Europe seeks to underpin Russia sanctions, fearing Trump overhaul

By Julia Payne and John O'Donnell

BRUSSELS (Reuters) - European diplomats are preparing to underpin sanctions on Russia anticipating that a return of former U.S. president Donald Trump could undermine Western efforts to isolate Moscow, sources with knowledge of the discussions told Reuters.

The talks among EU officials and envoys are centred on several initiatives to ensure that European sanctions would remain in place longer term, bolstering them through tighter enforcement, even if Washington changes tack.

The possible steps include "catch-all" clauses to identify and stop suspect goods shipments destined for Russia and wider oil shipping curbs, the people said.

There are also discussions about changing a requirement that a freeze on Russian central bank assets, the biggest single Western sanction on Moscow, must be renewed by European capitals every six months, the sources, who asked not to be named due to the sensitivity of the matter, said.

A few member states are working on the idea of a "catch-all" clause applied either to battlefield goods or across a larger spectrum of banned exports, three EU diplomats said.

The clause would allow customs officials to hold up shipments if the destination seemed illogical, such as crossing Russia to reach central Asian countries.

The preparations are being made, in anticipation of a change in Washington's position, should Trump be reelected.

Any softening by Washington would leave Europe in a difficult position, as it is the United States, with sweeping powers to punish sanctions busting globally, that primarily enforces the rules.

The European Union is now trying to find means of its own to bolster enforcement and reinforce its curbs on Russia.

Tom Keatinge, of think tank the Royal United Services Institute, said European policy makers had been preparing "autonomous European sanctions considering the possibility of a Trump presidency" but would have to bolster enforcement.

"Should a Trump presidency reverse U.S. sanctions on Russia, Europeans will need to be much more muscular in ... enforcement action and will no longer be able to hide behind Uncle Sam," he said.

A spokesperson for the Trump campaign said that President Joe Biden's "weak agenda ... has emboldened our adversaries, led to war in Ukraine", criticising Democratic presidential candidate Kamala Harris as "dangerously liberal", without outlining his position on sanctions.

European countries were wrongfooted during Trump's last presidency, when the United States reversed an international deal with Iran over its nuclear programme and unilaterally reinstated sanctions, leaving Europe out on a limb.

Now European officials fear a similar about-face on Russia could unravel Western efforts to isolate Moscow, two of the people said.

Trump has strongly implied on the campaign trail that he would stop or dramatically slow military aid to Ukraine if he wins the Nov. 5 election.

He has refused to say that he wants Ukraine to win the war, and he has gone as far as to blame Ukrainian President Volodymyr Zelenskiy for helping start the conflict.

Trump has frequently praised his own 2017-2021 administration for placing sanctions on the Nord Stream II pipeline, but has not made his position on future sanctions clear, and he has said he wants to make a quick peace deal with Moscow.

WIDER SWEEP

European diplomats will wait until the year-end before discussing new restrictions in earnest ahead of Poland's takeover of the six-month rotating EU presidency.

Hungary currently holds the presidency and has dragged its feet on sanctions. Hungarian Prime Minister Viktor Orban sparked a storm of criticism for meeting Russian President Vladimir Putin in Moscow, portrayed by Budapest as a "peace mission".

The overhaul could also do away with the need to regularly reaffirm a freeze on Russian central bank assets, replacing six monthly intervals with one of 36 months, underpinning this sanction for the long term.

Assets held by the group of seven (G7) major economies amount to some $300 billion, with most of that held in Europe.

Several countries are also discussing a clampdown on the "mislabelling" of products destined for Russia, seeking more precise descriptions. The Baltic states that border Russia have long complained that exporters exploit EU customs codes.

EU member states are having preliminary discussions on the shape of a 15th package of sanctions after months of standstill since Budapest took the helm July 1.

At least 45 ships are expected to be added to the EU sanctions list as the Western allies seek to strengthen the G7 Russian oil price cap, one source said. Western sanctions officials believe targeting specific tankers is the best way to hit more Russian oil revenues.

Western powers are also starting to put pressure on the countries in which the tankers are registered, sources said.

The EU also wants to expand the use of the "No Russia clause" in the next round of sanctions.

That would oblige subsidiaries of EU companies in third countries to prohibit the re-export of certain goods to Russia, including those with a dual-use for military purposes, as well as ammunition and firearms.

Several countries as well as the European Commission aim to further restrict Europe's other energy imports from Russia, including liquid natural gas (LNG) imports, which have increased in recent months.

Belgium, France and others have asked the Commission to propose ways to increase tracking of Russian LNG to the bloc.

(Reporting by Julia Payne and John O'Donnell; Additional reporting by Gram Slattery in Washington; Editing by Sharon Singleton)