By journalist Inga Karlinska.
EU-Russia tensions have been elevated since the latter’s annexation of Ukraine’s Crimean Peninsula in 2014 and have gone downhill since Russia’s outright invasion of and war against Ukraine that began in February 2022. The European Union (EU) was quick to respond to the aggression by bolstering Ukraine and rolling out a comprehensive sanctions package, targeting Russia’s lucrative oil and gas trade, and other key export and import products with the hope that economic pressure exercised by the formidable 27-member bloc—as well as a larger group of Western allies that includes the United States—would force Moscow’s hands into retreat.
More than two years into the war, however, fighting has solidified between Western-backed Ukraine and Russian forces, with no immediate end in sight. At the same time, Russian influence has hardly subsided in Europe—moreover, some might argue that certain Russian activities are as steadfast as ever—despite the EU and its partner states’ best efforts to curtail it.
Disinformation has been a weapon in Moscow’s arsenal for waging a long and patient “war” against the West for decades. Elections—both at the EU and member state levels—have been the primary target of online disinformation campaigns conducted by Russia-backed groups, aiming to spread false information to sway public opinion on specific policy issues or against specific political candidates. Such efforts were also apparent in the most recent round of European Parliament elections, prompting a probe in Belgium into campaign financing and the banning of a news website in the Czech Republic on account of a pro-Russia influence operation.
However, Russian disinformation is much more widespread, having expanded to sowing distrust in European governments during the coronavirus pandemic, bolstering far-right and pro-Russia political candidates and their narratives, and, more recently, sensitizing Western public opinion about Russia’s war in Ukraine and, absurdly, pushing arguments for the West’s culpability in the matter. In the context of the Ukraine war, Russia has elevated its information war to a truly global stage.
Russian influence continues to permeate financial markets not only via top-down means such as in the online sphere, run with the help of server farms and fake profiles, but also through bottom-up and harder to detect initiatives of private individuals and businesspeople. Facing European sanctions, a whole cadre of Russian oligarchs and their wealthy families tried and succeeded in hiding their fortunes from authorities. Shortly after the outbreak of the war, Switzerland came into the center of attention for facilitating these efforts by means of the country’s secrecy laws in its corporate and banking sectors.
While eventually even the Swiss government had to sway and impose sanctions on Russia following pressure from the EU, the U.S. and other countries, as well as pledge to make business flowing through the country more transparent, much is left to be desired in terms of tangible policy improvements.
Recent news of a Geneva-based trading company, Paramount Energy and Commodities SA, and its owner, Dutchman Niels Troost, being placed on the sanctions list by the British government for sanctions evasion highlighted concerns about the continued influence of Russian business operating in Europe. Swiss authorities are also investigating Troost’s alleged funneling of sanctioned Russian oil through a UAE-based subsidiary firm, Paramount DMCC, exposed in an in depth Financial Times investigation, run by similarly sanctioned Troost associate François Edouard Mauron, and indeed Troost’s close ties to the Russian elite. The UAE has similarly been on the receiving end of critiques for facilitating such sanctions evasion, with Transparency International calling on the country to put an end to its facilitation of “cross border corruption”, despite having been removed from the FATF laundering list.
Exposes such as Troost’s are few and far between, but the practice of hiding Russian money and evading sanctions is nothing new, and is far from being limited to Switzerland. Indeed, the EU’s own legislations are rather weak in addressing these issues effectively. The EU branch of Transparency International recently drew attention to the problem of how facilitator of sanctions circumvention falls outside of the scope of EU legislation. As the report confirmed, “those wishing to hide the real people behind companies can easily use secrecy jurisdictions and a myriad of services offered by professional enablers to evade probes.”
As long as the Russian elite can survive the consequences of their government’s actions and the use of their sanctioned money unscathed, and, more importantly, live and conduct business in Europe despite the EU’s status as the foremost advocate of standing up to Russia in Ukraine, the EU’s sanctions regime, however detrimental to the Russian economy as a whole, will fall short of reaching the people capable of placing pressure on the highest circles of Russian policymaking.
EU decisionmakers—as their counterparts in allied countries—should do ramp up efforts to root out Russian influence in Europe. This has multiple manifestations that reach beyond the most direct means of military aggression and stretch into the opaque worlds of online disinformation and clandestine business operations. Avoiding the expansion of the war and negotiating a ceasefire are of the utmost importance, but at the same time, European leaders should embrace the reality that the continent is embroiled in a new Cold War, where bolder policies are required.