EU Member States adopted the 21st package of sanctions against Russia on Thursday 23 July. The agreement concerns a package far less ambitious than the one proposed by the European Commission on 9 June (see EUROPE 13884/1).
Thus, the package does not provide for a ban on imports of cod and Alaska pollock and, once again, Russian Orthodox Patriarch Kirill has escaped sanctions. In addition, the visa ban for Russian combatants has not yet been approved and Greece obtained an exemption for the transport of liquefied natural gas.
The package concerns, among other things, targeted sanctions against 48 additional individuals and 170 additional entities (218 in total), the highest number of designations ever imposed over the past four years.
Energy. The EU decided to suspend the automatic adjustment of the oil price cap mechanism until 15 July 2027. Member States therefore decided to freeze the cap on the price of Russian oil at its current level, namely $44.10 per barrel for 12 months. According to a European source, the oil price cap is highly effective in reducing Russia’s revenues, with a 30% drop in 2025 and a further 10% during the first months of 2026.
Forty-one vessels from the fleet will be sanctioned, as will eight entities and one natural person active in the shadow fleet ecosystem. The EU also introduced a provision authorising Member States to confiscate goods transported by this fleet during naval operations. The criteria for listing vessels have been amended and extended to any vessel providing services, supplies or fuel to these ‘shadow fleet’ vessels.
The EU is also designating 18 entities and one person from the oil sector, including three Russian refineries, one Belarusian refinery and a company created to sell Belarusian oil products in Russia.
In addition, the package provides for the possibility of banning transactions with Russian refineries and those in third countries that process or refine Russian crude oil and petroleum products. The EU is thus imposing a transaction ban – which will enter into force in six months if the Council of the EU still deems it necessary – on the Georgian refinery in Kulevi, which markets and processes Russian oil.
Five oil traders are also subject to a transaction ban for breaching the purchase ban.
A major cross-border energy supplier and a leading figure in Russian railways have been sanctioned, and the transaction ban has been extended to two Russian ports and four airports.
A temporary exemption, valid for one year and renewable, has been introduced to guarantee legal certainty for the transport of Russian liquefied natural gas to third countries and related purchases for contracts concluded before 24 February 2022. Each year, the Council of the EU will decide unanimously whether or not to maintain this exemption.
Moreover, any transfer or purchase must be limited to the value transferred by EU operators in 2025, “the year in which transfers to national LNG reached their lowest level”, a European source specified.
The package of measures introduces a notification obligation for sales of LNG carriers to third countries and contractual obligations aimed at mitigating the risk of resale to Russia or use in Russia. Following an assessment by the European Commission within three months, the Council of the EU will have to decide whether a total ban on sales of LNG tankers to Russia should be introduced. In addition, the ban on LNG terminal services applies not only to Russian and European operators, but also to non-Russian operators from third countries controlled by Russian companies.
Seven major players in the gold sector, one of the largest diamond companies and several entities active in the mining and metallurgical sectors have also been sanctioned. Gold and diamonds generated €12 billion and €2 billion respectively for Russia last year.
Financial services and cryptocurrencies. The Council of the EU is imposing an asset freeze and a prohibition on making funds available to 94 banks and major financial institutions, as well as to an important figure in the Russian banking sector. It is extending the transaction ban to 33 additional Russian credit and financial institutions. The European Union is also imposing a transaction ban on a Kyrgyz bank linked to the SPFS system (System for Transfer of Financial Messages) and on three other non-Russian banks for circumventing sanctions: one Mongolian and two Indian.
The EU is adding four designations linked to the cross-border A7 network – a Kremlin-backed system designed to circumvent Western sanctions – including its new links with Africa. The transaction ban is being extended to 14 cryptocurrency service platforms based in Georgia, Panama, the United Arab Emirates, the Marshall Islands, Kyrgyzstan and Belarus. In addition, for the first time, the EU is introducing the possibility of a total ban on crypto-asset services from third countries in order to strongly deter countries hosting platforms that help Russia circumvent European sanctions. This new instrument will allow the EU to ban any transaction between an EU operator and a cryptocurrency provider used by Russia.
Russian military-industrial complex. The EU is sanctioning 56 additional listings of individuals and companies, 37 of which are directly linked to long-range drones, but also one relating to the manufacturer of the Russian Starlink system. Fifty-one entities are now also subject to tighter export restrictions on dual-use goods and technologies because of their support for the military-industrial complex: 24 Russian, 14 Chinese, four Turkish, three Kyrgyz, two Kazakh, two Emirati and two Indian.
Trade. An embargo is being applied to existing exports of products and technologies used by Russia’s military industry, such as nickel powders, metals and alloys used in anti-corrosion coatings for jet engines, beryllium powders used in propellants and high-performance alloys, self-adhesive films, tapes and strips used in the aerospace and defence sectors, or specific aeronautical equipment for drones (UAVs).
The EU is also introducing additional restrictions on the import of goods generating significant revenue for Russia (more than €60 million), such as copper, nickel, lead and precious metal ores, unwrought zinc, alkaline-earth metals, zinc and chromium oxides, glassware, imitation pearls and car parts.
Propaganda and war crimes. The EU is designating eight individuals for disseminating Russian war propaganda and contributing to the manipulation of the war narrative concerning Ukraine. A Major General, regarded as “a war criminal who has engaged in the torture, executions, and desecration of bodies of Ukrainian military personnel”, has also been sanctioned.
Legal protection. This package also strengthens the protection of EU operators against decisions of Russian courts.
“No Russian court decision will be recognised. We will ensure that any Russian court decision aimed at obtaining, for example, damages for Europe or other parties is not recognised in the EU”, a European source explained.
To prevent a Russian decision from being enforced by third countries, the EU introduced an anti-enforcement injunction, issued by EU courts. This means that EU courts may order the EU operator not to enforce the court decision handed down in a third country.
Russian combatants. The package also provides for the rapid implementation of the measures needed to restrict the issuing of visas to Russian combatants and ex-combatants.
“There is an agreement in principle, but a few points still need to be settled for practical implementation. We are going to work on that; the Council should be able to give the green light by October at the latest”, a European source explained.
Belarus. The package also includes provisions concerning Belarus, similar to those imposed on Russia. In particular, it extends the ban on Belarusian nationals owning, controlling or sitting on the board of any company offering crypto-asset-related services.
Four Belarusian entities linked to, or supporting, the defence and security sectors of Belarus or Russia have also been sanctioned.
To see the legal acts: https://aeur.eu/f/n06 (Original version in French by Camille-Cerise Gessant with Ana Pisonero Hernandez and Solenn Paulic)