The European Commission on Friday proposed that imports of Russian gold be included in a new package of sanctions aimed at crippling the Russian economy.
The EU executive would not consider the new proposed restrictions as a seventh round of sanctions— which many member states have already come out against — but rather a "maintenance and alignment" package.
It would, however, introduce a new embargo — this time on Russian gold.
The precious metal constitutes Russia's top export after energy and was worth more €18.5 billion in 2020.
According to The Observatory of Economic Complexity, which collates international trade data, the vast majority of Russia's gold went to the UK that year with the remaining €2 billion worth split between Switzerland, Kazakhstan, Turkey and India.
For the EU, the rationale behind the gold embargo is that it wants to align itself with its main international partners as pledged during last month's G7 meeting in Germany. The US, UK and Japan have already imposed such a sanction.
It should also inflict significant damage on the Russian elite and economy as the precious metal became a safe haven in recent months with oligarchs buying gold bullions in an attempt to soften the impact of Western sanctions on Russia.
Making the sanctions work better
The rest of the proposed package aims to close loopholes and strengthen compliance with the sixth round of sanctions already imposed against Moscow since it launched its war in Ukraine on 24 February.
These have targeted the export to Russia of cutting-edge technology, especially if it can also be used by the military, certain types of machinery and transportation equipment, as well as imports into the EU of Russian coal and other solid fossil fuels, steel and iron, wood, cement, crude oil and refined petroleum products.
All these goods are also forbidden from transiting through the EU.
Major Russian banks have also been targeted and were disconnected from the international SWIFT system, making it impossible for them to receive foreign currencies. The foreign reserves of the Russian National Bank have meanwhile been frozen as have the foreign assets of hundreds of oligarchs and high-ranking Russian officials.
The new package will also strengthen "reporting requirements to tighten EU asset freezes", extend the list of sanctioned individuals and entities, and clarify "the exact scope of some financial and economic sanctions," the Commission said, in a bid to provide clearer guidance to third countries on what the bloc has targeted.
Russia has, for instance, laid the blame for soaring food prices on Western sanctions which the EU and its partners categorically refuse, stressing their measures do not prevent the trade in agricultural products between third countries and Russia.
A decision next week
"We are proposing today to tighten our hard-hitting EU sanctions against the Kremlin, enforce them more effectively and extend them until January 2023. Moscow must continue to pay a high price for its aggression," Commission President Ursula von der Leyen said in a statement.
Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy, said meanwhile that with these new restrictions, "we continue to target those close to Putin and the Kremlin."
"Today's package reflects our coordinated approach with international partners including the G7. In addition to these measures, I will also present proposals to Council for the listing of more individuals and entities, with their assets frozen and ability to travel curtailed," he added.
Member states now need to unanimously approve the Commission's package.
A senior EU diplomat told reporters on Friday afternoon that no decision on sanctions should be made on Monday during a meeting of EU Foreign Affairs ministers.
It could however be approved at a meeting of EU ambassadors on Wednesday.