<article><p class="lead">The EU will be unable to implement a higher tariff for Russian oil as suggested by US treasury secretary Janet Yellen, a senior official said today, because of the difficulty in reaching a bloc-wide consensus.</p><p>Yellen indicated a G7 meeting of finance ministers and central bank governors in Bonn, from 18-20 May, would look at a number of ideas including <a href="https://direct.argusmedia.com/newsandanalysis/article/2332699">tariffs and price caps</a> on Russian energy imports.</p><p>But the official said "there's no way for us under common commercial policy to just increase the tariffs. We need to abide by the rules." Even if a tariff increase was enacted under the EU's external commercial policy it would constitute a sanction, requiring unanimity among member states. The option of using the external commercial policy was also not used in March when the EU removed Russia's <a href="https://direct.argusmedia.com/newsandanalysis/article/2312079">most-favoured-nation status</a> under WTO rules and implemented a series of import and export bans. That decision was taken under the sanctions regime, requiring unanimity, rather than as external commercial policy.</p><p>With Hungary leading a number of central and eastern European countries objecting to sanctions that would shut out Russian oil, a unanimous agreement is unlikely.</p><p>Budapest wants financial "guarantees" from the EU, and said it needs up to €750mn for <a href="https://direct.argusmedia.com/newsandanalysis/article/2331829">refinery and pipeline upgrades</a> in order to phase out crude imports from Russia.</p><p>If the EU were, however, to go ahead and impose higher tariffs on Russian oil imports or a tariff-rate quota (TRQ), blocking this would be more difficult, in theory. It would normally require Hungary to garner a qualified majority of member states — at least 15 of the 27 EU member states representing at least 65pc of the EU's total population. Budapest, though, could contest the measure at the European Court of Justice (ECJ) as the commission would have presented a trade measure with the main aim of implementing EU sanctions that legally requires unanimity.</p><p>Another option would be co-ordinated national taxes by EU countries, without Budapest's participation. This would prevent landlocked Hungary from obtaining crude from Russia. But here, the ECJ might still favour Budapest by regarding the tax as exclusive competence of the commission and as external commercial policy.</p><p>"It would be sanctions, not something that falls under commercial policy," an official said.</p><p class="bylines">By Dafydd ab Iago</p></article>
