VERSAILLES — The European Union will ban the export of its luxury goods to Russia in order to deal “a blow to the Russian elite”, as part of new sanctions decided with G7 countries, said European Commission President Ursula von der Leyen.

“Those who sustain Putin’s war machine should no longer be able to enjoy their lavish lifestyle while bombs fall on innocent people in Ukraine,” she added in a statement.

The measure is part of a fourth package of sanctions that aims to cripple Russia’s ability to fund its military assault against Ukraine. It will be introduced on Saturday.

Taken in coordination with G7 countries, which include the UK, the US, Canada and Japan, the package also includes denying Russia the status of most-favored nation in their respective markets.

“This will revoke important benefits that Russia enjoys as a World Trade Organization (WTO) member. Russian companies will no longer receive privileged treatment in our economies,” she added.

The allies will also work to suspend Russia’s membership to multilateral financial institutions including the International Monetary Fund and the World Bank so that it “cannot obtain financing, loans, or any other benefits from these institutions” and target some of Russian President Vladimir Putin’s “cronies” by, among other things, ensuring that they cannot use crypto assets to circumvent sanctions.

G7 finance, justice and home affairs ministers will meet next week to coordinate a task force set up to target Russia’s elite.

The import of key goods in the iron and steel sector from Russia will also be banned, which the allies said “will hit a central sector of Russia’s system, deprive billions of export revenues and ensure that our citizens are not subsidizing Putin’s war.”

“Finally, we will propose a big ban on new European investments across Russia’s energy sector,” the Commission chief said, adding that it will cover all investments, technology transfers and financial services for energy exploration and production “and thus have a big impact on Putin”.

In previous rounds of sanctions Western allies targeted oligarchs close to the Kremlin with asset and travel bans and cut off many key banks from the international banking systems.

This has led to the ruble free-falling by 50% compared to the euro and to soaring inflation, Von der Leyen said.

The new round of sanctions comes at the end of a two-day EU leaders’ summit in Versailles, in which the bloc ruled out speeding up its adhesion process for Ukraine.

But they agreed to keep up the pressure on Russia with French leader Emmanuel Macron warning that more “massive sanctions” will be imposed on Moscow if Putin “intensifies the bombing, lays siege to Kyiv and intensifies the scenes of war.” — Euronews