Rosatom and Western sanctions — opinion

The matter was recently brought to the attention of U.S. Congressman Lloyd Doggett, who in his column for Foreign Policy [magazine] exposes how the company fuels [Russian dictator Vladimir] Putin’s war machine. He calls on the international community to increase pressure and reduce dependence on Moscow as soon as possible, as well as imposing sanctions against all Rosatom assets to counter Russian aggression in Ukraine.

In the article, the congressman refers to the data of the DiXi Group think tank, which collected information about Rosatom’s new assets, including high-tech companies developing hardware and software for certified information protection, shipping companies, producers of titanium and zirconium and industrial equipment, etc.

Lloyd notes that Russia’s nuclear industry is still not subject to sanctions, while Rosatom’s intertwining with this and other sectors outside the nuclear industry helps Moscow avoid almost any international restrictions. Under this sanction-protected “shield,” Rosatom structures become a channel for perfectly legal acquisition of technologies to step up its dominance in the global nuclear market and strengthen the Russian military, which is supplied with basic materials, in particular aluminum oxide for rocket fuel and lithium-ion batteries for tanks and air defense systems, and 3D-printing technologies.

Examples of bypassing U.S. restrictions include Rosatom’s acquisition of Fesco, one of Russia’s largest shipping companies, and Rosatom’s subsidiary Renera, a manufacturer of high-quality lithium-ion batteries, which can be supplied to Russia through third countries despite a ban on exports from South Korea.

The call for sanctions against Rosatom and the reduction of the world’s dependence on Russia in nuclear energy was made public after March hearings in the U.S. Congress with the participation of representatives of the Ukrainian government. Ukrainian Energy Minister Herman Halushchenko said that the Russian nuclear operator was directly involved in planning and financing of Russia’s armed aggression against Ukraine.

It’s important that sanctions against Rosatom are being discussed increasingly more often, indicating that tangible restrictions on the Kremlin’s expansion in the nuclear industry will eventually be introduced. The coalition countries’ significant dependence on Russian nuclear supplies remains the main obstacle to such a step. For example, U.S. nuclear power plant (NPP) operators still purchase about $1 billion worth of nuclear fuel from Rosatom each year, which is about 20% of the total U.S. demand for enriched uranium. Many EU countries also rely on Russian nuclear fuel.

Due to this dependence, Rosatom’s core business has avoided sanctions and continues to expand. Almost 20 new agreements and memorandums of cooperation were signed in 2023, mainly with Asian and African countries interested in affordable nuclear energy. All NPP construction projects launched since the beginning of Russia’s full-scale invasion of Ukraine in February 2022 are underway. These relations serve Russian strategic interests, preserving its geopolitical influence.

While Western countries focus on diplomacy and targeted economic sanctions, Rosatom’s strategic maneuvers, according to the U.S. congressman, are a serious challenge that cannot be ignored. Restraining Russia’s capabilities requires much more comprehensive action, such as automatic sanctions against all Rosatom assets acquired after Feb. 24, 2022, and Rosatom-linked research organizations in order to restrict Russia’s access to modern technologies.

Without further intervention, Rosatom’s dominance in the global market for nuclear power plants—where the company already supplies more than 70% of worldwide exports—will continue to provide Russia with an edge in funding the war and advancing its interests.

Currently, the bill banning Russian uranium imports, which the House unanimously passed last year, is “stuck” in the U.S. Senate. U.S. Energy Secretary Jennifer Granholm has recently urged Congress to act on the matter as soon as possible. It will also allow the funds currently spent on Russian nuclear fuel imports to be directed towards U.S. nuclear industry.

The United States and the G7+ [Group of Sevel Plus] countries can do much more to reduce dependence on Russian nuclear fuel. However, this can only truly happen when transatlantic cooperation is united and resilient on this issue. Otherwise, the absence of sanctions against Russian nuclear industry will undermine not only U.S. foreign policy goals but also jeopardize wider U.S. efforts to support Ukraine.