Von der Leyen backs 'bone-crushing' US Senate bill to sanction Russia

Euronews

2 days ago

Ursula von der Leyen has endorsed a new bill rapidly making its way through the US Senate that would impose sweeping sanctions against Russia in a bid to force the Kremlin into serious negotiations for a lasting peace in Ukraine, despite the law having the potential to wreak economic havoc on several countries of the European Union.
The bill, jointly promoted by Lindsey Graham, a Republican from South Carolina, and Richard Blumenthal, a Democrat from Connecticut, has amassed more than 80 signatures in the 100-seat chamber, an impressive amount of bipartisan support that could help convince President Donald Trump to move forward with the plan.
Trump has so far refused to apply further pressure on Moscow, causing dismay among European allies, who have pledged to move forward with restrictions on their own.
After a "good" meeting with Senator Graham on Monday, von der Leyen suggested the draft law work in tandem with the next package of EU sanctions, meant to target Russia's financial sector, the "shadow fleet" and the Nord Stream pipelines.
Brussels also wants to lower the G7 price cap on Russian seaborne oil, which has remained untouched at $60 per barrel since its introduction in late 2022.
The president of the European Commission "made the objective clear: we need a real ceasefire, we need Russia at the negotiating table, and we need to end this war. Pressure works, as the Kremlin understands nothing else," her office said.
"This is why the President welcomed that Senator Graham committed to ramping up pressure on Russia and moving ahead with the bill in (the) Senate next week."
Under the draft law promoted by Graham and Blumenthal, the US would slap a wide range of primary sanctions and duties on Russia, such as broad prohibitions on financial transactions with entities owned or affiliated with the Kremlin.
Most notably, it would also introduce secondary tariffs of "not less" than 500% on any country that "knowingly sells, supplies, transfers, or purchases oil, uranium, natural gas, petroleum products, or petrochemical products that originated in the Russian Federation".
In theory, this provision would hit hard several member states that continue to rely on Moscow for their energy needs.
As of today, France, Spain, Belgium, the Netherlands and Portugal buy Russian liquefied natural gas (LNG); Italy, Greece, Hungary, Slovakia and Bulgaria buy Russian pipeline gas; and Hungary and Slovakia buy Russian pipeline oil.
Additionally, five countries – Bulgaria, the Czech Republic, Hungary, Slovakia and Finland – operate Russian-made nuclear reactors that rely on specific Russian-made fuels.
The bill, however, features a clause that would allow the US president to spare specific countries, goods and services from the 500% tariff through a one-time waiver – as long as doing so is justified for "national security interests".
It was not immediately clear if von der Leyen discussed this exemption during her meeting with Graham. Her positive words following the encounter suggest the Commission chief is confident the bloc will manage to avoid the blowback.
Both Graham and Blumenthal have pointed the finger at China and India as the prime clients of Russian energy and, therefore, the prime targets of the 500% tariffs.
After a joint trip to Kyiv and Paris, the senators hailed new momentum to advance their bill, warning the window to prevent a renewed Russian offensive was closing fast.
"The world has a lot of cards to play against Putin," Graham told the Associated Press. "We're going to hit China and India for propping up his war machine."
Graham called the draft "the most draconian bill I've ever seen in my life in the Senate", while Blumenthal said the proposed sanctions would be "bone-crushing" and place Russia's economy "on a trade island".
Officials in Brussels believe the combination of 500% tariffs with a lower price cap would have a devastating impact on Moscow, as global clients would rush to flee Russian energy and precipitate a plunge in revenue for the federal budget.
Still, the White House has made no indication it is willing to amend the G7 price cap.
"These steps, taken together with US measures, would sharply increase the joint impact of our sanctions," von der Leyen said, according to the read-out. "Combined with actions targeting Russia's shadow fleet limiting Russia's ability to transport its oil, it's an effective measure to dry up the Kremlin's resources to wage the war."
The meeting between von der Leyen and Graham comes as delegations from Ukraine and Russia meet in Istanbul for a new round of face-to-face negotiations.
The Commission's investigation into anti-competitive agreements between Germany's Delivery Hero and Spain's Glovo, two of Europe's largest food delivery companies, has seen the companies slapped with a total fine of €329 million.
The companies were found to have violated EU competition rules by participating in a cartel that manipulated the online ordering and delivery of food, groceries and other daily consumer goods.
This case sets an important precedent, as it's the first time the EU has sanctioned the anti-competitive use of a minority shareholding, highlighting how small stakes in a competing business can be misused to restrict competition.
'Of course, owning a stake in a competitor is not illegal. But it may be problematic when that stake is used to gain inside information and influence decisions in ways that can harm competition,' said the Commission's executive vice president in charge of competition, Teresa Ribera.
It is also the first case of EU antitrust enforcement concerning labour markets, as the Commission found that the cartel between Delivery Hero and Glovo included agreements not to hire or poach each other's employees - practices that, according to the EU executive, reduce job opportunities for workers.
'This investigation shows that competition rules aren't just about keeping prices down,' said Ribera, adding that EU antitrust rules also help ensure 'a fair labour market where employers compete for talent and do not collude to limit the number and quality and opportunities for workers.'
Beginning in July 2018, Delivery Hero acquired a minority share in Glovo, which it gradually increased through further investments. Four years later, in 2022, it gained sole control over Glovo.
In June 2022 and again in November 2023, the Commission carried out unannounced inspections at the companies' premises as part of a self-initiated inquiry into possible collusion in the food delivery sector.
The Commission concluded that from July 2018 to July 2022, Delivery Hero and Glovo progressively dismantled competitive constraints between them and replaced normal market rivalry with layered anti-competitive coordination.
The infringement ended in 2022 when Delivery Hero formally acquired a majority stake in Glovo, making it a subsidiary.
Both companies acknowledged their involvement in the cartel and agreed to settle the case, a procedure introduced in 2008 that allows firms to accept liability and the proposed fines.
In return for cooperating and waiving certain procedural rights, both companies received a standard 10% reduction in their fines: approximately €223 million for Delivery Hero and €106 million for Glovo.
Central to the Commission's findings was Delivery Hero's minority shareholding in Glovo, which enabled and facilitated the unlawful coordination.
According to the investigation, this minority shareholding created a channel through which the two companies coordinated their operations and strategies.
'They exchanged sensitive information beyond what was needed for a corporate investor to protect a financial investment decision,' said the Commission's Ribera.
The information exchanged included commercial strategies, pricing, capacity, costs, product characteristics, and the organisation of rider distribution networks.
'They discussed virtually everything. And of course, this could only lead them to potentially align their content on the market,' said a senior EU official.
The companies also divided geographic markets across Europe: They avoided entering each other's national markets and coordinated market entries where neither was present, effectively eliminating direct competition between them.
Another major element of the infringement was the agreement not to hire or actively approach each other's employees - the so-called 'no-poach' agreements, which are considered a form of purchasing cartel.
'In other words, companies stop directly competing for workers. This is not good for workers, as it is the type of agreement that suppresses wages and reduces labour mobility,' Ribera explained.
Ribera noted that the Commission will pay more attention to the competitive risks posed by minority shareholder agreements.
'I think it is not necessarily bad. On the contrary, it may be very good,' Ribera said about the practice, clarifying that it is reasonable for a shareholder to access relevant information to ensure sound investment decisions.
However, she drew a clear line at the misuse of sensitive information, particularly when such access goes beyond what is necessary for a shareholder and could restrict competition in a given sector.
The Commission, she said, will be vigilant in preventing such behaviour from occurring in other industries.