EU-Russia Sanctions War. Part I: The legal framework


Balazs Horvathy             Adrienn Nyircsák


  • As a response to the annexation of Crimea and to the escalation of the tension in Ukraine, the European Union imposed economic sanctions on Russian and Ukrainian individuals, and has repeatedly increased their scope since.
  • The restrictive measures are used as punitive and deterrent tools in the framework of the EU’s common foreign and security policy.
  • The sanctions cover three main areas: economic sanctions imposed on individuals (asset freeze, travel ban, restriction of financial services), restrictive economic measures against Russia and Crimea (prohibiting the export of military goods, dual-use goods and technology and restricting investment activity), and punitive diplomacy.
  • Russia has reacted to the measures by placing an import ban on food originating from the European Union, the United States, Australia, Canada and Norway. The counter-sanctions deeply affect European food producers. The European Commission has taken swift action to support the industry against the loss.
  • During the past months of the Ukrainian crisis, the European Union has shown a greater-than-ever capacity to act carry an autonomous and cohesive foreign policy, however, it yet has to develop a more anticipatory and comprehensive understanding of potential counter-effects of the sanctions and their impact on individual member states.

The escalation of the crisis in Ukraine reached a tipping point in March 2014, when the annexation of Crimea by the Russian Federation, following a referendum widely deemed illegitimate, triggered a concerted response from the EU in the form of a series of restrictive measures labelled “economic sanctions”. In the first part of our analysis, we evaluate the legal framework of EU sanctions and present the Russian counter-measures; after which, in the second part, we turn to the discussion of the repercussions of the sanctions on the national level and the political expression of the perceived clash between Union and national interests.

EU economic sanctions: policy objectives and legal background

In March 2014, after diplomatic attempts at persuading Russia to engage in de-escalation had clearly proven ineffective, the Council decided to step into the next phase of restrictions and adopted the first set of economic sanctions affecting Russian and Ukrainian individuals (travel bans and asset freezes) [see Council Decision 2014/145/CFSP, OJ L 78/16, 17.3.2014; and Council Regulation (EU) No 269/2014, OJ L 78/16, 17.3.2014]. As the conflict between Ukraine and Russia is transforming into a war-like situation, additional amendments have been made in the last months in order to extend the scope and subjects of the restrictions. The most recent modifications entered into force on 12 September 2014 [see Council Decision 2014/658/CFSP, OJ L 271/47, 12 September 2014; and Council Regulation (EU) No 959/2014, OJ L 271/1, 12 September 2014]. The EU economic sanctions are designed to impose a cost on Russia for fuelling and escalating the conflict in Ukraine, and the legal acts enforcing the sanctions are backed by two main policy objectives. First, as a general objective, the sanctions aim at encouraging Russia to de-escalate the crisis, i.e. to cease activities which undermine Ukrainian territorial integrity and sovereignty threaten the stability and security in the region (e.g. discontinuing the military support for the pro-Russian separatists, etc.). Second, as specific purpose, the EU sanctions are trying to reflect on human rights violations and the annexation of a part of Ukraine, which are addressed by individual restrictive measures on decision-makers, politicians, companies and other entities deemed to be responsible for the foregoing abuses.

Accordingly, the basic purpose of EU economic sanctions is to accomplish broader foreign policy and security goals, just as the European Council President van Rompuy highlighted: “[the EU sanctions] are foreign policy tools. Not a goal in themselves, but a means to an end.” From this perspective, it is not an exaggeration that economic sanctions can be explained more easily as a foreign policy instrument than as a legal measure. However, the founding Treaties provide a substantive framework which determines the public policy leeway of the European Union when introducing economic sanctions. As in the actual case no UN sanctions had been previously introduced, the EU economic sanctions are imposed as autonomous measures pursuant to EU’s Common Foreign and Security Policy. The current structure of the restrictive measures in force can be divided thematically into the following three main categories:

a) Economic sanctions imposed on individuals (natural and legal persons)

