Thread by @maria_shagina

The European Commission has published a new strategy that aims to build and reinforce its "open strategic autonomy". What does it mean for EU sanctions? A thread🧵
ec.europa.eu/finance/docs/p…

What is an "open strategic autonomy"? The Commission defines it as an ability "to promote and defend rules-based multilateralism and develop beneficial bilateral relationships, while protecting itself from unfair and abusive practices." /1

Why is there a need for open strategic autonomy now? The reason lies in a major shift in geopolitics, particularly in the technological sphere. The coronavirus crisis has added to the urgency of strengthening the EU's economic and financial system. /2

What does the Commission propose to strengthen its resilience?
1) to foster the international role of the euro;
2) to strengthen the EU's financial market infrastructures
3) to improve the implementation and enforcement of EU's sanctions' mechanisms
All three are interrelated /3

Slow imposition and inconsistent enforcement of EU sanctions often undermined their efficacy, allowing companies to circumvent prohibitions (like in the case of Crimea below). The frustration with the not-so-agile policy has been palpable. /4
atlanticcouncil.org/blogs/ukrainea…

Although the EU failed to introduce QMV in the decision-making on sanctions, the new strategy sets out wide ranging ideas for a more robust & rapid implementation and enforcement of EU sanctions. The Com is to get a more active role in the design & implementation of sanctions: /5

➡️Better coordination and exchange of information: the Sanctions Information Exchange Repository will be developed in 2021 to ensure prompt reporting and exchange of info btw MS and the Com on implementation and enforcement; /6

- a single contact point will be established for certain cross-border sanctions-related matters. Currently the lack of coordination leads to loopholes in the EU sanctions regimes (e.g. dual-use items), triggering "forum shopping" among private firms and humanitarian operators. /7

➡️Steps towards harmonized enforcement: a dedicated tool will be created to allow for the anonymous reporting of sanctions' evasion, incl. whistleblowing. The Com will draw up a roadmap for moving from detection of systematic non-compliance with sanctions to action before CJEU /8

➡️Countering extraterritoriality: regular dialogue and coordination with third partners, in particular within G7, will be sought; amendments to the Blocking Statute and its more active application to defend EU individuals and entities. /9

Stronger euro and EU's financial market infrastructures serve to build the resilience against third-party (read US) extraterritorial sanctions. The Com will seek to foster the use of the euro in commodity and energy markets, incl. hydrogen. /10

Per EU calculations, "the share of natural gas contracts signed in euros increased from 38% in 2018 to 64% in 2020". Since 2014, Russian energy companies have been active in trying to switch to the euro in their contracts and avoid the US nexus. /11

In terms of financial market infrastructures, the Com plans to reduce over-reliance on non-EU banking, clearing houses and foreign currencies. The effectiveness of instruments such as INSTEX will be improved. /end