Editor’s Note
This article outlines the EU’s latest sanctions package against Russia and Belarus, adopted on the third anniversary of the invasion of Ukraine. A key focus is the reinforcement of the extra-territorial application of these measures, aiming to increase pressure by closing potential loopholes.
On 24 February 2025, marking the third year of the Russian invasion of Ukraine, the European Union (“EU”) adopted the 16th package of sanctions against Russia, correspondingly aligned sanctions targeting Belarus, and reinforced sanctions relating to Crimea/Sevastopol and the non-government controlled areas of Ukraine in the Donetsk, Kherson, Luhansk and Zaprozhzhia oblasts (“Occupied Territories”).
As part of the 14th Package adopted in June 2024, the EU introduced “best efforts” obligations, requiring EU operators to ensure that non-EU legal persons, entities or bodies (“entities”) they own or control do not participate in activities that undermine certain, but not all, EU sanctions targeting Russia. These obligations were subsequently replicated in July 2024 in the Belarus sanctions regime.
The texts adopted on 24 February 2025 close the loop by introducing “best efforts” obligations in the main asset freeze regime targeting Russia and the regimes related to the Occupied Territories. As a result, “best efforts” obligations are now applicable throughout all main sanctions regimes targeting Russia, with corresponding extra-territorial implications for businesses globally.
As with any sanctions package, the EU designated an additional 48 individuals and 35 entities as subject to travel ban and/or asset freeze measures. The EU also introduced new designation criteria under its Russia and Belarus regimes to target Russia’s shadow fleet and Russia’s and Belarus’ military industrial complex.
But the 24 February texts illustrate the breadth of the EU’s sanctions toolbox and the EU’s readiness to use it in order to address sanctions circumvention or evasion concerns:
– For the first time, the EU designated two Belarusian and one Chinese bank as subject to a transaction ban for being users of the Russian System for Transfer of Financial Messages;
– Thirteen regional Russian banks were designated as subject to prohibitions on the provision of financial messaging services;
– Seventy-four additional vessels were targeted by an EU port ban and a ban on a broad range of activities and services;
– Fifty-three additional entities, inside and outside Russia, were added to the list of parties subject to enhanced export control restrictions in relation to dual-use and advanced technology items; and
– Eight Russian media have been designated as subject to a broadcasting ban, with the effective date to be determined by the Council.
The EU even further expanded its sanctions toolbox by:
– Extending the transaction ban framework targeting listed credit or financial institutions and crypto assets services providers facilitating transactions that support Russia’s defense industrial base to provide for potential transaction bans against providers and institutions (i) involved in frustrating sanctions targeting designated vessels under Annex XLII or (ii) frustrating the oil price cap. Designations would also extend to entities acting on their behalf or at their direction;
– Introducing a new transaction ban framework targeting listed Russian ports, locks and airports, with five ports and six airports already designated; and
– Introducing another transaction ban framework targeting listed air carriers that (i) operate domestic flights in Russia or (ii) supply controlled aircraft or aviation-related items to Russian air carriers or for flights within Russia.
The multiplicity of these different individual sanctions regimes, coupled with the fact that targets can be located both inside and outside Russia, evidences the EU’s willingness to threaten cutting access to the EU market for parties that seek to circumvent, evade or undermine EU sanctions. At the same time, the multiplicity of these regimes, each providing for its own criteria, scope of application, derogations and exemptions, complexify compliance for EU operators.
Export-related restrictions –
The EU has, first, clarified that parties identified as subject to enhanced export-related restrictions in relation to dual-use and advanced technology items are indeed subject to full-fledged restrictions, even if they are located outside Russia or Belarus, thereby moving closer to a US-like Entity List.
List of items subject to export-related restrictions under Russia and Belarus sanctions have also been extended:
– Additions to the list of advanced technology items include chemical precursors to riot control agents, software related to numerical control (CNC) machines, chromium ores and compounds and video game controllers;
– Additions to the list of industrial items include minerals, chemicals, steel, pyrotechnic, paper, and glass materials; and
– Software used in oil and gas exploration are also now controlled.
Additions were also made to the list of machineries and industrial items prohibited from transiting through Russia and/or Belarus.
Last but not least, as regards Russia only, the EU also introduced catch-all prohibitions on the provision of goods, technology and services for the completion of crude oil projects in Russia, similar to the one existing with regard to the completion of LNG projects.
Import-related restrictions –
On the same day, following a political agreement reached at the end of January 2025, the EU eased sanctions on Syria, with a view to facilitating humanitarian aid and recovery efforts as part of the country’s political transition.