These restrictions encompass asset freeze and travel bans of certain natural persons and other non-state entities (companies). Asset freeze and travel ban are imposed on 119 people and 23 companies (as of 12/8/14), including entities in Crimea and Sevastopol whose ownership has been transferred contrary to Ukrainian law. The asset freeze concerns funds, economic resources (cash, cheques, bank deposits, stocks, shares etc.) controlled by targeted people or other entities. Practically the asset freeze means that the economic resources may not be accessed, moved, sold, or rented. Persons targeted by a travel ban are denied entry in the EU. The Council notifies persons and entities targeted by these sanctions, however, they may recourse to legal remedies, having right to provide observation on the listing and also to challenge the measure before the CJEU (Recently four cases has been brought to the CJEU: T-290/14 Portnov v Council; T-331-2/14 Azarov v Council; T-339/14 Kurchenko v Council; T-346-8/14 Yanukovych v Council). In addition to the previous sanctions, some specific prohibitions regarding EU citizens and companies have to be highlighted here. Since the Council imposed an embargo on major state-owned Russian banks, EU nationals and companies may no longer buy or sell financial instruments (bonds, etc.) from these Russian institutions. In other terms, the economic sanctions introduced by the European Union, might have impacts not only on foreign nationals and companies, but they can directly effect EU citizens and EU economic actors as well.

b) Restrictive economic measures against Russia and the Crimea /Sevastopol

The trade restrictions cover all sale, supply, and transport of the military goods from/to Russia included in the EU common military list. The ban has been recently extended to the export of the dual-use goods and technology, and a specific restriction has also been introduced on goods originating from the Crimea/Sevastopol (unless accompanied by a certificate of origin from the Ukrainian authorities). Moreover, the economic sanctions impose restrictive measures on investment activity. These measures are related to the infrastructure projects in transport, in telecommunications and in the energy sector, as well as to the exploitation of oil, gas and minerals, which is also underpinned by an export embargo on key equipments for these sectors. Finance and insurance services related to such transactions are banned as well.

c) Punitive economic diplomacy against Russia

In order to strengthen the political implications of the sanctions, the European Union is trying to effectuate a punitive diplomacy against Russia. The Council has invited the Commission to re-assess EU-Russia cooperation programmes with a view to taking a decision, on a case by case basis, on the suspension of the implementation of EU bilateral and regional cooperation programmes, not including the projects dealing exclusively with cross-border cooperation and civil society. Moreover, the planned EU-Russia summit was cancelled, and the EU Member States decided not to hold regular bilateral summits. As a consequence, the negotiations with Russia on visa matters as well as on a new agreement were also suspended. As a diplomatic action, EU Member States also supported the suspension of negotiations over Russia’s accession to the OECD and the International Energy Agency; and instead of the 40th G8 summit, which was due to be held in Russia at the Black Sea resort of Sochi, a G7 meeting was organised in Brussels on 4–5 June 2014. In addition to that, the European Council requested the European Investment Bank on 16 July 2014 to suspend the signature of new financing operations in the Russian Federation, and EU Member States signalled that they would coordinate their positions within the EBRD Board of Directors with a view to also suspending financing of new operations.

Russian counter-measures

On 6 August 2014 Russian President Vladimir Putin signed a decree prohibiting food import from the European Union (and from the United States, Australia, Canada and Norway) in retaliation for the Western economic sanctions on Russia. The import ban covers beef, pork, fruits and vegetables, poultry, fish, cheese, milk and dairy products. Since Russia is the EU's second-biggest market for food exports (10%), the ‘total food ban’ came hard on the EU food industry, above all, the EU agriculture has to face serious repercussions, knowing the fact that Russia is a major buyer of European fruit and vegetables (21.5% of EU vegetable exports and 28% of fruit exports went to Russia in 2011).

The Commission reacted quickly and introduced immediate support measures for the milk sector as well as for perishable fruit and vegetable producers, and as a medium-term response, confirmed its intention to provide an additional €30 million of EU funding for CAP promotion programmes starting in 2015. On 15 August 2014, the Foreign Affairs Council has politically condemned the Russian restrictive trade measures and expressed its expectation that third and candidate countries will refrain from measures which are aimed at exploiting new trading opportunities arising from the introduction of the Russian embargo.


The analysis of EU decisions on the sanctions against Russia has shown that the legal framework provides the proper mechanisms to react quickly on the escalation of the conflict and establishes smooth procedures to adopt measures of both diplomatic and economic natures. Even though the effectiveness of the sanctions has been disputed, the quick and coordinated reactions coming from member states in the past months have demonstrated the EU’s capacity for cohesive external action and sent the image of a resolute alliance to the outside world. Despite this appearance, member states stay divided by their own interests behind the scenes, which calls for more thoughtfulness and foresight when making decisions on EU restrictive measures.

This issue – the perspective of the member states’ national interest – will be addressed in the second part of our analysis


 The views expressed above belong to the author and do not in any way represent the views of the HAS Centre for Social Sciences.