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Russia adds new countries to its sanctions list

August 13, 2015, 13:37 UTC+3
The list now includes Albania, Montenegro, Iceland and Liechtenstein, as well as Ukraine, under special conditions
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Russian Prime Minister Dmitry Medvedev

Russian Prime Minister Dmitry Medvedev

© Yekaterina Shtukina/Russian Government Press Office/TASS

MOSCOW, August 13 /TASS/. Russia has added new countries to its list of counter sanctions.

Russian Prime Minister Dmitry Medvedev told a government meeting on Thursday that he had signed an instruction to expand a list of countries falling under Russian sanctions.

"Russia banned imports of some agricultural products from the European Union, Australia, Canada, Norway and the United States in August last year. Now, Albania, Montenegro, Iceland and the County of Liechtenstein have joined the list. Ukraine has been included in the list on special terms," the Russian prime minister said. He explained that those five new countries had previously supported the EU decision to extend sanctions against Russia.

Medvedev explained that the countries, which he mentioned, had knowingly made a decision to side with the European Union in question of extending the anti-Russian sanctions. "They said their decision to join the EU sanctions against Russia was motivated by a number of agreements with the European Union," Medvedev went on to say.

"This stance is only partly fair. I would like to note that a number of countries, which have a similar agreement with the European Union, have refused to impose sanctions against Russia. So, the decision to join the anti-Russian sanctions was a conscious choice, which means that the countries who did that are ready for the retaliatory measures, which we have imposed on them," Medvedev concluded.

Ban on import from Ukraine will come into force in case Kiev implements economic part of EU Association Agreement

Accodring to the prime minister, the ban on agricultural import from Ukraine will come into force only in case Kiev implements the economic part of the Association Agreement with the European Union.

"As far as Ukraine is concerned, the ban on agricultural supplies will only become effective in case the government of this country applies the economic part of the Agreement on Association with the European Union concluded by Kiev last June," the prime minister said. Russia gave time to Ukraine until January 1, 2016 to settle all issues of economic regulations, he added. "When this period expires and if we are not able to come to terms with mediation of the European Union, and I do not see any signs of that, earlier approved documents setting forth normal conditions of trade and embargo on foods will come into force," Medvedev said.

Moscow is concerned that implementation of the economic part of Ukraine-EU Association Agreement will disrupt existing trade balance between these countries and Russia. It will lead to losses of more than $1.5 billion for the Russian economy and will require Moscow to introduce protective measures.

The participants in the tripartite talks in Brussels on September 12, 2014 reached an agreement to postpone the entry into force of the EU Association Agreement with Ukraine until early 2016. Russia opposed the initial version of the agreement, as liberalization of trade between Ukraine and the European Union could adversely affect Russia’s foreign trade due to the fact that Ukraine, planning to enter the EU free trade area (FTA), is also member of the CIS free trade zone.

Moscow says if Kiev violates the September agreements Russia will apply to Ukraine the most favoured regime instead a more liberal regime of movement of goods within the CIS free trade area, or use other protective measures.

In July, Russia proposed to set quotas for "risk group" goods from Ukraine if Kiev implements the agreement on association with EU.

"In my opinion, we have proposed the most harmless solution. As we speak about the risk that Ukrainian goods can be driven out by the EU goods due to dumping prices, we proposed to set quotas on goods from this "risk group" taking into account their maximum export to Russia in recent years," First Deputy Economic Development Minister Alexey Likhachev said in an interview with TASS.

He added that only those volumes of goods which exceed quotas will be subject to duties and this measure does not contradict the norms of the World Trade Organization (WTO).

Imports from Albania, Montenegro, Iceland, Liechtenstein, and Ukraine to Russia
Russia has added Albania, Montenegro, Iceland and Liechtenstein to its sanctions list

On August 6, 2014, Russia’s President Vladimir Putin signed a decree "On the Application of Certain Special Economic Measures to Ensure the Security of Russia", introducing countermeasures to Western sanctions. The countermeasures concerned the United States, the European Union, Canada, Norway and Australia. The next day, the Russian government introduced a regulation to ban imports of meat of beef cattle; pork; poultry; salted, dried and smoked meat; fish, crustaceans, shell-fish and other aquatic invertebrates; milk and dairy products; vegetables, edible root plants and tuber crops; fruits and nuts; sausages; dairy products based on vegetable fats from those countries.

On August 20, 2014 and June 22, 2015 correction were made to the list. As a result specific lactose-free dairy products, salmon and trout juveniles, fry oysters and mussels were excluded from the list.

On 22 June 2015, the EU countries extended sanctions against Russia. On June 24, 2015, President Vladimir Putin signed a decree extending Russia’s food imports embargo for one more year starting from 6 August 2015.

On August 13, 2015, the Russian government expanded the list of countries to be covered by the ban on imports of agricultural products, raw materials and food to Russia. Moscow added Albania, Montenegro, Iceland and Liechtenstein, and Ukraine /under special conditions/ to the list.

According to the Federal Customs Service of Russia, the overall imports to Russia from Albania, Montenegro, Iceland, Liechtenstein and Ukraine in 2014 amounted to $11.048 bln, or 3.8% of the total value of imports /$286.7 bln /. In this case, the share of products, which came under sanctions was $656.2 mln, or 5.9%

In 2014, Albania delivered goods worth $22.5 mln to Russia. Of this volume, the share of products that came under counter sanctions amounted to $10.1 mln /45% /. Of this amount, $4.6 mln and $4.2 mln accounted for the supplies of fruits and dairy products based on vegetable fat respectively. In both cases the share of these products in total imports supplied to Russia was small / less than 0.1% /.

In 2014, Iceland exported goods worth $255.6 million to Russia. Of this volume, the share of products that came under counter sanctions amounted to $231.6 million / 91% /. Almost all this amount falls to the share of fish and seafood imports. In 2014, Iceland supplied 125,000 tonnes of these products to Russia, or 16.5% of total imports of fish and seafood.

In 2014, imports from Ukraine to Russia amounted to $10.75 billion. Of this volume, the share of production that came under counter sanctions amounted to $414.5 million /3%/. In particular Ukraine exported 41,000 tonnes of dairy products based on vegetable fats for the sum of $ 124 million / 15.5% of total imports in this category in terms of weight / and 22,000 tonnes of dairy products for the sum of $117.9 million.

Among the "sanctioned" food imports from Ukraine beef ranked third in monetary terms: 13,800 tonnes for the sum of $45.7 million.

In monetary terms, imports of vegetables amounted to $81.9 million, imports of fruits - $16.3 million, poultry - $13.3 million, sausages - $2.9 million, fish - $279,000.

For Ukraine, Russia’s counter sanctions will take effect after the economic part of the Association Agreement with the EU comes into force /rough date: January 1, 2016 /.

In 2014, Montenegro supplied goods worth $6 million to Russia. Of this volume, the value of products which are subject to counter sanctions was $40,000. /6.7 tonnes of vegetables and 37.4 tonnes of fruits /.

According to the Federal Customs Service, in 2014 and 2015, Liechtenstein did not supply any products to Russia which are subject to counter sanctions. Total value of imported goods is $15.2 million.

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