Russia faces potential fresh penalties from Berlin and Paris, as both cities announce new sanctions against the country.

Germany and France have taken a significant step in the ongoing EU-Russia sanctions saga, sending a position paper to other EU countries proposing robust new measures against Russia. The proposal, part of the planning process for the 19th package of EU-Russia sanctions, is expected to see a concrete proposal from the EU Commission in the coming days.

The position paper targets Russia's energy sector, specifically oil companies, service providers in the oil industry, and those involved in the export or trading of Russian oil. It also highlights around 250 small and regional banks that are believed to be involved in international transactions to support Russia's war efforts.

The proposed sanctions could extend to more Russian banks, foreign financial institutions connected to the Russian Central Bank's SPFS system, and cryptocurrency service providers in Central Asia. However, the exact names of these entities have not been specified in the paper.

Berlin and Paris aim to close financial and logistical loopholes that Russia has used to circumvent existing sanctions. To achieve this, they propose new import bans or higher tariffs on certain goods and the exclusion of all economic actors providing resources to Russian economic sectors related to the war from the European market.

The plan also includes potential additions to sanctions lists, such as more actors in the automotive industry, civil aviation, gold, machinery, and electrical engineering sectors linked to Russia's military-industrial complex. Furthermore, the proposal suggests targeting third-country companies contributing to sanctions evasion through trade in high-tech materials or resources like wood.

Negotiations are expected to be challenging, especially since some countries like Hungary are critical of any new sanctions. A unanimous decision is required for the implementation of the 19th package of EU-Russia sanctions, and the legal acts would need to be approved by the governments of the member states.

The initiative is part of a broader strategy to close financial and logistical loopholes that Russia has used to circumvent existing sanctions. One notable addition is the suggestion to expand the price cap mechanism on Russian oil to European companies transporting refined products made from Russian crude between third countries.

This move comes as the West continues to impose sanctions on Russia in response to its invasion of Ukraine. The EU has already imposed several rounds of sanctions, targeting individuals, businesses, and sectors in Russia, aimed at isolating the country economically and politically.

Russia faces potential fresh penalties from Berlin and Paris, as both cities announce new sanctions against the country.