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EU Seeks to Sanction Chinese Companies Supporting Russia’s War in Ukraine

What is happening? 

The European Union proposed new trade restrictions on entities that support Russia’s war in Ukraine. Suppose the member states approve the new sanctions. In that case, the list will include companies from the People’s Republic of China (PRC) for the first time, specifically those companies that are supposedly helping Russia circumvent further sanctions imposed by the European Union. These new sanctions should be announced as the second “anniversary” of the Russian invasion of Ukraine is coming. European Union wants to show that Europe is not afraid to sanction firms, even from the PRC, when circumventing sanctions on Russia. 


What is the broader picture? 

The PRC is the key ally of the Russian Federation. Also, thanks to the trade of goods between these two countries, Russia can keep financing its military operation in Ukraine.

The Bloomberg news agency was the first to report that the European Union plans to expand the trade restrictions list and include new companies. These sanctions are expected to be announced and approved before or on the 24th of February (2 years since Russia invaded Ukraine). The important thing is that companies from the PRC are supposed to be part of this new list. Until now, Chinese companies have never been sanctioned despite their trade and help to Russia.

However, this is not the first time European Union authorities have attempted a similar move. Last year, companies from mainland China were already added to the sanctions list by the European Commission. Still, they were removed from it due to pressure from Member States because Beijing had offered reassurances that it was not supporting the Russian invasion of Ukraine.

So, how is today’s situation different? At the December summit in Beijing, EU Council President Charles Michel told Xi Jinping that Europe had drawn up a list of companies suspected of supplying dual-use goods, which may have military and civilian uses, to Russia.  So now we have the body’s chairman representing the Member States, who has already informed the Chinese President of this step. This suggests that sanctions on companies from the People’s Republic of China now have a much better chance of being approved by the Member States. In addition to this, last year, it was revealed that the PCR has been supplying Russia with materials and goods to use in its invasion of Ukraine. So, the Chinese promises were not kept. 

Beijing immediately responded by claiming that these proposed sanctions were illegal and that it would defend the rights of Chinese enterprises. 


Why it matters? 

With this step, the European Union is making it clear to countries like the PRC that support for Russian aggression will not be tolerated and that it is not possible to circumvent EU rules. If these sanctions are imposed, trade between EU companies and selected firms will be legally impossible. This conflict between the EU and China is a precursor to a possible future escalation, as there is an ongoing debate within the EU about imposing tariffs on Chinese electric cars. Those actions also show that the EU is fearless of the PRC and is prepared to stand by its values.