The European Union's twentieth sanctions package against Russia proved to be an ambiguous document. Along with the expansion of restriction lists came the removal of restrictions from a number of Chinese banks that previously figured in schemes to circumvent the sanctions regime.
This concerns financial institutions through which, according to investigators and Western intelligence services, transactions were conducted in favor of Russian companies and the defense complex. However, in the final version of the package, they ended up outside the sanctions lists or received special exemptions.
The Logic of Compromise
Officially, Brussels justifies such decisions on diplomatic grounds: pressure on Beijing should occur through negotiations rather than through blocking banking channels that are also used for legitimate trade. This is a standard EU position in its relations with China—avoiding steps that Beijing could classify as "economic coercion."
However, critics within the European Union—in particular representatives from Baltic countries and Poland—insist that this logic turns the sanctions regime into an instrument with predetermined loopholes. If a bank is documented to have serviced circumvention schemes and simultaneously avoids being added to lists, the signal to other potential intermediaries is obvious.
What Is Known About Specific Institutions
Among the banks that received easing or remained outside the package are institutions that appeared in reports by the U.S. Treasury Department and materials from the REPO Task Force as key nodes in the supply chains of sanctioned goods to Russia. The attribution of specific transactions remains partially classified, but the very fact of their presence in the relevant investigations is public.
The European Commission provided no official comments on the logic behind specific exemptions.
A Precedent With Consequences
The EU's sanctions architecture is built on the principle of escalation: each subsequent package should close the loopholes of the previous one. When the same package simultaneously expands restrictions and removes them from documented intermediaries—this is not a technical detail but a structural contradiction.
For Ukraine, which systematically lobbies for stronger sanctions pressure, the issue is not the number of items on lists, but whether these lists actually close real channels financing the Russian military machine.
If the EU can document a bank's participation in circumventing sanctions but still removes it from restrictions for the sake of diplomatic balance with Beijing—on what grounds will the next package be more effective?
