Alfa Bank, should also be delisted.

The judges noted that there may very well be "a degree of proximity" between Aven and Fridman on one side and Putin or his entourage on the other, but that the EU had failed to demonstrate that the pair either supported actions and policies undermining Ukraine's independence or provided material or financial support to destabilize the country.

Drilling Down

• It's important to remember that Mazepin junior, Aven, and Fridman do still remain under EU sanctions. How come? First of all, the EU can appeal the verdict within a period of two months and 10 days. Second, Brussels is also using something of a legal quirk in the sanctions regime to keep them blacklisted.
• The EU has argued that the three men's judgments only cover the period from their initial listings in February 2022 to March 2023. Since then, the EU has renewed the sanctions list, with the three men's names included, both in September 2023 and, most recently, last month. According to EU officials, these renewals are more than just a technicality; in fact, they produce new lists every six months as some names are added and some are removed.
• In this way, the EU is forcing the still-sanctioned individuals to file a new case at the European Court of Justice (ECJ) to challenge the most recent sanctions update. Legal proceedings are time-consuming, and when the time for renewal comes around every March and September, the wheels of justice are still turning, enabling the EU to stay ahead.
• This was how the EU managed to keep former Ukrainian President Viktor Yanukovych on a sanctions list until 2022, even though he won his first case in an EU court back in 2019 and then, over the next two years, won another two legal battles.
• The extra time that Brussels is buying itself could allow it to present additional evidence for the court to consider. This is what happened to Violetta Prigozhina, the mother of the now-deceased Russian oligarch and mercenary leader Yevgeny Prigozhin. In March 2023, she became the first person challenging the EU's Russia sanctions to win at the ECJ. But according to sources familiar with the file who don't have the authority to speak on the record, the EU then managed to present additional details. Prigozhina has remained sanctioned ever since.
• To date, 115 cases have been filed at the EU court requesting the delisting of people or companies. Many are filed by rich, sanctioned Russian businessmen who are able to spend vast sums on European lawyers to fight their cases. So far, the EU has won 33 cases and only lost eight -- a pretty decent scorecard for Brussels. The recent trio of losses could set a precedent, though, and mean more legal blows for the EU in the months ahead.
• Ultimately, it remains a political decision whether those three Russians and others remain listed come September. For pretty much every renewal so far, Hungary has attempted to leverage its veto by asking for some names to be dropped. Previously, the EU managed to secure another six-month rollover by offering to remove people that the EU's own legal service marked as "weak" due to insufficient evidence.
• For example, last fall, two lesser-known Russian businessmen, Aleksandr Shulgin and Farkhad Akhmedov, were removed from the list. But considering that Budapest had previously asked for Aven, Fridman, and Mazepin junior to be removed, they are likely to make a similar request soon enough, especially since they are now backed by the EU's own court on the matter.

Looking Ahead

EU leaders are gathering in Brussels for another summit on April 17-18. The meeting will mainly focus on economic issues and relations with Turkey, but attendees will also talk about Ukraine and how the EU can boost its defense industry in order to send more arms to Kyiv.

A few days before the EU leaders meet, on April 16-17, the National Conservatism Conference (often referred to as "NatCon") will take place in the EU capital. The annual event, bringing together right-wing politicians and think tankers, will be headlined by Hungarian Prime Minister Viktor Orban and the pro-Brexit British politician Nigel Farage. Expect a lot of Brussels-bashing and talk of how Euroskeptic parties must win the upcoming European Parliament elections.

That's all for this week. Feel free to reach out to me on any of these issues on Twitter @RikardJozwiak, or on e-mail at jozwiakr@rferl.org.

Until next time,

Rikard Jozwiak

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