Blurred boundaries on sanctions give EU wriggle room on Russia

It was a busy start for Ireland's new Minister for Foreign Affairs, Charlie Flanagan as he attended his first EU foreign affairs council yesterday in Brussels. Flanagan was not the only new face, with British foreign secretary Philip Hammond in attendance less than a week after he replaced William Hague at the UK foreign office.

With Britain pushing for a tough stance against Russia, Hammond was unequivocal on Britain's position ahead of the meeting, suggesting the EU needed to "go further" in its response to Russia.

In the event, the 28 EU foreign ministers went as far as they could realistically go. They mandated the European Commission to present proposals on further targeted measures on Russia in defence, dual-use goods, access to capital markets, and sensitive technologies including in the energy sector.

For more hawkish states, the decision to link “a package of further significant restrictive measures” with “full and immediate co-operation” with Russia pushes a decision on sanctions into the future, failing to punish any wrongdoings already committed, such as Russia’s alleged indirect involvement with the downing of flight MH17.

Lukewarm on sanctions

Ultimately, support for full "phase three" sanctions remains lukewarm among some states, though many may have been wary of incurring the wrath of Moscow while the flight investigation is ongoing.

For all the debate about moving to phase three sanctions, in reality the distinction between phase two and phase three sanctions is not clear.

For example, a European Commission document from April setting out the possible impact of sanctions on member states sub-divides phase three sanctions into three groups: “low-intensity” sanctions, which include restricting sales of luxury goods such as caviar, furs and diamonds; “middle-intensity” sanctions, which would restrict the import and export of sensitive technologies and ban the import of coal, as well as some capital market restrictions; and “high-level” sanctions, which include an import ban on gas and oil, and more stringent capital market restrictions.

Some phase three sanctions have already been implemented – the suspension of European Investment Bank funding, categorised by the European Commission as a low-intensity phase three sanction, was already endorsed by the EU leaders last week, for example, leading many to dub last Wednesday's fresh round of sanctions as "Phase 2.5".

This blurring of boundaries gives the EU wriggle room to toughen its response to Russia without endorsing full-scale sanctions.