Brussels has proposed sanctions against Chinese companies for supporting the Russian war machine for the first time since the start of the conflict in Ukraine, in a development likely to increase tensions with Beijing.
Seven Chinese companies accused of selling material that could be used in weapons have been listed in a new sanctions package to be discussed by EU member states this week, which has been seen by the Financial Times.
Some of the companies have already been placed under sanctions by the United States. The EU move is likely to upset Beijing, which is keen to prevent Brussels from siding with Washington in their battle for global influence.
Brussels has so far avoided targeting China, arguing that there was no evidence to show it was directly supplying arms in Moscow.
The list of sanctions must be approved unanimously by the 27 member states before it can be applied.
Two mainland Chinese companies on the list, 3HC Semiconductors and King-Pai Technology, have already been placed under US sanctions. Two Hong Kong-based companies that are on the EU list are already on the US Treasury list: Sinno Electronics and Sigma Technology.
The European Commission’s sanctions proposal stated: “Given the key role of electronic components used by the Russian military and industrial complex to support the war of aggression against Ukraine, it is also appropriate to include certain other entities in the third countries involved in the circumvention of trade restrictions as well as certain Russian entities involved in the development, production and supply of electronic components for the Russian military and industrial complex.
He accused 3HC, which manufactures computer chips, of “attempting to evade export controls and acquiring or attempting to acquire U.S.-sourced items to support the military and/or defense industrial base Russian”.
King-Pai provides microelectronics to Russia that “have defense applications that include cruise missile guidance systems,” the U.S. Treasury previously said.
Brussels is also proposing sanctions against certain Iranian companies involved in manufacturing and supplying drones to Russia.
The EU seeks to tackle the evasion of sanctions more generally. The draft includes measures that would allow the EU to restrict sales of certain products to third countries if diplomatic pressure does not change their behavior. Member States should approve individual measures against companies or countries.
There are also prohibition powers tankers concealing their location without valid reason at EU ports. The FT reported that ships were circumventing an embargo on Russian oil imports by sea by pretending their cargoes came from elsewhere.
The commission also proposed expanding the range of banned exports to Russia.
Finally, it eases restrictions on asset transfers to sanctioned entities to allow Western companies in joint ventures with them to sell.
The commission declined to comment.
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