As the holiday season approaches, Ukraine’s allies continue to intensify pressure on Moscow with new restrictions. The ESCU Sanctions Digest #2 offers a detailed look at these latest developments.
On December 16, the European Union approved its 15th sanctions package, targeting 54 individuals and 30 entities linked to Russia’s aggression
Among those sanctioned are 52 vessels from Putin’s so-called “shadow fleet,” used for smuggling oil, weapons, stolen grain, and supporting the Russian energy sector. For the first time, the EU also sanctioned Chinese companies supplying Russia with drone components and microelectronics critical to its military operations. Additional measures targeted the Russian military unit responsible for the missile attack on the Ohmatdyt children’s hospital, senior executives from energy firms, propagandists, individuals involved in child deportations, and two officials from North Korea. Companies supplying CNC machines to Russia’s military-industrial complex were also included, a move reflecting ongoing investigations into these networks.
US Considering Sanctions on Putin's "Shadow Fleet" and Chinese Banks
US Treasury Secretary Janet Yellen announced that the US is considering sanctions against Putin's "shadow fleet" and Chinese banks. This aims to reduce Russia's oil revenues and limit its access to foreign resources for waging war in Ukraine. Yellen also mentioned that the US and its allies might lower the price cap on Russian oil, currently set at $60 per barrel, to increase pressure on Russia.
Furthermore, Yellen stated that the US is discussing with China the identification of financial transactions that could support Russian military actions. She did not rule out the possibility of sanctions against specific Chinese banks if there is sufficient evidence of their involvement in such operations. According to her, warnings to major Chinese banks have already been successful, making them cautious about sanctions that could disconnect them from dollar transactions.
Japanese Company Okuma Refuses to Unlock Six Machines in Russia
This occurred after Japan expanded sanctions against Russia, banning the export of dual-use goods, including CNC machines. Okuma argues that the blocking was done in accordance with contract terms, which allow for equipment shutdown in case of misuse. When power is cut or the machine is moved, a protection system activates, locking the equipment. To unlock it, a unique code is required, which Okuma refused to provide.
Now, the distributor "Pumori-Engineering Invest" demands that Okuma refund the cost of the equipment, as the expensive machines have turned into scrap metal due to the blocking.
In total, about 1,500 CNC machines from Okuma were supplied to Russia, which could potentially also be blocked.
Russia Builds 15 Times Fewer Aircraft Than Promised to Putin
Since the full-scale invasion of Ukraine, Russia has managed to build only seven passenger aircraft instead of the planned 108. This indicates serious problems in the country's aviation industry and the effectiveness of international sanctions that limit access to necessary components. Aircraft production, such as the SuperJet 100, was completed with pre-war stocks, while new models like the MS-21 face difficulties due to the lack of Western components.
According to Russian media, the government plans to increase production to 20 aircraft by 2025, but this will depend on overcoming sanctions restrictions, which currently seems unlikely.
Russia Lacks 60,000 Robotics Specialists
This was stated by Yevgeny Dudorov, Executive Director of the Russian Scientific and Production Association "Android Technology." The main reasons for the personnel shortage are engineers moving to IT and the defense industry for higher salaries. To address this issue, 30,000–40,000 specialists are needed for the industry, 12,000–15,000 for robot development and manufacturing, and another 20,000 for integrating machines into production.
A similar shortage of personnel is observed in all sectors of the Russian economy. It is interesting to note whether this is related to reports from the General Staff of the Armed Forces of Ukraine—combat losses of Russian military personnel exceed 760,000 people.
These updates from the second week of December illustrate the growing impact of international sanctions and economic pressure on Russia. Follow our resources to stay informed with the next edition of the Sanctions Digest.