Brussels has proposed imposing sanctions on Chinese companies for supporting the Russian military machine for the first time since the start of the war in Ukraine, which is likely to increase tensions with Beijing, the Financial Times reports.
Seven Chinese companies accused of selling weapons-grade equipment have been included in a new package of sanctions to be discussed by EU member states this week, the newspaper said.
Some companies have already fallen under US sanctions.
"Two mainland Chinese companies on the list, 3HC Semiconductors and King-Pai Technology, are already under US sanctions. Two Hong Kong-based companies on the EU list are already on the US Treasury list: Sinno Electronics and Sigma Technology ", the article says.
3HC, which makes computer chips, was accused of "attempting to evade export controls and acquiring or attempting to acquire goods of American origin to support Russia's military and/or defense industrial base."
King-Pai is supplying Russia with microelectronics that "have defense applications, including cruise missile guidance systems," the US Treasury previously said.
The EU's move is likely to irritate Beijing, which seeks to prevent Brussels from siding with Washington in their struggle for global influence, the newspaper writes. So far, Brussels has avoided attacking China, arguing that there is no evidence that it has directly supplied arms to Moscow.
The sanctions proposal from the European Commission states: "Given the key enabling role of electronic components for use by the Russian military-industrial complex to support a war of aggression against Ukraine, it is also appropriate to include some other actors in third countries involved in the circumvention of trade restrictions, as well as certain Russian entities involved in the development, production and supply of electronic components for Russia's military-industrial complex".
Brussels also proposes imposing sanctions against some Iranian companies involved in the production and supply of drones to Russia, the newspaper notes.
The EU seeks to solve the problem of circumvention of sanctions in a broader sense. The draft includes measures that would allow the EU to limit the sale of certain goods to third countries if diplomatic pressure does not change their behavior.
It is also about the power to ban oil tankers that hide their location without good reason from entering EU ports. The FT newspaper reported that vessels are circumventing the embargo on importing Russian oil by sea by pretending their cargo is from somewhere else.
As mentioned, the European Commission also proposed to expand the list of goods prohibited for export to Russia.
It also eases restrictions on the transfer of assets to sanctioned companies to allow Western companies that have established joint ventures with them to sell assets, the newspaper writes.
The sanctions list requires unanimous approval by 27 member states before it can be implemented.
The USA, Europe and other key allies of Ukraine are preparing new sanctions against Russia. Packages will be implemented individually, but will be coordinated. A key goal is to close loopholes in existing restrictions and address sanctions evasion in general, sources told Bloomberg.
As Bloomberg reported, the EU is considering limiting the transit of goods through Russia as part of the 11th package of sanctions against the Russian Federation.
