Chinese and Indian Companies Face Possible Sanctions for Ties to Russia
According to reports, Chinese and Indian companies may soon be hit with sanctions due to their connections with Russia. The European Union is currently weighing the possibility of imposing sanctions on three Chinese companies for their support of Russia, while also evaluating firms based in Hong Kong, India, Serbia, and Turkey. Should this initiative come to fruition, it would be the first time the bloc places sanctions on businesses from China and India since Russia’s invasion of Ukraine.
The aim of the proposed sanctions is to prevent companies from engaging in business with these identified entities, which are believed to be aiding the Kremlin in its conflict with Ukraine. If approved by member states, this proposal would signify a significant expansion in the EU’s sanctions regime, which has previously targeted Russian banks by excluding them from the SWIFT payment system and imposing restrictions on oil prices.
China and India, despite increased tensions in the region, have notably refrained from implementing sanctions against Russia. In fact, their purchases of Russian crude oil have even increased in the face of these ongoing sanctions by the EU, the US, and other Western nations against Russia.
In an effort to maintain diplomatic relations, European Commission president Ursula von der Leyen visited Beijing in April 2023, where she urged Chinese leader Xi Jinping to reconsider China’s support for Russia’s military actions. Von der Leyen emphasized the importance of China’s stance to the European Union, stating that supplying military equipment to Russia would not only violate international law but also severely damage EU-China relations.
Analyst comment
Positive news:
The potential sanctions on Chinese and Indian companies for their ties to Russia could indicate a significant expansion in the EU’s sanctions regime, potentially deterring further support of the Kremlin’s actions in Ukraine.
Short analysis:
If the proposed sanctions are approved, it is likely that Chinese and Indian companies would face restrictions on their business activities with Russia. This could have a negative impact on the market as it would limit their ability to engage with these identified entities. However, it may also serve as a deterrent for other companies from engaging in similar activities with Russia, reinforcing the EU’s sanctions regime and potentially leading to a de-escalation of the conflict in Ukraine.
