Ambassadors from EU countries discussed the French-Dutch proposal on Wednesday as part of the 14th package of sanctions against Russia that the EU is currently preparing. This package is expected to be finalized at a June EU summit of heads of government.
According to the proposal, anyone within the EU could be prohibited from conducting business with any financial institution worldwide that is identified by the EU as directly or indirectly assisting the Russian military.
Such a prohibition could serve as a strong incentive for financial institutions in the Middle East, Iran, Turkey, or even China to avoid making deals involving the supply of EU-sanctioned dual-use goods to Russia, as they could lose access to European businesses and the EU financial markets.
EU officials stated that the European Commission would likely coordinate such sanctions against financial institutions with the United States, thereby enhancing the measure's effectiveness.
Hungary, which despite Russia's war against Ukraine still maintains close ties with Moscow, might oppose the proposal, as could Germany, which does not want to jeopardize its close business relations with China. The European Commission said last month that there were signs Beijing was supplying parts to Russia that could be used to manufacture weapons.