 Good afternoon, everybody, you're very welcome to the IIA. My name is Alex White and Director General here at the Institute. We're delighted to be joined this afternoon by David O'Sullivan, EU sanctions envoy. And I think it can fairly and accurately be said on this occasion that he needs no introduction to this audience. We're very much looking forward to hearing David reflect on his role as EU sanctions envoy thus far and the objectives of sanctions on Russia following the full-scale invasion of Ukraine. So in the normal fashion, David will speak to us for about 20 minutes and then we'll have a Q&A with the audience, both here in the room and online. So if you are watching online, you're welcome. You'll be able to join the discussion using the Q&A function on your Zoom and send in those questions as they occur to you, as we always say, rather than waiting until the end. We tend to get a bunch of questions towards the end we're just watching the clock and we're trying to finish. So if a question occurs to you, of course if you're watching us online, you can pop that in just as soon as it occurs to you. Those of you who are in the room, more than welcome, you can put in your questions in advance and we're afraid you just have to memorize them and then we'll have a great opportunity once David has finished his introductory presentation. That presentation and the Q&A are both on the record. You can join the discussion as well on Twitter or X, I should say, using the handle at IAEA. And if you're going to do that, please tag us any post that you share about the event. David O'Sullivan took up his role as EU sanctions envoy in January of 2023, leaving a certain vacancy in this organization, which I was pleased to fill. Prior to this, he was director general, as I say, here. Before working in the Institute, he was with the Brussels office of the law firm Steptoe and Johnson as a senior councillor between 2019 and 2022. David served as ambassador of the European Union, delegation to the United States from November, 2014 until February, 2019. And prior to his appointment as ambassador, he was the chief operating officer of the EU's diplomatic service, the European External Action Service. He previously held a number of senior positions within the European Commission, including director general of trade, secretary general of the European Commission itself and chief of staff to commission president Romano Prodi between 1999 and 2000. And I think many of you will be aware that David started his career, his illustrious career. I think it may be said, an eventful career with the Department of Foreign Affairs back in 1977. Now, before I introduce David and invite him to address you, I think it is appropriate that we should note the very sad death this week of John Bruton, former Taoiseach, also a former EU ambassador to the United States, opposed to that I mentioned David subsequently held. John Bruton was an esteemed member of the board of the IIA, a huge supporter of our activities down through the years. And in particular, I think, as I understand it, although I wasn't here during the period of the IIA's engagement with Brexit, but he was an especially active and energetic member of the Brexit group that we had here within the Institute. And in fact, subsequently, and I am aware of this in the kind of post-Brexit years, if I can call it that, that we're in, he continued to be very, very closely engaged with the questions of Irish-British relations, the impact of Brexit, the implications of Brexit. Right up to the current period in our UK group here, and he appeared regularly on our Friday morning sessions as engaged and as, as I say, as energetic and as interested as he ever was. As well as being a politician, obviously, a minister, Taoiseach, a diplomat working on many, I know when I was in government myself being conscious that John Bruton was working on many initiatives, some sung and some very unsung on behalf of this country internationally, but as well as all of those things, he was also a public intellectual in the truest sense, curious, extremely well informed and genuinely open to all views, despite holding some really unshakable principles throughout his life as many people will be aware and appreciate. So we feel a keen sense of loss at the IIA as indeed people do across the country, obviously in the Finnegale party, but across the country. We want to send our sincere and heartfelt condolences to the Bruton family, especially to Finola and their children, and most especially to Richard Bruton, who in fact was in this room only last week in the same tradition as his brother contributing to a session that we had on the circular economy. So it's a sad moment, but we will remember John Bruton, I'm sure you'll all agree with great respect and affection. So it's my pleasure now to hand over the floor to our friend, David Lisulman, to address you. Well, thank you very much, Alex, and just let me echo your remarks about John, much has been said, but he was a wonderful man and a great friend of this institute, and much has been said about his Irish political career, but of course he was a very committed European, did a fantastic job as EU Ambassador in Washington, even I remember being in far-flung parts of the United States, and they would say, oh yes, you remember that Irish Ambassador John Bruton, he always left a strong imprint wherever he went, both for his humanity, his friendship, he was a very likable person, but as you say, Alex, and this is really what I remember, it's just an absolute font of ideas and thinking and stimulating all the time. I cannot count the number of times he would ring me up and say, listen, I've just had an idea, I'm thinking of writing something, what do you think, and he'd go on, and it would always be very clever, sometimes provocative, didn't always agree with everything he said, but he was a fantastic, always thinking, always the mind always functioning and thinking a bit out of the box as well, so he's a great loss, and I could only join in the condolences that you've offered to his wife and his children and all his family, he will be sorely, sorely missed. But I'm glad to be back at the Institute, it's great to be here and see so many familiar places, see the place in such good shape. I wanted to talk a bit about sanctions and the conflict in Ukraine. I think it's