{"id":120945,"date":"2023-11-09T12:30:22","date_gmt":"2023-11-09T12:30:22","guid":{"rendered":"https:\/\/yourclomid.com\/?p=120945"},"modified":"2023-11-09T12:30:22","modified_gmt":"2023-11-09T12:30:22","slug":"putin-made-millions-to-pour-into-ukraine-war-thanks-to-eu-sanctions-loophole","status":"publish","type":"post","link":"https:\/\/yourclomid.com\/world-news\/putin-made-millions-to-pour-into-ukraine-war-thanks-to-eu-sanctions-loophole\/","title":{"rendered":"Putin ‘made millions’ to pour into Ukraine war thanks to EU sanctions loophole"},"content":{"rendered":"

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A loophole in Russian sanctions enforced by the European Union has allowed the Kremlin to earn an extra \u00a3870million (\u20ac1billion) in direct tax revenues for its war effort against Ukraine, it has been claimed.<\/p>\n

And Moscow did so with the help of an EU-member state, Bulgaria, which may have reportedly allowed millions of barrels of Russian oil to reach the Neftohim Burgas local refinery owned by Lukoil.<\/p>\n

From this infrastructure, the refined fuels were then exported to various countries including other EU members, according to an investigation by NGO Global Witness, the think tanks Center for the Study of Democracy (CSD) and the Centre for Research on Energy and Clean Air (CREA) as well as independent reporting by Politico.<\/p>\n

Since February 5, this loophole generated almost \u00a3434m (\u20ac500m) for the refinery’s owner, according to a classified analysis prepared for Bulgaria\u2019s parliament and seen by Politico news outlet. Lukoil is the second-largest company in Russia and the country’s largest non-state enterprise in terms of revenue.<\/p>\n

The reported loophole could be exploited as Bulgaria was given a “special derogation” from the ban on seaborne imports of Russian crude amid its enforcement in 2022.<\/p>\n

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This exemption was initially meant to last until the end of 2024, although last month Bulgaria agreed to end its opt-out in October next year, and was conceded due to Bulgaria’s “geographical exposure”, with the nation relying heavily on Lukoil’s refinery.<\/p>\n

Located in Burgas, on the Black Sea coast, the refinery provides 80 percent of Bulgaria’s diesel and gasoline needs and accounts for a 10th of the Balkan nation’s economic output, Politico wrote.<\/p>\n

Following the concession to Bulgaria, the European Commission was forced earlier this year to ban the country from selling Russian-origin oil products to the bloc after the government in Sofia had implied it would continue to do so. As a consequence, from February 5, Bulgaria can no longer sell oil products abroad.<\/p>\n

However, Sofia can authorise exports if these products are for “exclusive use” in Ukraine or they “cannot be stored in Bulgaria due to environmental and safety risks” as long as their “sale, supply, transfer or export is not meant to circumvent” sanctions.<\/p>\n

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Between March and July 2023 alone, Bulgaria may have exported by sea almost three million barrels of Russian-origin oil products equivalent to roughly one in five barrels of crude oil arriving at Burgas and then processed by the refinery, Politico wrote citing an analysis of shipping data shows from the Kpler market intelligence firm.<\/p>\n

Both Bulgaria and Lukoil have claimed to have complied with EU sanctions.<\/p>\n

In a statement, Lukoil told the US news outlet it “complies with all EU and Bulgarian laws” while arguing “compliance with [derogation-related oil] quotas is also under the strict control by the Customs authorities of Bulgaria”.<\/p>\n

Bulgarian Finance Minister Asen Vasilev said the refinery only had a storage capacity worth 10 days, adding the sanctions exemption would help raise millions in taxes for his government.<\/p>\n