By Andrew Gray and Gabriela Baczynska
BRUSSELS (Reuters) -A new Lithuanian bid to push the European Union to impose sanctions on Russia's nuclear energy industry includes proposed exemptions for Hungary and a two-year period to phase out existing contracts, according to a document seen by Reuters.
Unlike similar, earlier proposals by the EU's Russia hawks, the latest plan from Vilnius includes a nuanced approach, an apparent attempt to win over sceptics in Budapest and elsewhere.
"It is proposed to introduce individual restrictive measures for Rosatom," says the policy proposal dated March 17, which has not been released publicly.
"In addition, it is appropriate to introduce a derogation on the basis of which operations, contracts or other agreements concluded with Rosatom could be still executed for a fixed period of time allowing European Union member states to complete the execution of these contracts or other agreements."
The document proposed setting that at two years.
The EU has slapped 10 rounds of sanctions on Russia since it invaded Ukraine in February 2022, but hundreds of millions of euros worth of trade with Russia's nuclear energy industry has not been directly affected.
All EU countries must agree for the bloc to impose sanctions and Budapest - where Rosatom is to expand the Paks nuclear power plant - has vowed to oppose any curbs on the Russian nuclear energy industry.
Lithuania's proposal sought to address that by offering Budapest specific carve-outs of up to nine years for Paks.
Otherwise, the proposed sanctions would ban new investments in Russia's civil nuclear energy sector, prevent new cooperation agreements with Rosatom, and end imports of enriched uranium from Russia, with opt-outs for France and others who have running contracts there.
The detail of the proposal is reported here for the first time.
'ONION APPROACH'
Lithuania's Foreign Minister Gabrielius Landsbergis spoke of it in broader terms on arriving for talks with his EU peers in Brussels on March 20. He said the plan amounted to "an onion approach".
"That means that it has a lot of layers to choose from. We can peel all those that we cannot... agree upon," he told reporters.
"But still there are things that we can sanction when it comes to board members, it can be new contracts, it can be a lot of things taking into consideration those countries who have existing contracts and existing projects that need to be safeguarded."
It was not clear when the EU would impose any new sanctions on Russia.
There was no immediate comment from Hungary but two French diplomatic sources suggested such a piecemeal approach could work for Paris.
“If the pressure mounts on Rosatom, I don’t think France will be last on the barricade,” said one of the sources. “There are French firms which work with Rosatom... but if we have to find an alternative solution, then we’ll find one.”
The second French diplomat said any nuclear sanctions on Russia would need to be narrowly focused on specific individuals, rather than taking the form of broader sectoral curbs. The person said one example would be Russian officials overseeing Ukraine's embattled Zaporizhzhia nuclear plant.
EU imports of Russian nuclear industry products totalled nearly 750 million euros ($820 million) in 2022, according to Eurostat. EU nuclear agency Euratom said Russia provided a fifth of the uranium used by EU utilities in 2021, the latest data available, as well as a fourth of conversion and a third of enrichment services.
The agency said Russia’s share in the EU market might have increased in 2022 as utilities with existing contracts advanced deliveries to mitigate short-term risks following the invasion.
The French energy ministry disputed parts of a recent report by Greenpeace, which said Paris had sharply increased imports of enriched uranium from Russia since the war began.
Nuclear reactors in Hungary, Bulgaria, Slovakia, the Czech Republic and Finland depended on Russian-made fuel, and France was relying on Russia for reprocessing uranium, according to Euratom.
“The future dependence on Russia in the nuclear fuel cycle depends on investment in the ‘global West’,” Euratom told Reuters.
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