important, I want to talk about a few things, I mean, firstly, why sanctions? I mean, obviously, the proximate reason was, of course, the full-scale invasion of Ukraine, but I think it's very, very important to put that in a context that this is not just about Ukraine, this is not about a sort of little local border argument in Ukraine, and we were perhaps collectively guilty of taking that approach to previous crises of this kind. Actually, President Putin set out rather clearly his ambitions for a sort of new Russian imperialism at the Munich Security Conference in 2007. I think people were not perhaps listening as attentively as they should have. In 2008, we had the war in Georgia, which was already a first sign of Russia's willingness to use military force to pursue a certain agenda. Then, of course, we had the annexation of Crimea in 2014, and we had the disruptive activity and the starting of a war by Russia in the eastern provinces of Ukraine, a war which went on for eight years before we finally had the full-scale invasion. I think the scale of the threat which Mr. Putin's behavior poses to the security of this continent is never to be underestimated. This truly is a debate about who gets to define the rules of the 21st century in Europe. Are we going to have a multilateral rules-based, law-based structure recognizing the sovereignty of states and working on some basic principles? Or is it going to be the law of the jungle and who has the biggest army and the most might? That is really what this is about. And there's a very good speech which Vice President, High Representative Borel, gave to the Ukrainian parliament yesterday, I think, which very sets this out very clearly. So the stakes are enormously high. And while it is about Ukraine, and we have to show support for Ukraine, the stakes are high for all of us. This really, people will look back in 20 years and say, how did they manage that crisis? And either we will come out of it stronger and we will have the good thesis will have prevailed or it will not. And that is really how it will be judged. So our reaction when the full-scale invasion happened had to be strong. Obviously, it's got three pillars. It's got military assistance, and this has been absolutely crucial. It's got macro-financial and humanitarian assistance and it's got sanctions. I want to talk mostly about the sanctions, but of course we should not forget the other two pillars because they are very, very important. And the remarkable job which the Ukrainian army did in pushing back on the First Offensive, frankly could only have been achieved in large measure due to British, as I understand, training of the Ukrainian army since 2014, but also the equipment and the funding which they've had, including from the European Union we've had an unprecedented situation where the European Union is now putting money into armaments and military equipment for Ukraine's defense. The macroeconomic is of course crucial because this is a massive shock to the Ukrainian economy. The destruction, the wanton destruction which Russia is wreaking on civilian infrastructure and capital is going to take a long time to rebuild and it's going to cost a lot. And then of course sanctions because why sanctions? We have never had a series of sanctions like this before and the objective of the sanctions is threefold. Firstly, to deny Russia access to the advanced technology needed to make sophisticated military equipment. Secondly, to deny the Russian government the revenue to continue to fund this war. And thirdly, to impose a high economic cost on the Russian military industrial complex in response to the unprovoked full-scale invasion. These sanctions, which started almost immediately with the immobilization of Russian assets and the blocking of Russian banks to the Swift system which disconnects them from the international financial system, have over 12 and soon to be 13 successive packages extended to cover nearly all aspects of our economic and commercial relations with Ukraine. We cover about 60% of our imports and about 55% of our previous exports. It has covered some 7,500 products including hydrocarbons, including oil and gas imports. It's important, however, and we've never seen it. We've never adopted sanctions on this scale against anyone in the history of the European Union. It's important to understand also what we did not sanction. This is not a full-scale trade embargo. There was a conscious decision taken by the sanctioning coalition of the G7 Plus that we would not actually sanction Russia's continued trade in oil with other countries because we didn't wish to cut the global south off from oil supplies, which they needed. The same was true of agricultural and fertilizer. We also, for humanitarian reasons, did not ban medicines, pharmaceutical products, or medical equipment. So there are quite a number of exceptions and exemptions which have allowed Russia to continue to trade. I'll come back to the oil price gap in a moment. But these sanctions have been very challenging, frankly, for our member states to implement because previously, if we had sanctions say against Iran, the implementation of sanctions was mainly focused on oil. It was mainly run by foreign ministries and deep respect I have for foreign ministries. Implementing these sanctions runs deep into the economic and commercial fabric of all of our member states. And as you know, sanctions are adopted at European level but are implemented at national level. And so the member states have had to mobilize customs officials, police, investigative authorities, prosecutors, ministries of industry, ministries of economics in order to police the full implementation of these sanctions. And this is going to be a continual challenge because wherever there are sanctions, there is circumvention. There are efforts to get round them. There's money to be made through circumvention and there always will be people who are willing to take a chance on trying to break sanctions or to evade sanctions. So we must understand that we're never going to completely eliminate it. What we have to do is progressively make it harder, slower and more expensive for Russia to obtain any of these sanctioned products in order to impede their ability to continue to pursue this war. Now, my role has been to focus on the leakage of products through third countries