EU closes loophole allowing multimillion-euro arms sales to Russia

By Francesco Guarascio

BRUSSELS (Reuters) – The European Union has closed a loophole that allowed EU governments to export weapons worth tens of millions of euros to Russia last year alone despite an embargo which took effect in 2014 after Russia annexed Ukraine’s Crimea region.

EU countries last year sold to Russia weapons and ammunition worth 39 million euros ($42.3 million), according to the latest data made available by the EU Commission – up more than 50% from 2020, when sales were worth 25 million euros, a volume in line with previous years.

The EU had banned the export of arms to Moscow in July 2014 in reaction to Russia’s annexation of Crimea, but a clause in the sanctions permitted sales under contracts signed before August 2014.

Countries with large defence industries, such as France and Germany, were among the largest exporters.

The loophole has come under fire from some EU governments since the start of Russia’s invasion of Ukraine on Feb. 24, which the Kremlin calls “a special military operation”.

In a bid to weaken the Kremlin’s war efforts in Ukraine, the EU has imposed five rounds of sweeping sanctions banning exports to Russia of a large variety of technology that could be used by the defence industry.

But EU governments failed to immediately agree to scrap the exemption on arms sales until last week, when the loophole was closed as part of the fifth package of EU sanctions, EU diplomats and officials told Reuters.

A legal text published on April 8 in the EU official journal deletes that exemption.

The EU Commission did not mention the closure of the loophole in its public communication about the fifth package of sanctions.

A spokesperson for the Lithuanian diplomatic mission to the EU said the exemption had been eliminated, but EU countries will be able to continue moving Russia-made weapons to Russia for repairs before they are returned to the EU.

The EU Commission, which is responsible for preparing sanctions, did not propose the amendment on closing the loophole as it was not clear whether it had the unanimous political backing of the 27 EU states, diplomats said.

But at a meeting last week, envoys agreed to amend the text after fresh criticism from some governments, including Poland and Lithuania, diplomats who attended the meeting said.

($1 = 0.9217 euros)

(Reporting by Francesco Guarascio @fraguarascio; Editing by Hugh Lawson)