Brussels - The EU has approved a new package of sanctions against Russia, aimed predominantly against Russian financial and arms companies. For example, the 28-member bloc issued a ban on exports to Russia of so-called dual-use goods, or equipment that have civilian as well as military uses and thus can be used to manufacture guns, explosives, or missile systems. The EU's exports of dual-use items to Russia amounts to roughly EUR 20 billion a year.
“Practically anything can fall into this category, for example software or engineering products,” said Czech Defense and Security Industry Association president Jiri Hynek. The sanctions, he says, will harm EU exporters, including Czech engineering companies such as Kovosvit Mas or PBS Velka Bites. “Between 70 percent and 80 percent of these companies' exports go to Russia, so the reduction may be massive,” said Hynek, adding nonetheless that the sanctions will not affect ongoing contracts, such as the French sale of amphibious assault ships Mistral to Russia.
The sectoral sanctions include also a ban on military exports to Russia. In the Czech Republic, this affects for example the export of spare parts for Czech-made L-39 or L-410 military aircraft. “In this case, the export amounts to roughly CZK 120 million (EUR 4.4 million), so Czech companies will not be affected,” said Hynek. However, if Russia reciprocates and stops exporting for example spare parts for Czech military helicopters, that will be a problem, he said.
The measure will also punish Russian banks. “The measure would consist in prohibiting any EU persons from investing in debt, equity and similar financial instruments with a maturity higher than 90 days, issued by state-owned Russian financial institutions,” Financial Times quoted from an unofficial EU paper.
However, Russian banks tend to rely little on bonds to secure financing. According to the Czech branch of Russian state-owned Sberbank's annual report from 2013, only 13 percent of its assets was covered by bonds, worth CZK 9.4 billion (EUR 342 million).
“Given the fact that it is not known so far what specific entities will be affected by the sanctions and what will be their extent, we are not going to comment on this matter,” said the Czech unit of Sberbank's spokeswoman Hana Drapalova.
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