Germany holds up passage of new EU sanctions package on Russia

By Julia Payne

BRUSSELS (Reuters) - EU countries failed to agree on a 14th package of sanctions on Russia as Germany remained a blocking force despite the scrapping of a clause that Berlin found problematic, EU diplomats said on Wednesday.

Officials from the 27 EU countries have been debating the package for over a month. The new measures include a ban on Russian LNG trans-shipments and a plan to make EU operators responsible for sanctions violations by subsidiaries and partners in third countries.

Germany's hesitation was due in part to an internal disagreement between its foreign ministry and the chancellor's office, diplomats and a source familiar with the matter said.

The removed clause was an expansion of the so-called "No Russia clause" to subsidiary companies in third countries. The clause under article 12G was removed in a compromise text circulated to member states shortly before ambassadors met late on Wednesday afternoon, they said.

The clause would have forced these subsidiaries to "contractually prohibit re-exportation to Russia and re-exportation for use in Russia", a draft of an earlier version of the package showed.

The EU has been continually ramping up sanctions on Moscow for its 2022 invasion of Ukraine but its efforts are being undermined by circumvention via third countries. The inclusion of this clause would have further tightened the bloc's measures.

Ambassadors will continue the debate on Thursday, they said.

(Reporting by Julia Payne, additional reporting by Alexander Ratz in Berlin and Jan Strupczewski in Brussels; Editing by Kirsten Donovan)

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