The European Union agrees to impose the first sanctions on Chinese and Indian companies due to their links to the war with Russia

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The European Union has approved a new package of sanctions against Russia, targeting for the first time Chinese and Indian companies accused of supporting Moscow's war effort.

These measures, which will be the 13th package of sanctions imposed by Brussels in response to Russia's large-scale invasion of Ukraine, target nearly 200 individuals and entities, but do not amount to any comprehensive economic measure targeting vital industrial sectors.

“We must continue to deteriorate [Vladimir] Putin's war machine. . .[and]“Keep the pressure on the Kremlin high,” European Commission President Ursula von der Leyen said in response to the sanctions deal on Wednesday, adding that the measures were also aimed at targeting “Russia’s access to drones.”

EU officials are also discussing another package of sanctions in response to the death of Russian opposition leader Alexei Navalny in a Siberian prison last week. The UK has imposed sanctions on six directors of the prison colony where Navalny died.

The listing of the Chinese and Indian companies comes as the European Union and its G7 partners try to crack down on Russia's use of third countries and transit routes to evade existing restrictions designed to cripple its war economy.

Brussels abandoned its plans to impose sanctions on Chinese companies on the mainland under pressure from member states including Germany, which feared antagonizing Beijing.

But Russia's continued ability to produce large numbers of drones, missiles, tanks and other weapons despite a broad Western trade embargo has put pressure on G7 capitals to step up their anti-evasion efforts.

The measures will target three companies in mainland China and one in India, along with companies in Sri Lanka, Turkey, Thailand, Serbia and Kazakhstan, according to documents seen by the Financial Times.

The companies targeted will be hit by the trade restrictions after they were identified as helping to supply equipment, especially electronics and microchips, that Russia uses to manufacture weapons or other equipment used in its war against Ukraine.

“It is also appropriate to include in that list certain other entities in third countries that indirectly support the Russian military-industrial complex… through trade in such components,” the sanctions proposal said.

The agreement reached by EU ambassadors on Wednesday will allow the measures to be formally approved before the second anniversary of the large-scale invasion of Moscow on February 24. The names of individuals and entities will be published when the sanctions package appears in the EU Legal Journal. .

The new package would bring the total number of individuals and entities on whom the European Union has imposed sanctions in response to Russian aggression against Ukraine to about 2,000 people.

The agreement was reached after Hungary dropped its opposition to this package last week.

EU diplomats also agreed on Wednesday not to renew sanctions against Arkady Voloz, founder of Russian tech giant Yandex, when they expire next month, according to two people familiar with the matter.

The move would make Voloz, who last year condemned Putin's “barbaric” invasion of Ukraine, the first person to be removed from EU sanctions lists after speaking out against the war.

The UK last year removed sanctions on fintech tycoon Oleg Tinkov, the only major Russian businessman to criticize the invasion. The European Union lifted sanctions on a small number of Russian businessmen and their relatives after legal appeals, although none of them spoke out against the war.

Volozh, who moved to Israel after Putin annexed Crimea in 2014 and has not visited Russia since its all-out invasion of Ukraine, was sanctioned in 2022 over what the European Union called Yandex's complicity in the war, prompting him to resign as president. Executive Director and transferred voting rights from his controlling interest to the Board of Directors.

A person familiar with the matter said: “The evidence against him was considered weak, so his name was removed from the list.” The European External Action Service did not respond to a request for comment. Follows did not immediately respond to a request for comment.

Lifting sanctions would allow Voloz to help grow a group of internationally focused technology startups that employ about 1,300 Russians who left the country after the outbreak of war. Yandex's Nasdaq-listed parent has agreed to separate companies as part of a deal to sell its Russian operations.