A European Commission (EC) proposal to impose further import bans in Europe on a range of Russian products—from diamonds to aluminum wire—has received a mixed welcome as there are some that agree with the concept but not how it would be carried out. That includes an official from one of Ukraine’s leading cable manufacturers.
“I do support the ban on all wire rod from Russia, and I do support other international restrictions and sanctions over Russian trade, but the problem is that the sanctions have lots of holes,” said Oleg Procopovich, deputy CEO of Odeskabel PJSC. The company, which is based in Odessa, Ukraine, manufactures telecom cables, exporting about a third of its production to Europe.
Procopovich told WJI that before the war started, his company used a lot of aluminum made by a Russian company, Rusal, which is one of the world’s largest aluminum producers. That ended almost immediately after the invasion on Feb. 24, 2022. The problem with the proposed sanctions is the “gray market,” because the channels for international trade for Russia or Iran remain open, he said. “It is not only the phenomena of unfair businesses, in our world of global trade, it is the policy of certain countries that have chosen to benefit from the war through such trading. So, shadow companies supply copper and aluminum that come from diluted origins, squeezing honest manufacturers. Unless that changes, the proposed ban will not have the desired impact for Russia.”
That same sentiment was seen in the essence of a press release from European Aluminum, a Belgium-based association that represents the entire European aluminum value chain. It said that it welcomed the EC’s proposed 12th package of sanctions against Russia, which includes a ban on the importation of certain aluminum products that include wire, tubes and pipes, as well as aluminum foil. It said that future sanctions must be accompanied “by strong anti-circumvention measures to ensure an effective mechanism to prevent the circumvention of sanctions through imports of (semi-) final aluminum products from third countries.”
The association also targeted the effect of the proposed ban list, which it notes only covers 12% of EU imports of aluminum products from Russia. “These sanctions are a small first step, but we strongly encourage the European Union to accelerate its efforts and broaden their scope to cover all major product categories, including ingots, slabs, and billets, which constitute over 85% of the EU’s imports from Russia,” notes Paul Voss, Director General of European Aluminum. “The European aluminum industry has already started phasing out Russian aluminum and is willing to accelerate the process. It is a matter of principle and strategic foresight—it’s simply the right thing to do in the current circumstances.”