EU informs India on firms breaking sanctions through dealings with Russian firms

The information was shared with India as part of the EU’s ongoing contacts with third countries as part of efforts to finalise the 15th package of sanctions against Russia over its invasion of Ukraine.

The information was passed on to Indian authorities when the EU sanctions envoy, David O’Sullivan, visited New Delhi in October, the people said on condition of anonymity.

The 15th package of sanctions will consist of the listing of vessels that are part of the “shadow fleet” or “dark fleet” that ships Russian crude oil around the world, and entities that have been supplying “battlefield items” to Russia, the people said.

The Indian side sought more information from the EU in this regard while conveying that it has the means to deal with this issue, the people said.

There was no response from Indian officials to a request for a response on this matter.

The EU has worked with like-minded partners to draw up the list of “Common High Priority sanctioned goods” or “battlefield items” for which businesses should apply “particular due diligence” and which “third countries must not re-export to Russia”, the bloc said in a recent statement.

EU agencies and counterparts in the US, the UK and Japan identified dual-use goods and advanced technology items either used in Russian military systems found on the battlefield in Ukraine or critical to the production or use of such military systems. These items include electronic components such as integrated circuits and radio frequency transceiver modules, and items needed for manufacturing electronic components or high precision complex metal components.

Two entities from India – Bengaluru-based Si2 Microsystems Pvt Ltd and Gurugram-based Innovio Ventures – are already subject to the EU’s specific export restrictions. Si2 Microsystems was included in the EU’s 13th package of sanctions on February 23 for trading with Russia in electronic components, including of EU-origin, while Innovio Ventures was part of the 14th package of sanctions announced on June 24 for being associated with Russia’s military-industrial complex.

The people said these items are used to make Russian military equipment more precise and more lethal. The EU has already listed hundreds of entities that are either associated with the Russian military-industrial complex and actors based in third countries that have been actively undermining the EU sanctions framework, they added.

“The EU will continue to work with Indian authorities to find a systemic solution to stop sanctions circumvention of Common High Priority goods to Russia,” one of the people cited above said.

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O’Sullivan said his job is to “make it harder, slower and more expensive for Russia to access” the EU’s technology. “Data at our disposal shows that we are succeeding. We estimate that Russia is paying about 130% more for semiconductors and 300% more for second-hand machine tools after we imposed sanctions,” he said.

Noting that he travelled to India in October for the second time to discuss “systemic solutions to stop the illicit flow of Common High Priority items to Russia” with Indian authorities, O’Sullivan said, “Several third countries I visited have put in place specific mechanisms to solve this issue.”

O’Sullivan described Russia’s invasion of Ukraine as “existential for the EU” and said: “We will continue to disrupt the activities of the Russian military industrial complex by shutting down illicit procurement networks on a constant basis.”

After the US recently sanctioned 18 Indian companies for supplying electronic, engineering and aviation components to Russia, the external affairs ministry said none of them had violated domestic laws, though authorities are sensitising firms to new export control measures that can impact their operations.

India is a member of three key multilateral non-proliferation export control regimes – the Wassenaar Arrangement, Australia Group and Missile Technology Control Regime – and has effectively implemented relevant UN Security Council sanctions and UNSC Resolution 1540 on Non-Proliferation, external affairs ministry spokesperson Randhir Jaiswal said at the time.

“Regular strategic trade export control outreach events for Indian industries and stakeholders are being carried out by agencies of the government of India,” he said.