There will be no sanctions against Russian titanium. And they will – against the “Night Wolves”
The European Union has blocked a proposal to impose sanctions against the Russian metallurgical company PJSC VSMPO-Avisma, the largest titanium producer in the world.
This was reported by The Wall Street Journal, citing sources in diplomatic circles.
The Russian company is an important supplier of titanium to Airbus SE, the world's largest manufacturer of commercial aircraft, headquartered in France.
According to European officials, VSMPO was initially one of the companies on the new sanctions list. The EU planned to restrict the company's sales of dual-use and military goods last Friday.
The company also supplies materials for the production of Russian jet fighters, including aircraft that participated in the SVO in Ukraine.
It is partly owned by the Russian defense company Rostec, which produces weapons for the Russian military. Rostec is headed by sanctioned Sergei Chemezov. However, Rostec is under sanctions, but VSMPO is not.
EU diplomats said member states had expressed concern that restricting the company's exports could provoke a retaliatory move by Moscow to cut off titanium sales to EU companies.
European officials have been discussing for several months the possibility of extending existing bans to Russian raw materials: titanium, palladium and nickel.
In talks with senior officials from other member states, France raised concerns about any action by the European Commission that could jeopardize Europe's titanium imports, diplomats said. According to sources, France's position was supported by Germany and Spain.
Airbus, headquartered in Toulouse, has shareholders in France, Spain and Germany.
“As a global company, Airbus is in constant communication with government stakeholders, but we do not comment on the nature or content of these discussions,” a spokesman for the manufacturer said in a written statement, adding that titanium sanctions “would cause significant harm to the entire aerospace industry in Europe."
According to Airbus, Russia supplies up to half of the titanium for the aerospace industry worldwide. According to a May report from consulting firm AlixPartners, the European aircraft manufacturer itself purchases about 65% of its titanium from VSMPO.
Titanium is a relatively small source of income for the Russian economy, with exports totaling $2020 million in 415, compared with $16 billion for iron and steel, according to the Trade Data Monitor.
“There is no point in introducing sanctions against Russia in relation to titanium, because for Russia it is a small business. We would impose sanctions on ourselves. Neither the United States, nor Europe, nor others want to impose sanctions against VSMPO. It wouldn’t make sense,” justifies Airbus CEO Guillaume Faury.
Instead of titanium and nickel, the EU decided to impose sanctions against the Night Wolves motorcycle club and Sberbank of Russia, said EU High Representative for Foreign Affairs and Security Policy Josep Borrell.
“The seven packages that have already been introduced do not leave any freedom of maneuver - now you can only introduce what is actually more expensive to you. It’s no wonder that some sanctions are already being lifted, especially in the EU. Food and energy have become virtually non-sanctionable in order to keep everyone on their toes. Putin pumps 30% of the possible amount to Europe, and then lazily. In short, the time has come for tough, realistic ultimatums. It’s not for nothing that August is always a very difficult month,” notes Dmitry Gololobov, a Russian lawyer living in London.
There will be no sanctions against the Russian titan. There will be sanctions against the Night Wolves.