Transit Crisis: Formal Mistakes and Informal Consequences

The crisis in Russia-West relations amid hostilities in Ukraine was bound to come to the surface in the Baltic region sooner or later. One of the factors that made it inevitable was transport connectivity between the Kaliningrad Region and the rest of Russia. The EU sanctions imposed on Russia in the wake of the special military operation further aggravated the situation. The Russian authorities said Lithuania had banned transit of a wide range of Russian cargoes, which is a high-profile political development. Most likely, the EU will adopt amendments to the sanctions legislation which will allow unhindered transport connectivity. So far, the problem has been under control. However, its aggravation going forward cannot be ruled out, which makes establishing a sea route to connect with the Russian exclave necessary.

Council Decision 2014/512 and Council Regulation 833/2014 may well get amended soon to include clarifications concerning the Kaliningrad transit. If not, cargo transport may become a problem again. These problems will become aggravated as the deadlines for exceptions for coal and oil imports expire and more sanctions are imposed. Regardless of what the EU does next, Russia should brace for any scenario. Reliable and uninterrupted maritime transit of people and cargo to the Kaliningrad Region has become a particularly pressing issue.

The crisis in Russia-West relations amid hostilities in Ukraine was bound to come to the surface in the Baltic region sooner or later. One of the factors that made it inevitable was transport connectivity between the Kaliningrad Region and the rest of Russia. The EU sanctions imposed on Russia in the wake of the special military operation further aggravated the situation. The Russian authorities said Lithuania had banned transit of a wide range of Russian cargoes, which is a high-profile political development. Most likely, the EU will adopt amendments to the sanctions legislation which will allow unhindered transport connectivity. So far, the problem has been under control. However, its aggravation going forward cannot be ruled out, which makes establishing a sea route to connect with the Russian exclave necessary.

Ivan Timofeev:
Closing Loopholes: Outlining the U.S. and EU Sanctions Policy Onward

Looking at the problem from a strictly formal point of view, Lithuania’s move may have had legal grounds. The EU sanctions included in the most recent edition of the EU Council Regulation (EU) No 833/2014“ concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine”list four groups of goods that cannot be imported into the European Union.

First, products made of iron and steel listed in Appendix 17 to the Regulation, including hot-rolled and cold-rolled sheets and strips from unalloyed steel and other alloys, electrical steel sheets, metal-coated sheets, tin products, fittings, railway material, seamless pipes, unalloyed wire, etc. Article 3g of the Regulation prohibits importing and transporting such products.

Second, a group of goods that “generate revenue for the Russian budget” are listed in Appendix 21 to include seafood (crustaceans and fish eggs), alcohol, cement, fertilisers, tyres, lumber and wood products, paper, glass, silver, ships, etc. Article 3i prohibits import and transfer of these products, but introduces certain exceptions for fertilisers under the agreed upon quotas.

Third, the EU introduced a ban on Russian coal imports, but according to Article 3j the restrictions will come into effect on August 10, 2022.

Fourth, Russian imports of petroleum and petroleum products have been prohibited. However, existing contracts can be executed until December 5, 2022 and February 5, 2023, respectively (Article 3m).

With regard to the first two groups of goods, problems with shipping may arise already now, and for the other two they will come soon. However, none of them provides for exceptions related to transit to the Kaliningrad Region, although such exceptions have been introduced under another ban. For example, Article 3l imposes restrictions on Russian transport companies with regard to hauling goods using EU roads, but stipulates exceptions for the Kaliningrad Region.

The joint Russia-EU declaration on transit between the Kaliningrad Region and the rest of the Russian Federation dated November 11, 2002, has failed as a safety net. The declaration focuses on transit of Russian citizens. Cargo is mentioned only tangentially in the context of “the need to address both parties’ concerns in connection with transit of people and goods moving forward.” No further clarifications regarding cargo are provided.

Ivan Timofeev:
The US Confiscation Policy

Moscow saw Lithuania’s move as a provocative and hostile act. It its statement, the Russian Foreign Ministry pressed for resuming transit in full and indicated the possibility of Russia taking action “to protect its national interests.” Notably, this assessment was not fully unfounded. First, Lithuania can be considered one of the most hostile EU countries when it comes to relations with Russia. Moscow has long been accustomed to the fact that various anti-Russian initiatives originate in Vilnius. Therefore, Moscow seeing unfolding developments as a hostile move should hardly surprise anyone. Strictly speaking, Lithuania could have foreseen a political problem and raised the issue about exceptions or at least mechanisms for addressing this issue back when the sanctions regime was being agreed upon. Now, the EU leadership has to do it.

We must give credit to European diplomacy being cautious in its moves. Clearly, Brussels was quick to see the flaws in regulations to restrict Russian imports and the possible political consequences that could include, for example, Moscow’s refusal to recognise Lithuania’s post-Soviet borders, which could hardly entail immediate practical consequences, but the process of revising the European borders is already going at a fairly fast pace. Clearly, the EU is reluctant to speed it up even more.

In addition, creating a hotbed of tensions in the Baltic region amid general security tensions that may lead to a range of unintended and unpredictable consequences is a scenario that neither party wants to see unfold.

Council Decision 2014/512 and Council Regulation 833/2014 may well get amended soon to include clarifications concerning the Kaliningrad transit. If not, cargo transport may become a problem again. These problems will become aggravated as the deadlines for exceptions for coal and oil imports expire and more sanctions are imposed. Regardless of what the EU does next, Russia should brace for any scenario. Reliable and uninterrupted maritime transit of people and cargo to the Kaliningrad Region has become a particularly pressing issue.

First published in the Valdai Discussion Club.