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Bulgaria prepares to revoke exception from sanctions that allowed Russia to earn millions

Bulgaria prepares to revoke exception from sanctions that allowed Russia to earn millions Bulgaria removes loophole in EU sanctions that allowed Russia to earn millions (photo: Getty Images)

On Wednesday, December 13, the Bulgarian Parliament took the first step toward lifting an exception from sanctions that brought millions of euros to the Russian Federation. The vote took place against the backdrop of increased pressure on the country from the EU, according to Politico.

This move was planned earlier and was made shortly after Bulgaria imported Russian oil at a price higher than the one set by the Big Seven and the EU from August to October. This transaction brought 430 million euros in direct taxes to the Kremlin.

This trade was legal because Bulgaria had a unique exemption from the EU ban on importing Russian oil by sea, subject to sanctions. The EU granted Bulgaria an exception to protect the country from sharp fuel price hikes. However, this loophole also allowed Moscow to reap significant profits.

In total, the exemption brought Russia 2 billion euros in export revenue since the imposition of sanctions, resulting in an estimated payment of 1 billion euros in taxes to Moscow.

Following this report, the Bulgarian government announced plans to halt the exemption from sanctions on March 1 instead of the previously self-imposed deadline of October 31. On Wednesday, Bulgarian lawmakers began making this plan law as the parliamentary economic committee voted in favor of the proposal. However, the draft law did not mention any price caps.

The vote took place amid increasing pressure on Bulgaria, with recent revelations focusing attention, in particular, on circumventions of price controls.

A European Commission official noted that if there is a loophole, it should be closed. Several EU diplomats expressed a similar sentiment.

"All [such] loopholes should be closed as soon as possible,” said one, adding that any energy-related dependencies on Russia “are not only a threat to the EU's security but also add additional funds to fuel Russia's war of aggression against Ukraine."

In general, diplomats from four EU countries supported the call for Bulgaria to cancel the privilege, allowing it to buy oil at a price higher than that set by allies.

Sanctions imposed by Bulgaria against Russia

In late September, the Bulgarian parliament approved the gradual cessation of importing Russian oil, aligning the country with other EU members.

However, in 2023, the Kremlin earned an additional 1 billion euros after Russia's largest private oil company exploited loopholes in EU sanctions rules with the help of Bulgaria.

In November, Sofia closed this oil loophole, which had allowed Russia to earn over 1 billion euros.