who are not aligned on our sanctions. What we did was a fairly crude analysis of where trade previously went to Russia, which was now going in unusually large quantities to some other destinations and from those countries to Russia. That was a first list where we thought there were issues of circumvention potentially. And this threw up a first list, mainly Central Asia, Caucasus, Serbia, Turkey, you know, I had our Emirates were the first countries on the list and that's where I've spent a lot of my time in the last 12 months is talking to these countries about these issues. It is important to note that two of those countries, Serbia and Turkey, technically speaking, legally speaking, should be aligned on our sanctions as they are candidate countries. They have each chosen for their own good reasons not to do so, but I think this needs to be reminded from time to time. The other countries have chosen not to implement the sanctions because for one reason or another, they don't feel these sanctions, of course, do not have UN approval. They're not adopted by the UN because Russia as a permanent member of Security Council was not going to acquiesce in its own sanctioning. So they are by definition and necessarily unilateral sanctions even though they are adopted by a very wide international coalition. And of course, they are backed up by many resolutions of the General Assembly supporting the territorial integrity of Ukraine and condemning the unjust invasion. But the argument that I have used when I visit other countries is to say that they all say they don't want to be a platform for circumvention because this is potentially damaging to their reputation. Many of them are actively seeking foreign direct investment. They don't want to be on the wrong side of the companies from countries who are sanctioning and who would be hesitant to get caught up in anything which might look or feel like sanctions or costing or sanctions evasion. But also we have made the argument that they don't want to be involved, particularly in anything which might have a military application. And we were able to identify it from an early stage with the Ukrainian colleagues, products found in Russian weaponry on the battlefield, found in drones, found in missiles, found in artillery shells, mainly low, I would say low advanced tech, stuff which is fairly commonly used in civilian application, but which we know when it goes to Russia, it's going to end up in missiles or drones or artillery shells. And this was a list of some 45 Darif lines which we were able to identify and which we have asked countries not to re-export from their countries. And we have been able with some success, I think, to persuade countries that they will not allow the re-export of these products on their territory. And that has been a primary focus for some time. We, of course, have other products where we need to work as well, including we will probably lengthen that list to include numerically controlled machines, machine tools, because we've discovered that these can be used to make the very things that go into the weapons. So this is one of the, now the other thing I want to say is that from the list of countries I first gave you, it's clear that we have had a good deal of success in cutting off the flow, but we now observe new channels of circumvention which arise with other countries popping up in the statistics and we will continuously be working with these countries to address this issue of circumvention. Commissioner McGinnis next week will convene the Member States National Component Authorities, the authorities of Member States responsible for the implementation of sanctions in the afternoon. I will bring together the coordinators of the International Coalition, particularly with our US and UK colleagues who are very active. And we will discuss how on the, as we approach the second anniversary of this horrible war, how we can continuously improve and make more effective the implementation of sanctions. You may have seen that Commissioner McGinnis and Vice President Dombrovskis in the run-up to that meeting have written to Member States yesterday. We need to do more domestically. This is not a criticism of Member States, it's just an observation that when I traveled to third countries, in many cases they say, well that's very interesting, Mr. Sullivan, but I mean it's your companies that are exporting this stuff. Now that's a little unfair because in many cases our companies are in good faith, think they're exporting to one place and then it ends up in Russia. But there is much more that I think we can collectively do at home to reduce circumvention, to reduce the possibilities that goods are actually diverted. In the last package we asked our companies to introduce a no Russia clause in the resale of any of these products. No matter where they're sold, it should say that they may not be resold to Russia. I think companies need to do much more due diligence of asking where has this order come from? And if it was a company that was created in February 2022, doesn't appear to have much of a track record in trading, you might ask yourself some questions, you might like to get some additional information. So I think there will be a continuous need on our side to increase and improve our ability to identify at source the risk of circumvention, which of course we will still work with third countries. We will still push third countries not to allow themselves to be used as a platform, but at the end of the day, these products are our products, they're European, they're American, they're British, they're of other manufacturer and we need to all the time come back to what's happening domestically. In this, of course, we have the issue of the oil price cap. We allowed Russia to continue to trade to sell oil, but in order to reduce the revenue available to the Russian government, we set up a price cap of $60 a barrel. And the enforcement of this was that you cannot ship it, you not get insurance for shipping this oil unless the price cap is being respected. It worked very well for the first half of last year. To be honest, it has been slightly less effective in the second half because we've seen two innovations. One is the creation of a shadow fleet. This is a Russia basically acquiring end-of-life vessels and ensuring it in some way that is not entirely clear