EU Proposes to Sanction Chinese Firms Aiding Russia’s War

The European Union is proposing to sanction several Chinese firms that it claims helped Russian companies develop attack drones that were deployed against Ukraine.

The European Commission, the EU’s executive arm, is also looking into imposing restrictions on additional Russian oil tankers to curb Moscow’s ability to circumvent existing restrictive measures, according to documents seen by Bloomberg.

The proposals come as Group of Seven foreign ministers meeting in Italy this week are set to pledge “appropriate measures” against China and other countries that are supporting Russia’s war effort in Ukraine, Bloomberg reported Monday. The EU measures would require the backing of all 27 member states.

Some of the firms have already been sanctioned by the US and UK.

Chinese Foreign Ministry Spokeswoman Mao Ning denied the allegations and said that China was opposed to unilateral sanctions that have no basis in international law.

“We have never provided any weapons, and we have strictly controlled dual-use item, including the export of drones,” she said at a press briefing Tuesday in Beijing. “We will take necessary measures to uphold the legitimate rights and interests of Chinese enterprises.”

A spokesperson from the commission declined to comment.

The EU also proposed adding a Chinese national, who controls a company that has breached EU trade restrictions, to the sanctions program; a Hong Kong-based firm that has provided Russian military firms with banned microelectronic components; and North Korean defense officials involved with the country’s decision to deploy troops to aid Russia, according to the documents.

Chinese President Xi Jinping has sought to portray Beijing as neutral regarding the war in Ukraine and has pushed to improve international ties, not least to help ensure exports continue to buoy China’s struggling economy. China has repeatedly criticized Western sanctions and has said it won’t supply lethal aid to either side.

As part of what would be the bloc’s 15th sanctions package since Moscow’s full-scale invasion of Ukraine, the commission is proposing to list more than 50 individuals and nearly 30 entities, freezing their assets and imposing travel bans, according to the documents.

Those targeted include mostly Russian military manufacturers as well as a small group of Chinese firms supplying them and others alleged to be collaborating with Russian entities to make attack drones, also providing them with key components such as engines.

Bloomberg reported in July that Chinese and Russian companies are developing an attack drone similar to an Iranian model deployed in Ukraine. This raised fears that Beijing may be edging closer to providing the sort of lethal aid that western officials have warned against.

The fresh set of measures, which could still be changed, also include banning more than 45 Russian oil tankers from accessing European ports and services for high-risk shipping practices, as the bloc and its allies work to cut Moscow’s oil revenues and its ability to get around a price cap on Russian crude.

Other proposed sanctions would hit Russian firms transporting oil as well as numerous military personnel and company executives. As part of ongoing efforts to tighten the enforcement of existing measures, the EU is also proposing trade restrictions on some three dozen entities involved in helping Moscow get its hands on banned technologies used in weapons found in Ukraine or needed to build them. That list includes firms in Russia, Serbia, Iran, India, Thailand, the United Arab Emirates as well as China and Hong Kong, according to the documents.

The EU is also proposing a derogation mechanism to allow EU central securities depositories to unfreeze some of the cash they hold in the face of increased litigation in Russia.

Photograph: During a media trip organized by the Russian military, Russian soldiers patrol at the Mariupol drama theatre in Mariupol, Ukraine, in April 2022. Photo credit: Alexander Nemenov/AFP/Getty Images