Bulgaria accelerates end of sanctions loophole that earned Russia €1B

Bulgaria will scrap its exemption to EU sanctions against Russia six months earlier than planned — just days after POLITICO revealed the loophole had allowed the Kremlin to rake in an extra €1 billion for its war effort in Ukraine.

Parties supporting the government’s ruling coalition announced the move Friday, following a fierce debate sparked by a POLITICO report that found Bulgaria was letting millions of barrels of Moscow’s oil reach a Russian-owned refinery on its territory, which then exported various refined fuels abroad including to EU countries.

The refinery was able to move the Russian oil because Bulgaria had received an exclusive opt-out from the EU’s ban on Russian seaborne crude oil imports — a step ostensibly meant to protect the country from energy shortages. The government said it will now end that exemption on March 1 instead of a previous, self-imposed October 31 deadline.

Aside from the estimated €983 million the loophole raised for Russia via production and export levies, it also generated almost €500 million in profits since February for refinery owner Lukoil, Russia’s largest private oil firm, according to a classified analysis prepared for Bulgaria’s parliament and seen by POLITICO.

“With March 1 as the end date for the derogation, it is guaranteed that there will be no shocks on the domestic fuel market,” said Bulgarian Finance Minister Asen Vasilev, who had personally helped negotiate the exemption in Brussels last year during sanctions talks.

Vasilev also said he would back suspending the export quotas from the Lukoil-owned refinery starting January 1 to help reduce “the money that goes to Russia.”