EU and US impose new sanctions on Russia to force ceasefire in Ukraine

The European Union and the United States have imposed new sanctions against Russia in a bid to force the Kremlin to accept an immediate ceasefire in Ukraine.

The US announcement marks the first time the second administration of Donald Trump has introduced economic restrictions on Moscow.

Trump has been reluctant to take such a step, hoping that his Russian counterpart, Vladimir Putin, will engage in diplomacy and agree to end the war.

The decision represents a win for Europeans, who have spent 10 months pleading with Washington to tighten the screws on the Russian economy, with no success until now.

The US sanctions target Russia's two largest oil companies, Rosneft and Lukoil, with the former being blacklisted also by the bloc. Brussels has avoided touching Lukoil due to a long-standing exemption for Hungary and Slovakia, which continue to buy Russian oil.

"Now is the time to stop the killing and for an immediate ceasefire," Scott Bessent, the US Secretary of the Treasury, said in a statement.

"Given President Putin's refusal to end this senseless war, Treasury is sanctioning Russia’s two largest oil companies that fund the Kremlin's war machine. Treasury is prepared to take further action if necessary to support President Trump’s effort to end yet another war. We encourage our allies to join us in and adhere to these sanctions."

His comments come as the White House called off a summit in Budapest between Trump and Putin after sensing Russia's maximalist position remained unchanged.

"We cancelled the meeting with President Putin. It didn't feel right to me," Trump said.

Before the announcement, Bessent spoke with Ursula von der Leyen, the president of the European Commission. Von der Leyen has been a vocal proponent of crippling Russia's war machine through sweeping economic restrictions.

"This is a clear signal from both sides of the Atlantic that we will keep up collective pressure on the aggressor," she said.

At the same time in Brussels, ambassadors agreed on the 19th package of sanctions since February 2022, according to the Danish presidency of the EU Council.

The deal was made possible after Robert Fico, the prime minister of Slovakia, relented and lifted his veto over unrelated demands about high energy prices and the future of the automotive industry, which he was poised to bring to a summit on Thursday.

It introduces the bloc's first-ever ban on imports of Russian liquefied natural gas (LNG) as of 1 January 2027. The prohibition will allow the remaining suppliers (Belgium, France, the Netherlands, Spain and Portugal) to invoke force majeure and break long-term contracts with Moscow that could otherwise lead to multi-billion-euro lawsuits.

The sanctions forbid all transactions with Rosneft and Gazprom Neft, and blacklist an additional 117 vessels from the "shadow fleet", which is used to circumvent the price cap on Russian seaborne oil, bringing the total to 558 ships.

The vessels are denied access to EU ports and EU services.

A host of financial measures are applied, targeting several Russian banks, payment systems, special economic zones, cryptocurrency platforms and 45 entities accused of enabling circumvention, including 12 in China and Hong Kong.

A key novelty is a mechanism that can allow capitals to curb the movement of Russian diplomats across the passport-free Schengen area.

Members of Russia's diplomatic and consular missions, including administrative and technical staff and family members, will now be obliged to notify their intention to travel to or transit through another member state beyond their host nation.

The notification should be issued at least 24 hours before arrival, and detail the means of transport and the date and point of entry/exit. The receiving state will then have the possibility to either allow or deny passage.

In its reasoning to propose the mechanism, the European External Action Service (EEAS) had argued that Russian diplomats are "often involved in activities that contribute to Russia's aggression against Ukraine, notably by spreading the Russian rhetoric on the causes of the war, its unfolding and the role of the Union".

Russian diplomats who move across the bloc are at risk of engaging in "coordinated information manipulation and interference or other acts targeted at manipulating public opinion", said the original document drafted by the EEAS.

The 19th package is expected to be formally adopted on Thursday, just before the start of an EU summit in Brussels.

This article has been updated.