C 426/2
EN
Official Journal of the European Union
9.11.2022
(4)
The geopolitical crisis provoked by Russia’s aggression against Ukraine is also having a particularly severe impact on the agriculture, food processing, fisheries and aquaculture sectors.
High energy prices feed into high fertilisers prices.
Fertiliser supply is also impacted by these restrictions on fertiliser imports from Russia and Belarus.
The crisis is likely to have serious consequences on the supply of grain (in particular maize and wheat) and oilseeds (sunflower, rapeseed) or starch-derivatives from Ukraine and Russia to the EU, leading to a strong increase in livestock feed prices.
The combined impact of those cost increases in energy, fertiliser, grains and oils is hardest felt by livestock farming (2).
Ukraine is also an important producer and exporter of vegetable oils (sunflower in particular), therefore price increases for those products are affecting operators in the food-processing sector and forcing them to seek for alternatives.
(5)
A second concern is the impossibility for EU products to continue to flow to Ukraine and potentially also to Russia and Belarus due to the war situation or sanctions.
This would affect mainly the sectors of wines and spirits, processed foods (including processed fruits and vegetables), chocolate, confectionery, infant formula, and pet food in the case of Russia, fruits and vegetables in the case of Belarus, and most agricultural products in the case of Ukraine.
(6)
The situation is aggravated by the sharp increase of production costs, in part through the increase of nitrogen fertiliser costs due to the extreme increase of the price of natural gas, but also by direct use of energy in agricultural production processes.
As Russia and Belarus are important producers and exporters of all the three key fertilisers (nitrogen, phosphorus, potassium), sanctions will drive fertiliser prices even higher.
(7)
It is against that background that the Commission has decided to adopt this Communication to specify the criteria for the assessment of the compatibility with the internal market of State aid measures that Member States may take to remedy the economic effects following the aggression against Ukraine by Russia and the following sanctions imposed by the EU and international partners and the counter measures taken, for example by Russia (3).
A coordinated economic response of Member States and EU institutions is crucial to mitigate the immediate social and economic negative repercussions in the EU, to preserve economic activities and jobs, and to facilitate the structural adjustments needed in response to the new economic situation created by the Russian military aggression against Ukraine.
1.1.
Sanctions imposed by the European Union and international partners
(8)
Following the unprovoked and unjustified aggression against Ukraine by Russia, the Council of the European Union has agreed on several packages of restrictive measures.
(2) Ukraine is the EU’s fourth biggest external food supplier and a key supplier of cereals (52 % of EU maize imports, 19 % soft wheat), vegetable oils (23 %) and oilseeds (22 %, especially rapeseed: 72 %).
Global food prices are already high and could still increase in view of the situation.
(3) For example, according to WIPO Global Brand Database, WIPO Global Designs Database, PatentSight database respectively, in March 2022, there were around 150 000 trademarks, 2 000 industrial designs and 44 000 patents held by the EU firms in force in Russia.
EU firms trademarks protected in Russia concern mainly the following sectors: pharma, cosmetics, automotive, chemical and consumer goods, fashion and luxury goods.
Given the vague terminology of the amendment of the compensation methodology to be paid to patentee by Decree no 299 of 6 March 2022 (see footnote 1) adopted by the Russian Government and the economic exposure of EU undertakings and their intangible assets hold in Russia, such a counter measure may have a potential wide and harmful impact on EU undertakings.