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MP: Only a complete embargo will stop trade with Russia

MP Marko Mihkelson (Reform).
MP Marko Mihkelson (Reform). Source: Ken Mürk/ERR

Trade with Russia will not end until Western countries jointly agree on sanctions and impose a complete trade embargo, Chairman of the Riigikogu's Foreign Affairs Committee Marko Mihkelson (Reform) said on Thursday after it was revealed Estonian firms are still doing business in Russia.

The articles, published by Eesti Ekspress, detail how several companies and sectors have increased their growth during the full-scale invasion. One area is medicine, which is not under direct sanctions but supports Russia's economy and war effort.

"I think this is a wider problem – not just a problem in Estonia. We can see from the European Union how, in many countries, the numbers are either stable or have increased," Mihkelson said.

The MP said there are also big problems with areas under sanction, such as technology used in the military.

"The Ukrainians have proved that the missiles they [Russia] produced last year still contained microchips and technology from Western companies. Unfortunately, this shows that there are huge gaps not only in conventional trade, but also in the sanctioned trade sectors. If there is not a full trade embargo, gaps will be found one way or another," Mihkelson said.

The chairman said companies that continue to trade products that are either directly or indirectly under sanctions must face strong moral judgment.

"Many Western companies have left Russia, but there are a number that have not. Recently, Apple paid a fine of more than $10 million to the Russian government. The picture is certainly more varied in that respect. I haven't had time to read in detail all the stories that have come out recently about the East, but it's very good to put this information in front of the reader, but you also have to understand the wider context," said Mihkelson.

Estonian-Russian border on November 18, 2023. Source: Dmitri Fedotkin/ERR

"Today's world is not only influenced by the will of the West. There has been a huge increase in trade between China and Russia, through Turkey or Central Asia. Sanctions are being bypassed and ways are being found to continue trading. It is difficult even to agree on new sanctions at the EU level because some countries, such as Hungary, do not agree to tougher sanctions," he said.

"If it is not a question of sanctioned trade, then there is nothing but this kind of moral looking in the mirror. The Operail case is a very good example – if our neighbors do not come on board, we are the losers rather than Russia. Wisdom in implementing this policy is very much needed so that we do not shoot ourselves in the foot," the MP said.

Mihkelson said Estonia's task is to achieve this type of agreement at the EU level and in cooperation with the United States. Then it would be possible to create sanctions that have a real impact.

"The Financial Times reported that last year was the most profitable period for Russian banks. This shows that the sanctions that have been imposed so far are not having the effect of making Russia's war against Ukraine more expensive or preventing them from producing missiles," he said.

The politician said international attention is also being paid to transferring Russian frozen assets to Ukraine. "There is certainly progress to be seen here. There is already talk of sending money earned as interest to Ukraine," said Mihkelson.

"All of this will work more effectively, in a way that will influence Russia more effectively, if we can act at the European Union level together with the United States. Russia, of course, is skilfully trying to influence the West through its closest countries of influence like Hungary. Since imposing sanctions is based on consensus, it is clear that we cannot get tougher because Hungary is opposed to it," Mihkelson said.

Reinsalu: Agreement needed between eastern flank countries

Isamaa chair Urmas Reinsalu. Source: Priit Mürk/ERR

Former foreign minister Urmas Reinsalu said: "It makes sense for Estonia to try to reach an agreement with the Eastern border countries on restricting Russian trade. Specifically on national sanctions. This concerns the Baltic States, Finland, and Poland."

"It is my fundamental view that Western countries should impose an embargo on Russia," the chairman of the opposition party Isamaa said.

"I think Isamaa will propose to Parliament to set up a committee of inquiry into this [Russia-related] transit and business," he added.

The MP said it is unacceptable if the Estonian state supports companies that continue doing business with Russia with funds from the state or the European Union. 

"I think this is a very fundamental question of values. Here, the state can impose additional rules," Reinsalu said.

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Editor: Helen Wright

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