EU countries differ in how they implement trade sanctions against Russia, thus reducing their overall impact, according to a new report on Tuesday by the European Court of Auditors (ECA).
Legal ambiguities in the sanctions’ framework and inconsistent enforcement by national custom authorities create real risks of circumvention and make them less effective. Member states also make uneven use of information-sharing systems, and the European Commission does not sufficiently monitor how sanctions are implemented and what they achieve.
“EU trade sanctions will deliver their intended impact if all member states apply them in a uniform and coordinated way,” said Mihails Kozlovs, the Latvian ECA Member leading the audit, when presenting the report at a virtual press briefing (10 November).
Since Russia launched its Russia’s war of aggression against Ukraine in February 2022, the EU has successively imposed 21 sanctions packages on Russia in order to undermine its war effort by restricting trade in strategic goods. The sanctions target also circumvention by third countries that are supporting the war, such as Belarus and Iran.
At next European Council on 26–27 November, the Commission will present its 22nd package of sanctions against Russia.
This makes the audit one of the most topical, important and critical audits the EU financial wathdog has ever carried out given the scale of the sanctions and their central role in the EU's response to Russia’s war. While the sanctions have disrupted its supply chains, they have so far been insufficient to compel Russia to halt it relentless war and engage in earnest in negotiations on a peace agreement.
The audit assessed if the Commission with its different directorates-general had been effective in supporting and monitoring the implementation of EU trade sanctions against Russia by the Member States. The audit scope did not include and political decisions taken by the Council and the preparatory work of the European External Action Service (EEAS). Nor did the scope include energy products.
The audit work covered the period from February 2022 until the end of 2025. While the main subject of the audit was the Commission, it focused on the implementation of the sanctions on the ground as the responsibility for implementing them rests with the Member States.
The audit team carried out information visits in five Member States (Bulgaria, Germany, Latvia, the Netherlands, and Poland) and a fact-finding visit to the UK.
Reduction in trade
On a positive note, sanctions and anti-circumvention measures have significantly reduced EU trade with Russia, and curtailed direct exports of critical military goods. Total trade with Russia has fallen by more than 75% since before the war. In 2025, the EU accounted for some 10 % of Russia’s trade in goods (imports and exports), worth €58 billion, compared with €253 billion in 2021.
Russia has weathered the sanctions by increasing trade with non-sanctioned third countries, for example China and India. It has also managed to circumvent them despite the diplomatic efforts of the special EU envoy against circumvention. However, the import of dual-use products from non-EU countries has resulted in higher costs for Russia.
As regards the sanctions envoy’s tools, ECA noted that they are diplomatic in nature. The envoy is bound by a limited mandate and cannot offer any financial incentives to the countries he visits.
Anonymous reporting of potential violations of EU sanctions through whistleblowing does not appear to have been effective. The Commission passed only 10 % of the 2 600 reports from whistleblowers to national competent authorities or the EEAS for further follow-up. Member States are not obliged to report back on enforcement actions based on the whistleblower tool.
A Commission analysis of external data showed that EU parts are still being found in recently manufactured Russian missiles and drones used in the war against Ukraine. Statistics show a correlation in the increase in trade in selected high-priority goods between the EU and selected non-EU countries, such as Armenia, Kazakhstan, and Turkey, and between those countries and Russia/Belarus.
Forum shopping and false backfilling
The audit team found that circumvention takes place in two forms: forum shopping and false backfilling, Experts in EU-Russia trade relations and customs confirmed the validity of the audit findings.
In forum shopping, EU companies choose customs points in Member States with less stringent controls. The visits to the sample of Member States revealed differences in their customs controls. In the Baltic countries, customs authorities require more documentation for allowing the exit of sanctioned goods than others. The opposite was the case in Italy and Bulgaria.
In false backfilling, the banned goods are produced by a subsidiary of an EU company in a third country. According to research data from the Kyiv School of Economics, 44 % of goods exported to Russia from non-sanctioning countries were originally produced by subsidiaries of Western companies, including companies from the EU.
