The EU has banned European companies from doing business with the Russian Railways. Simultaneously, the US has also included the state-owned railway company in its sanction list in an attempt to restrict them from raising capital from the US market. 

The sanctions imposed on Russian people and companies are fluid, and the relevant lists are frequently updated, mentions the website of the European Council. The same applies to the US Treasury, which is responsible for the sanctions from the US side. In one of the latest updates, both institutions included Russian Railways in their sanctioned companies list. The sanctions imposed are financial. However, they seem able to impact rail freight operations directly.

No business with Russian Railways

EU’s message is clear regarding Russian Railways since it banned all European companies from doing business with them. Understandably, such a development will impact rail freight operations. If European companies cannot work with Russian Railways, this means that New Silk Road transit through Russia is impossible.

The financial and export sanctions initially imposed on Russia on Friday, 25 February, hindered operations with Russia. In practice, they meant that European companies could face issues with money transactions when doing business in Russia and that trains could not stop in Russian territory. However, they left an open window for transit through the country on the way to China.

With the ban on business with Russian Railways, this is not possible anymore. European shippers, freight forwarders and logistics companies will not be able to have any transactions with the railway company nor use its assets and equipment.

What does this mean for the New Silk Road?

With companies unable to work with Russian Railways, and with sanctions also imposed on Belarus, the last remaining European gateway to the New Silk Road, what is the future of Eurasian rail freight transport?

What is known so far is that all these sanctions will be in place until 15 March 2022, and depending on the situation, they will be reviewed, as they are reviewed constantly according to the latest developments.

To better understand the sanctions imposed on Russia and how they will affect the New Silk Road, you can attend the webinar organised by RailFreight.com and Nieuwsblad Transport on Tuesday, 1 March.

In the webinar, we will try to answer questions relevant to whether and how it is still possible to do business in Russia. You can register for this webinar free of charge on this website.

Also read:

• Webinar: the impact of Russia sanctions on the New Silk Road
• EU imposes sanctions on Russia, what do they mean for rail freight?
• EU sanctions on Belarus, more sanctions on Russia