Both the EU and the US have included Russian Railways in its sanction list. It is not completely clear what this means for rail freight transactions between Europe and China, but it seems that doing business with the Russian state-owned company will become more complicated. 

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. The EU text reads: “It shall be prohibited to directly or indirectly purchase, sell, provide investment services for or assistance in the issuance of, or otherwise deal with transferable securities and money-market instruments, issued after 12 April 2022, with..”, followed by a detailed description of all those this applies to. On page 135 of the document, it clarifies that this applies to Russian Railways too.

No business with Russian Railways

Such a development is very likely to impact rail freight operations. If European companies cannot work with Russian Railways, this means that New Silk Road transit through Russia is impossible. However, sanctions are a complicated matter, which can often be circumvented. Tomorrow we talk to sanction lawyer Sebastiaan Bennink in a webinar to clarify what this means.

The financial and export sanctions initially imposed on Russia on Friday, 25 February, 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.

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? 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.

You can find the legal documents of the decisions here and here.

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