EU Publishes 18th Package of Sanctions Against Russia and Belarus

Summary of the new sanctions measures

1. Trade and supply chain measures

The 18^th sanctions package includes a number of trade- and supply chain-related restrictions to further disrupt Russia’s military-industrial complex. In particular:

• Existing export bans relating to military and industrial goods and technology have been expanded to include a range of new items, including constituent chemicals for propellants, computer numerical control machines, machine tools, additive manufacturing equipment and related items.

• The 18^th package also expands trade-related anti-circumvention measures, including by introducing a ‘catch-all’ provision to combat the circumvention via third countries of advanced technology items. Under the new provisions, an authorisation is now required for the export of certain goods and technology (as listed in the sanctions regulations) to any third country, if the exporter has been informed by a competent authority that the items in question are, or may be intended, for persons in Russia or for use in Russia.

• A further anti-circumvention measure is expansion of the transit ban, which has been enhanced by adding to the list of “Economically Critical Goods” used in construction and transport. These items (which, as above, include items such as machine tools and additive manufacturing equipment) may no longer transit Russia when exported from the EU to third countries.

• A number of new designations include third-country entities which have supplied military goods to Russia, while enhanced export and services restrictions have been applied to a number of other third-country entities.

Similar trade restrictions have been imposed on Belarus, including an embargo on arms imports and eight new designations relating to the Belarusian military complex.

 

2. Energy measures

The 18^th sanctions package contains a variety of new measures targeting oil, petroleum products and natural gas, intended to further limit Russia’s energy revenues.

In particular, the EU has introduced measures to further reduce the Oil Price Cap:

• From 3 September 2025, the Oil Price Cap for crude oil will be lowered from USD 60 to USD 47.6, in order to align with current global oil prices.

• Additionally, an “automatic and dynamic” mechanism has been introduced to review and update the Oil Price Cap systematically going forwards. The mechanism is designed to maintain the price cap at 15% lower than the average market price for Russian crude oil over the previous 6 months, with the stated aim of ensuring that the price cap remains effective.

• The new measures provide for a 90-day transition period, which will apply to existing contracts in compliance with the existing cap.

The 18^th package also imposes a full transaction ban on the Nord Stream 1 and Nord Stream 2 gas pipelines, and introduces an import ban on refined petroleum products obtained from third countries where such products are made from Russian crude oil. Refined petroleum products processed in third countries will require evidence of the country of origin at the moment they are imported into the EU (unless obtained from a “partner country” such as Canada, Norway, Switzerland, the UK or the US, as these jurisdictions apply substantively similar restrictions on such products). The new import ban on third country petroleum products of Russian-origin will take effect on 21 January 2026, following a 6-month transition period.

Notably, the 18^th package also brings to an end the exemption previously held by the Czech Republic for the import of oil products from Russia.

On top of these measures, a further 105 vessels linked to the shadow fleet have been banned from EU ports, and are also subject to a ban on receiving various services relating to maritime transport. In addition, the package includes designations of various third-country entities linked to the energy sector, as well as the India- and UAE-based entities of a private international flag registry which has historically provided flagging services to Russian vessels.

 

3. Financial measures

The 18^th package also contains a sweep of new measures targeting the finance and banking sector, including new prohibitions and an expansion of existing restrictions. Of particular note are the following measures:

• The existing ban on the provision of specialised financial messaging services has been broadened into a full transaction ban. EU firms are now prohibited from doing any business with the 23 listed entities which were already subject to the specialised financial messaging services restrictions, as well as with 22 additional Russian banks which have been newly-designated. The restrictions against these 22 additional banks will apply from 9 August 2025.

• Relatedly, in an effort to further combat sanctions circumvention, a new transaction ban has been introduced which prohibits EU persons from engaging with any legal person, entity or body in which the Russian Direct Investment Fund (RDIF) holds any ownership or investments.

• The transaction ban for third-country financial operators and crypto asset providers has been widened, meaning EU operators are banned from carrying out transactions with any financial operators who help circumvent sanctions, support Russia’s war of aggression or are connected with its financial messaging service, SPFS (Russia’s alternative to SWIFT). As a result, the EU Council can list non-Russian, non-EU banks connected to SPFS, as well as those in third countries which frustrate EU sanctions against Russia or who support Russia’s war; as an example, two Chinese banks have been designated due to their facilitation of sanctions circumvention by providing crypto asset services.

• The ban on the export and provision of services and software to the Russian Government and to Russian companies has been widened to now include key types of banking software, including software relating to online and mobile banking, ATM operations, regulatory reporting and investment banking.

As with the new trade restrictions, similar financial restrictions have been imposed in relation to Belarus, including new designations of four Belarusian banks and a full transaction ban on financial messaging services.

 

4. Measures countering sanctions-related claims

The 18^th package also builds upon existing measures designed to prevent the enforcement of sanctions-related contractual claims brought by designated persons or Russian persons.

Under the newly introduced provisions, any injunctions, orders, relief, judgments, or arbitral or administrative decisions, which are issued in proceedings other than those of a Member State, shall no longer be recognised, given effect, or enforced in the EU if they are connected with investor-State dispute settlement proceedings which could in turn lead to satisfaction of sanctions-related claims brought by Russian persons or persons designated under EU sanctions against Russia. Similarly, requests for assistance and penalties associated with investor-State dispute settlement proceedings shall no longer be recognised, given effect, or enforced in the EU if they are invoked by Russian persons or persons designated under EU sanctions against Russia.

Finally, the 18^th package introduces new provisions allowing the EU and its Member States to recover damages and legal costs incurred as a consequence of investor-State dispute settlement proceedings brought in connection with EU sanctions against Russia.

Commentary

The EU’s 18^th package of sanctions is reflective of the trends in sanctions policy seen over the last year; namely an increasing focus on anti-circumvention measures and a greater willingness to impose restrictions in relation to third countries. Overall, the new restrictions demonstrate that there is no let-up in sanctions policy, and that the EU is, in fact, ramping up its scrutiny of the effectiveness of its measures and seeking novel ways to extend its sanctions regime. In particular, the designation of private entities in China, India and the UAE (among other third countries) is evidence of this.

Going forward, it is anticipated that there will be an increasing focus on ensuring the effectiveness  of the sanctions imposed against Russia, and therefore greater emphasis on extraterritorial measures. Accordingly, businesses will need to be even more mindful of potential stakeholder risks, and step up compliance measures across all stages of the supply chain.