Member states met on Friday during the G7 summit in Italy to discuss a set of sanctions put forward by the European Commission at the beginning of May.

The sanctions would have been the 14th package backed by EU member countries since Putin ordered the full-scale invasion of Ukraine in February 2022.

They included a ban on re-exporting Russian LNG and a plan to make EU companies responsible for sanctions violations.

They were then to be taken to Switzerland where over 100 leaders are attending a two-day conference to discuss Ukraine’s proposals to end the war.

But Germany said that the sanctions violations clause would force EU companies to ensure that their customers do not sell sanctioned goods to Moscow, either directly or via third parties.

It added that this could have a negative impact on small businesses if the sanctions included civilian products such as chemicals.

EU ambassadors are due to meet again on Wednesday.