Was it possible to estimate how much of all trade with Russia which was included in the sanctions should have been reduced if they had been effectively implemented?
“In principle the whole trade with Russia is subject to sanctions, besides humanitarian exceptions and cases where the EU does not want to impose sanctions for economic reasons,“ Mihails Kozlovs told The Brussels Times.”
“Our audit did not look into the scope of sanctions, neither could we establish – based on available data – how would be the impact would have been if sanctions were fully and consistently implemented. We ask though the Commission to strengthen its own monitoring and impact assessment and such questions, even if methodologically challenging, could be part of it.”
The report noted that a flexible approach to designing sanctions can make it easier for member states to agree to them, increasing the risk for loopholes. Do you consider the export of alumina from a plant in Ireland as a loophole in the sanctions?
“The scope of sanctions is a political decision taken by the Council and we did not assess the rationality or justification for sanctions applicable to specific goods or their groups,” he replied.
The audit team noted in the report that the sanctions proposals prepared by the Commission are informed by monitoring activities and the results of impact assessments. The proposals are subsequently subject to close political scrutiny by the Council, which considers multiple economic and non-economic factors. However, this was outside the audit scope.
In this audit, ECA examined the Commission’s management of the trade sanctions and could not audit directly the national custom offices. This resulted in an accountability gap and “blind spot” in the audit.
ECA sometimes carries out parallel audits with the state audit offices in the Member States. Could you have engaged them in the audit to examine enforcement failures and estimate the extent and costs of circumvention and loopholes?
“We could have done it and it would have complemented our own audit,” Mihails Kozlovs admitted,” “but it would also have taken more time.”
A parallel audit does not necessarily have to include all national audit offices. A critical report from a country’s own independent supreme audit institution (SAI) is likely to put more pressure on the government.
The issue of cooperation with the state audit offices was also raised last year in an interview with ECA President Tony Murphy. “We do carry out parallel audits,” he commented, “but there are differences in legal frameworks, audit methodologies, and priorities as well as resource constraints from all parties that can limit the extent of cooperation.”
Did you assess the impact of successive sanction packages vs more comprehensive sanction packages from the very beginning?
“No, this would be a hypothetical exercise, which did not fit the scope of our audit. The audit focused on effective implementation of sanctions, within their scope decided by the Council.”
“With regard to the evolution of sanctions, we noted that the analytical work done by the Commission supported the design of subsequent packages of sanctions in order to align them not only with the evolution of foreign policy goals but also circumvention efforts and issues with enforcement.”
The Commission recently announced the establishment of a dedicated internal sanctions office. Will it address your concerns and recommendations?
“The creation of the office was announced after the approval of the report and, therefore, was not reflected in it,” Mihails Kozlovs replied.
“We don’t know any further details about the mandate of the office but see it as a positive step. Depending on the operational arrangements and the scope of actual work done, this could contribute to implementing some of our recommendations. We’ll do a comprehensive follow-up of the implementation of the recommendations in three years’ time.”
Another broader reform, presented in the Commission’s legislative package in May 2023, aims at improving the functioning of the Customs Union, including more effective controls on EU trade sanctions, through the creation of an EU Customs Authority. Some new measures are scheduled to start late 2027 but the full implementation of the customs reform is envisaged for 2034.
In their joint reply to the audit report, the Commission and EEAS welcomed the positive findings but remarked that many of the findings were based on the premise that the implementation of trade sanctions relies on customs tools. According to them, this resulted in an emphasis on customs while the scope of sanctions is broader and adopted as part of EU’s Common Foreign and Security Policy.
That said, they accepted some of the recommendations fully or partially, with implementation deadlines in 2027. By then the war has raged on for five years when effective implementation of the sanctions mattered most. On the other hand, if a ceasefire is reached next year, more effective implementation could ensure that Russia cannot build up its military stockpile.
The Commission did not accept the recommendation to propose criteria for assessing the effectiveness of EU trade sanctions and carry out regular assessments based on those criteria. While it already carries out regular technical assessment, it pointed out that the decision on a review of the overall effectiveness of sanctions lies with the Council and Member States rather than itself.
