Exclusive G7 leaders target Russian energy, trade in new sanctions steps – sources

Exclusive G7 leaders target Russian energy, trade in new sanctions steps - sources


By Trevor Hunnicutt and Andreas Rinke

WASHINGTON/BERLIN (Reuters) – Leaders of the Group of Seven (G7) nations plan to tighten sanctions against Russia at their summit in Japan this week, with moves targeting energy and exports in support of Moscow’s war effort officials with direct knowledge of the discussions said.

New measures announced by leaders at May 19-21 meetings will aim to evade sanctions involving third countries, attempt to undermine Russia’s future energy production and curb trade that supports the Russian military, the people said.

Separately, US officials also expect G7 members to agree to adjust their approach to sanctions so that, at least for certain categories of goods, all exports are automatically banned unless they are on a list of approved items.

The Biden administration has previously urged G7 allies to reverse the group’s sanctions approach, which today allows all goods to be sold to Russia unless explicitly blacklisted.

That change could make it more difficult for Moscow to find gaps in the sanctions regime.

While the allies have not agreed to broadly adopt the more restrictive approach, US officials expect that in the areas most sensitive to the Russian military, G7 members will assume exports are prohibited unless they are on a designated list.

The exact areas to which these new rules would apply are still being discussed.

“One would expect to see change in suspicions in a handful of areas, particularly with regard to Russia’s defense industrial base,” said a US official who declined to be named.

The precise language of the G7 leaders’ joint statements is still subject to negotiation and finalization before being released at the summit. The G7 consists of the United States, Japan, Canada, France, Germany, Italy and the United Kingdom.

The G7 leaders’ move against Russia comes as Ukraine’s Western allies look for new ways to tighten already restrictive sanctions against Russia, from export controls to visa restrictions and an oil price cap, which have put pressure on Russian President Vladimir Putin , but the full-scale invasion that began over a year ago.

Some US allies have opposed the idea of ​​broadly banning trade and then issuing category-by-category exemptions.

For example, the European Union has its own approach and is also currently negotiating its eleventh package of sanctions since Russia invaded Ukraine, with the majority targeting people and countries circumventing existing trade restrictions.

“The sometimes discussed approach of ‘we first ban everything and allow exceptions’ will not work in our view,” said a top German official. “We want to be very, very precise and we want to avoid any unintended side effects.”

Meanwhile, any change in language, including language specifying that certain trade is prohibited unless specifically exempted, by G7 leaders does not necessarily immediately lead to more bans or even any change in Russia’s attitude.

“On day one at least, that change in conjecture doesn’t change the substance of what’s allowed, but it matters for the long-term trajectory of where we’re going and the restrictiveness of the overall regime,” the US official said.

Ukraine, backed by Western arms and cash, is expected to launch major counter-offensive operations in the coming weeks to try to recapture parts of the east and south from Russian forces.

Ukrainian President Volodymyr Zelenskiy has been in Europe this week for meetings with Pope Francis and with leaders from France, Italy and Germany. He is expected to address G7 leaders, virtually or in person, at their summit in Hiroshima, the officials said.

Former Russian President Dmitry Medvedev said last month that a decision by the G7 to ban exports to the country would cause Moscow to terminate a grain deal with the Black Sea that would allow the vital export of grain from Ukraine. Food security in the aftermath of the war is also expected to be a major topic at the G7.

(Reporting by Trevor Hunnicutt in Washington and Andreas Rinke in Berlin; editing by Chris Reese)