The European Union plans to impose sanctions on more than 1,600 companies that, according to its statements, facilitate Russian military aggression against Ukraine. This represents the largest package in terms of the number of companies the EU has ever proposed to include in its sanctions list. Sources familiar with the situation report that the combined annual turnover of these companies exceeds 20 billion dollars, and their total number of employees is over 265,000. If adopted, this package will increase the number of companies under EU sanctions by nearly 50% since the onset of Russia’s full-scale war against Ukraine, according to anonymous sources. For the restrictions to take effect, all EU member states must unanimously support them.
The proposal is another effort by the European Union to intensify pressure on Russian President Vladimir Putin and encourage Moscow to engage in peace negotiations. European leaders believe that bolstering Ukraine’s positions on the front lines and the worsening economic situation in Russia present an opportunity for a new diplomatic process, especially as Moscow has already revised its economic growth forecast for 2026 downward. U.S. President Donald Trump has also reactivated his involvement in diplomatic efforts, pledging to assist Ukraine in strengthening its air defense system and hosting President Volodymyr Zelensky in Washington on Tuesday.
Process of adopting sanctions and additional measures
At the same time, the EU is finding it increasingly challenging to reach consensus on new sanctions against Moscow, as some countries are requesting exceptions to mitigate economic repercussions. In this context, officials have informed EU ambassadors that the new proposal is expected to be presented in the coming weeks, allowing member states sufficient time to consider it. A final decision could be made during the foreign ministers’ meeting in October.
Separately, the EU is also preparing a new package of restrictive measures related to the forced deportation of Ukrainian children, which may also be adopted in the autumn.
Increase in attacks and diplomatic efforts
The preparation of this new sanctions package occurs amid escalating hostilities. Ukraine is targeting oil refineries and fuel depots deep within Russian territory, while Moscow is conducting massive attacks on major cities, depleting Ukraine’s stockpiles of interceptor missiles.
Meanwhile, Germany, France, and Great Britain are spearheading new diplomatic efforts to engage Putin in peace negotiations in coordination with Volodymyr Zelensky. The team of the President of the European Council, António Costa, has also reached out to the Kremlin to establish a channel for preparing potential negotiations to end the war.
However, Putin has dismissed all calls for a ceasefire prior to the start of negotiations, arguing that it would allow Ukraine to rearm and bolster its defenses. He continues to demand the transfer of territories in the eastern part of the Donetsk region to Russia as a condition for any peace agreement, a demand that Kyiv categorically rejects.
Source: Bloomberg
