Many European Union diplomats thought that it would become easier to approve sanctions on Russia after the departure of former Hungarian Prime Minister Viktor Orban in May after 16 years in power.
Seen as the most Kremlin-friendly leader in the bloc, other European politicians and diplomats had often lamented that Budapest had watered down both the blacklisting of key Russian individuals and measures aimed at weakening Moscow’s economic and military prowess.
So, expectations were high when the European Commission’s proposal for a 21st package of EU sanctions since the full-scale invasion of Ukraine in February 2022 landed in European capitals in early June.
And early drafts, seen by RFE/RL, indicated that it was indeed full of ambitious measures.
Still No Deal
Yet, nearly six weeks later, there is still no agreement on the entire package, as all 27 EU member states must give their consent.
A self-imposed deadline of July 15 -- the last scheduled Wednesday meeting of EU ambassadors before Belgium’s national day on July 21 when most EU officials head to the beach for up to a month -- came and went.
And what’s more -- pretty much every measure has been pared back or removed to such an extent that EU diplomats RFE/RL has been in touch with now refer to the package as “the Emmental” after the famous Swiss cheese full of holes.
One of the headline proposals was an import ban on Russian fish -- most notably cod, haddock, and pollock. But several member states, including Germany, Poland, and Portugal began demanding exemptions, as Russian fish is used for domestic food processing, including the production of items such as fish sticks. In the end, the measure was watered down so extensively that it was scrapped altogether.
It was a similar story with another big proposal: an automatic ban on Russian ex-combatants in Ukraine entering the EU’s Schengen zone.
Notably, Estonia had pushed for this as 2025 saw a 10 percent increase in tourist visas issued to Russian nationals compared to the previous year, with France, Italy, and Spain accounting for the vast majority of them.
With many Mediterranean countries unwilling to scale back on tourism -- a major source of income -- ahead of what is expected to be another bumper summer, nothing concrete was decided.
Instead, there will just be a commitment to seek changes to the Schengen visa code to ban short-stay visas for soldiers and former combatants if the necessary unanimity can be found.
How To Sanction Oil?
There has also been considerable handwringing over an oil price cap on Urals crude -- Russia’s main export blend and a considerable revenue stream for the Kremlin -- as the transportation of oil and gas through the Strait of Hormuz in recent months has been halted or severely limited due to the war in the Middle East.
The original proposal by the European Commission was to freeze the cap for six months at $44.10 per barrel in order to avoid an automatic jump to $60 on July 15, which would provide a welcome boost to Russian war coffers.
It was then reduced to three months before EU ambassadors, getting perilously close to the deadline earlier this week, agreed to prolong it by just seven days, to July 23.
They will meet again on July 22 with the aim of reaching a final agreement, but the whole issue has become entangled with Greece’s demand for an open-ended exemption to a deal made in October 2025 to ban EU shipments of Russian liquefied natural gas (LNG) to non-EU member states, starting on January 1, 2027.
EU diplomats familiar with the issue say Athens argues that if EU companies are barred from shipping Russian LNG to customers outside the bloc, the business will simply shift to non-EU shipping companies and ports, with Russia continuing to export the fuel. Greece says it would therefore be better to allow its companies to continue carrying out those shipments.
The European Commission will now carry out a quick impact assessment of how much Russia stands to gain or lose if the carve-out is granted.
Austria has also held up approval of the package by demanding that its Raiffeisen bank should be compensated for what Vienna claims was a 2.5 billion euros ($2.9 billion) expropriation of its Russian operations.
The Central European country attempted the same thing last year, asking Brussels to seize and sell 2 billion euros’ ($2.3 billion) worth of frozen Russian assets in Austria, most of which consist of a stake in Austrian construction group Strabag formerly held by Rasperia, a company once controlled by Russian oligarch Oleg Deripaska.
Austria argues the proceeds should compensate Raiffeisen for losses stemming from a Russian court ruling in favor of Rasperia, a case that resulted in the seizure of the bank's Russian operations.
Austria has argued that most of the money would go into a reconstruction fund for Ukraine and that this move would deter the Kremlin in the future from using Russian court rulings to seize EU assets in Russia.
Other member states, however, believe that such a move would result in Moscow being encouraged to target other European companies still in the country.
They have also expressed annoyance at the idea of the EU helping out Raiffeisen, which has chosen to stay in Russia to do business while many other European governments actively discouraged their companies from remaining in that market.
Ultimately, the package is expected to retain more blacklistings of Russian banks as well as vessels that are believed to be part of the Russian shadow fleet, used to evade oil sanctions.
Over 250 Russian individuals and firms will also have their assets frozen and be hit with visa bans, including Arkady Dvorkovich, a former Russian deputy prime minister who is now the head of the International Chess Federation, and Russian Sports Minister Mikhail Degtyarev.
But even here the list has been diluted.
Bulgaria was quick to veto the inclusion of three names included in the original proposal: Patriarch Kirill, the leader of the Russian Orthodox Church; Vagit Alekperov, the head of Russia’s largest private oil company, Lukoil; and the Russian billionaire Iskandar Makhmudov, whose companies provide spare parts for the subway system in the Bulgarian capital, Sofia.