and continuing to ship the oil on that basis in a sort of maritime dark web, if you see what I mean. This is deeply worrying because, frankly, these vessels are often in bad condition and we're not entirely sure what the insurance is worth. So if it were to crash on a coast somewhere and there was to be a massive oil spill, it's not entirely clear whether there would be any money there to clean up afterwards. Another trick is to understate the price of the cargo and increase the, overstate the price of the oil. So this is a sort of formal attestation that tankers have to have about how much, what's the cost of the transport, the cost of the content. So these are areas where the G7 is working again. We took measures already in the 12th package and we will take further measures. But the fact is that Russian revenue from oil and gas is considerably reduced since the war began. It will never be completely eliminated. We have to be clear because we have chosen to allow it to continue to flow for good reasons of relations with the global south. Let me now touch briefly on the issue of the impact of sanctions. This is much debated. I'm an economist by training, though a long time ago, but I never believed economics was a science. I always thought it was much closer to an art. But there are differing economic views. My personal conclusion is that the sanctions are very definitely having a deep and negative effect on the Russian economy, structurally. The problem is that it is more a slow puncture than a blowout. And there's a war going on and people are dying every day in Ukraine. And so we would have liked to blow out. But what we have is a slow puncture, but it is a slow puncture where the air is escaping ineluctably from the tire and sooner or later it is gonna become impossible to drive the vehicle. This requires us to be extremely diligent and double down on the sanctions and on making the sanctions work. This is not a moment to lose our nerve or to think because some of the growth figures coming out of Russia look good, that sanctions are not working. What is happening in Russia is the transformation of a previous civilian economy into a war economy. 30% of Russian government spending is now going to the military. Military expenditure in Russia is close to six, seven, eight percent of GDP. If you cannibalize your economy and you basically sacrifice all the productive parts of your economy, social welfare, education, research, and you put it into the unproductive military sector of producing tanks and weapons, of course you will get growth. But it's not solid, reliable growth and you are actually eating away at your ultimate potential and future growth. And this is what's happening to the Russian economy. Russia, we estimate that Russia has been denied about 400 billion euros, including the 200 billion central bank assets that have been frozen in Europe and others immobilized in other parts of the world. The revenue is down and what was previously a very healthy surplus in the Russian economy is now a deficit. So there has also been massive brain drain exit of some of the best and talented people whenever I travel to Astana or Tashkent or Bishkek in all the coffee bars you see young Russians, some of the brightest and best IT people working away on their computers, all setting up startup companies, probably making a life for themselves outside of Russia, they will never go back. So there's a brain drain at the higher end of the labor market, but there's also a shortage at the lower end because of the mobilization and the many tens of thousands of young people who've been forced into the military and who are no longer available to work in the more menial kind of jobs. So there's a massive labor market squeeze. Now, none of this is to say that sanctions are the only answer or that they are a silver bullet that will solve the problem. I want to come back to my beginning, the three things, military assistance, financial assistance and the sanctions. We need all three. It's great that we have managed in Europe to reach agreement on another financial package. I sincerely hope that the Americans can find agreement on further military assistance. We will have to do more on military assistance. It is for me kind of strange to see that we're actually talking about bullets, artillery shells. I mean, this is not high tech warfare. This is just do people have enough of the sort of rudimentary elements that you kind of remembered from old war movies from another era. But that's what it's down to, unfortunately. And here there's a lot of work to be done, particularly here in Europe. We need the financial assistance, but we also need the sanctions to work, to continue to push, to continue to squeeze. We will have another package this next week, again in the run-up for the second anniversary. And we will be asking when Commissioner McGinnis convenes the member states to, for member states to really improve and continue to work on the domestic implementation of this package, because this is hugely important. The adoption of sanctioned packages is quite sexy. People like to have the fanfare. The hard work is actually, it's the customs officials, it's the tax officials, it's the prosecutors, the investigative police every day going out there and looking at what's happening on the ground. That's what makes sanctions work. It's the task of trying to persuade third countries to make it more difficult, to make it slower, to make it more expensive for Russia to break these sanctions. And I think the stakes here are so high that I never forget when I'm doing this job and I'm only doing one small part of a remarkable job done, I must say by the commission staff on this, that it's an obligation and a historical moment where everyone has to do their bit and all the small bits and pieces that you do across the full range of the sanctions, whether financial sanctions or sectoral sanctions or the hydrocarbon sanctions. This is all a contribution to a struggle which really is about what kind of world do we want to live in for the rest of this century and I don't believe that we can allow Mr. Putin to be the one to define that. I think we have to be the ones to define it and support for Ukraine is essential to our being able to do that. I'll stop there as my web introduction and of course I'm happy to take any questions. Thank you.