Following the third anniversary of Russia’s invasion of Ukraine, we examine the European Union’s most recently implemented sanctions packages against Russia, which focus on tackling Russia’s shadow fleet and combatting sanctions circumvention.
These packages include significant individual and entity listings related to the Russian military-industrial complex and enhance legal protection for EU Central Securities Depositories (EU CSDs). Some Chinese individuals are also impacted by the imposition of full sanctions for the first time.
The key elements of the fifteenth and sixteenth sanctions packages are:
Additional Listings: The packages include many new listings between both packages, aimed at individuals and entities undermining Ukraine’s territorial integrity. These listings target Russian military companies and senior managers in the Russian energy sector. Furthermore, full sanctions are imposed on seven Chinese persons and entities and two senior officials from North Korea.
Anti-Circumvention Measures: The new measures target additional vessels from Russia’s “shadow fleet” used by Russia to evade Western sanctions. These vessels face port access bans and service provision bans, aiming to increase costs for Russia and reduce the number of vessels carrying Russian crude oil. Two new criteria will allow the EU to impose restrictive measures on individuals and entities that own or operate vessels in Putin’s shadow fleet and/or those supporting or benefitting from Russia’s military and industrial complex.
Financial Measures: The sixteenth sanctions package imposes a transaction ban on credit or financial institutions established outside of Russia that use the System for Transfer of Financial Messages, a Russian alternative to the international SWIFT payment system. The Council extended the prohibition of specialised financial messaging services to 13 regional banks.
Trade: The list of restricted items contributing to Russia’s military systems has been expanded to include chemical precursors, Computer Numerical Control machine software, chromium compounds, and Unmanned Aerial Vehicle flight controllers. Additionally, further restrictions are introduced on goods exports, enhancing Russian industrial capabilities.
Protecting EU Operators’ Interests: The measures prohibit the recognition or enforcement of specific Russian court rulings in the EU. They also extend derogations to enable EU operators to divest from Russia.
Broadcasting Ban: The EU has suspended the broadcasting licenses of eight Russian media outlets under permanent Russian leadership control, prohibiting these outlets from broadcasting their content in the EU.
Transport: The EU flight ban is widened to include listed air carriers operating domestic flights within Russia and exporting aircraft or other aviation goods and technology to Russian air carriers and their controlled entities. The EU’s new prohibition on the transport of goods by roads prevents any changes to road transport undertakings’ capital structure that would increase the percentage share owned by Russian natural or legal persons over 25%.
Energy: Further restrictions are imposed on exports of goods and technology related to oil and gas exploration software. The prohibition on providing goods, technology, and services for completing crude oil projects in Russia is extended. The Council has also banned the provision of temporary storage for Russian crude oil and petroleum products within the EU.
Construction: The provision of construction services, including civil engineering works, in illegally occupied parts of Ukraine is prohibited. EU operators are required to implement due diligence mechanisms to prevent the re-exportation of sanctioned goods to Russia.
Belarus, Crimea and Sevastopol, and Non-Government Controlled Areas of Ukraine: Further restrictive measures mirroring trade-related sanctions against Russia are introduced. Providing various services and software related to enterprise management and industrial design is restricted.
The sanctions regime has been prolonged for a further year until February 2026. William Fry LLP will continue to monitor developments in this area.
Contributed by Nickolas Dergach
