Netherlands and France push for EU sanctions against banks helping Russia supply its defence industrial base

France and the Netherlands are reportedly promoting in the EU the idea of imposing sanctions on all financial institutions that help Russia conduct monetary transactions to pay for goods, components, or technologies used in the defence industry.

As reported by Reuters, France and the Netherlands propose to ban at the EU level the cooperation of individuals and companies with financial institutions that have been found by EU authorities to be involved in transactions that "significantly support Russia’s military by facilitating exports towards Russia of essential goods for the war effort, such as dual-use goods and technologies or goods listed in annexes VII and XL of the Regulation".

The proposal will be discussed at a meeting of EU ambassadors on Wednesday, where they will discuss the content of the 14th package of sanctions against Russia.

Such restrictions could be a convincing argument for banks in the Middle East, Türkiye and China.

Hungary and possibly Germany may oppose the idea, as the measures could damage Germany's business ties with China.

The work on the 14th package of EU sanctions against Russia has been underway since April 2024.

The 13th package of sanctions was approved by the EU ahead of the second anniversary of the full-scale war. It was aimed, among other things, at countering the circumvention of previously imposed sanctions.