During a pivotal panel, a crucial concern emerged regarding the region's capacity to effectively combat strategic corruption. The discussion shed light on alarming loopholes within the existing sanctions regime concerning Russian oil exports. These loopholes, created through special derogations, enable Russia to bypass restrictions and continue exporting refined oil products, posing a significant threat to the overall effectiveness of the sanctions.

The urgency of fortifying Europe's economic security was further underscored by revelations about the inefficiencies in enforcing the oil price cap. The intricate maneuvers carried out by intermediaries, artificially inflating shipping and insurance costs, have allowed Russia to circumvent the price cap and generate additional revenue for the Kremlin. This not only compromises economic stability but also emphasizes the necessity for more stringent measures to address these vulnerabilities within the sanctions framework.

Highlights from the discussion

Martin Vladimirov, Director, Energy and Climate Program, CSD  
“The Russian invasion of Ukraine was a good wake-up call for Europe to start the process of strategic decoupling from its excessive dependence on Russian economic influence. We believe that the oil price cap should be lowered to $40 per barrel because that's where Russia balances its budget.”

Borja Pastor, Head, Financial Crime Team, European Financial and Economic Crime Centre, Europol 
“On a global level, we have a 2 trillion dollar problem. This is not only an EU problem, it is a global problem. This is the reason why we need to harmonise anti-corruption policies and anti-corruption strategies, not only in the EU, but in the world.”

Isaac Levi, Europe-Russia Policy & Energy Analysis Team Lead, Centre for Research on Energy and Clean Air
“Russia is more dependent than ever on earnings from oil to fund the war. While the effects of sanctions were originally positive, the impact is dropping because of loopholes. Originally these sanctions did have a positive effect at reducing Russia’s fossil fuel exports, but without proper monitoring, enforcement and closure of the associated loopholes. Russia has earned €132 billion exporting seaborne oil since the start of the bans imposed by the EU. More than half of this oil was transported on tankers that were either owned or insured in the EU/G7 countries.”

Christopher Lambin, Senior Data Investigations Advisor, Global Witness
“All you need to do is look in the dataset and you will find sanctioned products being sold to Russia by UK and European firms in plain sight. They just happen to be buried in these datasets, but buried only very shallowly, and are easily accessible.”

Jeffrey Lightfoot, Program Director, Europe at the Center for International Private Enterprise
“Economic security measures can be a very good thing, but in a weak rule-of-law environment they could also be a bad thing, because anytime the government gets involved in economic instruments and is moving into the investment space, subsidies or things of that nature, then these tools can be somewhat risky.”