Four days in February: sanctions, SWIFT and the first weapons the Union has paid for

Russian forces attacked Ukraine on 24 February 2022. The European Council met in special session that evening and "condemns in the strongest possible terms" the aggression, which it holds to be unprovoked and unjustified and a gross violation of international law and the principles of the United Nations Charter[1]. Our generation grew up with the assumption that a war of conquest in Europe belonged to our grandparents' century. This Commentary sets out what the Union has decided between 23 and 28 February, what law those decisions rest on and what remains to be done.

Three packages in six days

The Council adopted the first package on 23 February, after Russia recognised the non-government controlled areas of the Donetsk and Luhansk oblasts as independent entities and sent troops into them. The package listed all 351 members of the State Duma who voted on 15 February to urge the recognition, together with 27 other individuals and entities, and it prohibited the financing of the Russian Federation, its government and its Central Bank. It also banned imports from the two areas[2]. The Council called the recognition "illegal and unacceptable"[2].

The European Council conclusions of 24 February set out the shape of the second package. They cover the financial sector, the energy and transport sectors, dual-use goods, export control and export financing, visa policy and new listings[1]. The Foreign Affairs Council adopted that package on 25 February. It froze the assets of Vladimir Putin and Sergey Lavrov. It cut off Russia's access to the main capital markets of the Union, with measures that the Council says reach 70 per cent of the Russian banking market and the main state-owned companies. It banned the export of goods and technologies for oil refining, of aviation and space goods, and of dual-use items, and it suspended visa facilitation for Russian diplomats, officials and business people[3]. The Council stated that "tensions and conflict should be resolved exclusively through dialogue and diplomacy"[3].

The third set of measures followed on 28 February. Council Regulation (EU) 2022/334 of that date prohibits transactions related to the management of the reserves and assets of the Central Bank of Russia, including with entities acting on its behalf, and it makes it "prohibited for any aircraft operated by Russian air carriers" to land in, take off from or overfly the territory of the Union[4]. On 26 February, the Commission, France, Germany, Italy, the United Kingdom, Canada and the United States had committed in a joint statement to ensure that "selected Russian banks are removed from the SWIFT messaging system", to prevent the Russian Central Bank from using its reserves to blunt the sanctions, to limit the sale of golden passports and to set up a transatlantic task force to trace and freeze assets[5]. The Council must still name the banks in a legal act.

What the Treaties allow, and what they do not

The Union has no mutual defence obligation towards Ukraine. Article 42(7) TEU provides that "if a Member State is the victim of armed aggression on its territory", the other Member States owe it "an obligation of aid and assistance by all the means in their power", in accordance with Article 51 of the United Nations Charter and consistent with commitments under the North Atlantic Treaty Organisation[6]. Ukraine is not a Member State. The clause therefore does not apply, and no Member State has invoked it. The European Council acknowledged on 24 February "the European aspirations and the European choice of Ukraine", as stated in the Association Agreement[1]. An aspiration is not a guarantee.

What the Union could do, it did on 28 February through the European Peace Facility. Council Decision (CFSP) 2022/338 of that date adopts an assistance measure "for the supply to the Ukrainian Armed Forces of military equipment, and platforms, designed to deliver lethal force"[7]. The Decision rests on Articles 28(1) and 41(2) TEU and on Decision (CFSP) 2021/509, which established the Facility. Its financial reference amount is EUR 450 million. Recital 5 records Ukraine's "urgent request to the Union for assistance" of 25 February[7]. A second Decision adopted the same day funds non-lethal supplies. The legal construction matters. Article 41(2) TEU excludes from the Union budget expenditure "arising from operations having military or defence implications"[6]. The Facility is financed by Member State contributions outside the budget, and the Parliament has no say over it. The Union is now paying for weapons through an instrument that its only directly elected institution does not control.

Member States are moving faster than the Treaties. On 27 February the German Chancellor told the Bundestag that "the twenty-fourth of February 2022 marks a watershed in the history of our continent". He announced a one-off special fund of EUR 100 billion for the Bundeswehr, a commitment to spend more than 2 per cent of GDP on defence every year and the delivery of weapons to Ukraine[8].

Three gaps remain. The joint statement on SWIFT is a political commitment and the Council must adopt a Regulation to give it effect. An asset freeze on the Central Bank is only as strong as the registers that Member States keep. The EUR 450 million is a first tranche and the Facility's ceiling for 2021 to 2027 was fixed before this war.

We recommend that the Council adopt the SWIFT exclusion by Regulation this week and that it name the banks in an annex, so that the political commitment of 26 February becomes an obligation for every operator in the Union.

We recommend that the Council raise the financial ceiling of the European Peace Facility at the next Foreign Affairs Council and that it ask the High Representative to report to the European Parliament every month on each assistance measure for Ukraine.

We recommend that the European Council, at its informal meeting of 10 and 11 March, give the Commission a mandate to propose a common register of frozen assets, so that the transatlantic task force of 26 February has one European counterpart.

We recommend that Member States state publicly how Article 42(7) TEU and Article 5 of the North Atlantic Treaty would operate together, so that the obligation of aid and assistance has a meaning before it is needed.