European Union is considering sanctions on Chinese firms for aiding Russia’s war machine

The European Union is looking to sanction Chinese firms that it believes have helped Russia circumvent Western penalties, looking to slap measures against these mainland China businesses for the first time since the war began, three EU officials told CNBC.

The 27-member bloc is working on a 13th package of sanctions in the wake of Russia’s full-scale invasion of Ukraine, which could be ready later this month to mark the second-year anniversary of the war.

One of the EU officials, who did not want to be named due to the sensitive nature of the talks, said: “Chinese companies and entities from other third countries, which are involved in supporting Russia to circumvent sanctions” will feature in the next round of measures levied against Russia for its war in Ukraine.

Another official said that the 27 EU ambassadors will discuss the proposal at a meeting on Wednesday, adding that “work is ongoing.”

The comments come after a report from Bloomberg said the sanctions proposal includes three companies based in China.

European officials have previously underlined the close relationship between Moscow and Beijing. Last month, European Commission President Ursula von der Leyen said at the World Economic Forum in Davos that “Russia’s failure is also economic. Sanctions have decoupled its economy from modern technology and innovation. Russia is now dependent on China.”

Data from China’s General Administration of Customs released in January showed that China’s trade relationship with Russia hit a new record high of $240 billion in 2023, according to Reuters. The figures showed increases in Russia’s purchases of Chinese cars and smartphones.

CNBC reported in January that Russia is still obtaining Western technology despite ongoing sanctions. China, Hong Kong, Turkey and the United Arab Emirates have been increasingly important in funneling critical components to Russia from western countries, according to the research.