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EU Cuts Russian Rare-Earth Supplier Linked to Defense Industry From Draft Sanctions List at Estonia’s Request

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Industrial facilities at the NPM Silmet AS factory in Sillamae, Estonia, on January 20, 2023. (Source: Getty Images)
Industrial facilities at the NPM Silmet AS factory in Sillamae, Estonia, on January 20, 2023. (Source: Getty Images)

The EU removed one Russian company and an associated individual from its proposed 22nd sanctions package at Estonia’s request because the company supplies strategically important rare-earth materials to an Estonian processor, ERR reported on October 8.

The sanctions package, agreed by EU ambassadors on October 7, includes 743 individuals and 826 companies linked to Russia’s military-industrial complex.

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Radio Free Europe reported that the final list was one individual and one company shorter than an earlier version. The outlet’s journalist Rikard Jozwiak later wrote that the Russian company supplies rare-earth materials to Silmet, which processes them for wind turbines and other uses in the EU.

Kerstin Lepik, spokesperson for Estonia’s permanent representation in Brussels, confirmed the decision to ERR.

“Yes, we asked for one Russian company and a related individual to be removed from the sanctions list approved today by the ambassadors of the COREPER II member states,” Lepik stated.

She explained that the company supplies materials to Estonia-based NPM Silmet that are considered strategically important for Europe. Industries dependent on NPM Silmet include electric vehicle manufacturing, wind turbines, electronics, automotive production, and aviation across the EU.

NPM Silmet is actively seeking alternative sources for materials currently imported from Russia, Lepik added. Estonia plans to reconsider adding the Russian company and the associated individual to the sanctions list next year.

According to Radio Free Europe, the companies included in the proposed sanctions package appear on a Russian government list of enterprises belonging to the country’s military-industrial complex and may therefore receive state support.

The sanctions still require formal approval by the EU Council at foreign ministers’ level and are expected to enter into force in the coming days. They include asset freezes, travel bans, and restrictions on providing funds or economic resources to listed entities and individuals.

Ukraine had previously described the sanctions as the EU’s largest package yet targeting Russia’s military-industrial complex. Ukrainian sanctions commissioner Vladyslav Vlasiuk noted that the package covers about 1,700 entries, with roughly 60% of the measures based on proposals submitted by Kyiv.

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