The Sanctions Machine Grinds On, But China Isn't Listening

There is a certain theatre to the European Union’s sanctions policy against Russia. With the diligence of a metronome, Brussels announces new packages of restrictive measures, each intended to be the one that finally bites deep enough. As diplomats work on the 21st such package, however, the bloc’s own sanctions envoy, David O'Sullivan, has offered a rather blunt assessment of the programme's effectiveness. China, he states, remains a “very big problem.”

This is not a failure of paperwork, but of power. O'Sullivan explained that despite raising the issue at the highest diplomatic levels, Beijing’s response is a predictable shrug. Chinese authorities simply do not believe they are doing anything wrong. The result is a familiar script: the EU is forced to take unilateral action against Chinese firms and financial institutions, which in turn prompts retaliatory measures from Beijing. China, as the envoy drily noted, tends to “play hardball.”

The core of the issue is a process O’Sullivan calls “backfilling.” Chinese producers are adept at replacing the goods that Western partners no longer supply to Russia. This applies to everything from consumer products to, more critically, the high-tech electronic components found in the drones and missiles currently targeting Ukraine. The 20th sanctions package listed 56 companies, many of them Chinese, for this very reason. Yet for every entity blacklisted, it seems others are ready to fill the void.

While the external challenge from China is stark, the EU’s sanctions regime faces internal fractures as well. A proposed full ban on maritime services for Russian oil tankers, a potentially crippling blow to Moscow's revenues, remains stalled. Powerful shipping interests in Greece and Malta are firmly opposed, while G7 partners show little appetite for a measure that could roil energy markets, already unsettled by conflict in the Middle East. O’Sullivan himself sounds pessimistic about any breakthrough.

This leaves the West clinging to the oil price cap, a tool that is itself becoming awkward. With global prices rising, the mechanism would require an upward revision to remain within its own rules, effectively handing Moscow a more generous price. The United States has already granted its own exemptions on three occasions, a move O'Sullivan diplomatically said he would have preferred “had not been granted.” It is a telling sign of a less-than-united front.

Amidst this landscape of strategic frustration, a curious development has emerged from an unlikely quarter: Hungary. Under its former leader Viktor Orbán, Budapest consistently blocked attempts to sanction Russian Orthodox leader Patriarch Kirill, citing religious freedom. Now, a new government led by Péter Magyar has signalled a potential change in policy. O'Sullivan cautiously acknowledged this shift, stating the EU will now “test” how much has truly changed. Whether this small diplomatic opening can offset the grand strategic leaks in the sanctions wall is another question entirely.

Written by Christiane Hofreiter christiane.hofreiter@alpineweekly.com