EU adopts 18th package of sanctions against Russia

On 19 July 2025, legal acts formalising the 18th package of European Union (“EU”) restrictive measures (sanctions) were published, including:

Council Implementing Regulation (EU) 2025/1476 of 18 July 2025 implementing Regulation (EU) No. 269/2014 (“Regulation No. 1476” and “Regulation No. 269,” respectively);
Council Regulation (EU) 2025/1494 of 18 July 2025 amending Regulation (EU) No. 833/2014 (“Regulation No. 833”);
Council Implementing Regulation (EU) 2025/1469 of 18 July 2025 implementing Article 8a(1) of Regulation (EC) No. 765/2006 (“Regulation No. 765”); and
Council Regulation (EU) 2025/1472 of 18 July 2025 amending Regulation (EC) No. 765.

The main new introductions of the 18th package are summarised below.

Expanding the list of asset freezing sanctions

Regulation No. 1476 expands the list of persons and entities subject to EU asset freezing sanctions provided under Regulation No. 269. The updated list includes 41 legal entities and 14 individuals, in particular:

foreign citizens and companies allegedly involved in the trade and/or transportation of Russian oil – Hossein Shamkhani (citizen of Iran), Abhinav Kamal (citizen of India), Ahmed Kerimov (citizen of Azerbaijan), Sapang Shipping Inc (Mauritius), 2Rivers PTE Ltd (Singapore), 2Rivers DMCC (UAE), Bellatrix Energy Limited (Hong Kong), etc;
foreign suppliers of technological equipment and electronic products – Lin Zhongheng (citizen of China and owner of Shenzhen Biguang Trading Co Ltd), Wuhan Global Sensor Technology Co Ltd (China), Shandong ODES Industry Co Ltd (China), etc;
Nayara Energy Limited, an Indian oil and gas company that owns one of the largest oil refineries in India;
a number of Russian companies – Polymer JSC, Yakutsk Fuel and Energy Company PJSC, Research Institute of Semiconductor Devices JSC, Volgotrans LLC, Krafttek LLC, Aeroscan LLC, etc; and
owners and top managers of Russian companies – N. A. Zakharov (owner of Aeroscan LLC), A. S. Ushko (lead marketing manager of TROS LLC), V. S. Fofanov (General Director of Volgotrans LLC), I. I. Shagiakhmetov (General Director of the Territorial Development Fund), etc.

As a reminder, EU asset freezing sanctions have the following consequences:

EU Persons
The EU sanctions measures are binding:
- within the EU territory;
- on EU nationals regardless of their location;
- on EU-registered legal entities and their branches and representative offices;
- on any persons within the EU territory, regardless of their nationality; and
- on board any aircraft or vessel under the jurisdiction of a Member State (collectively, “EU Persons”).
are required to block (freeze) funds and economic resources owned, held or controlled by sanctioned persons; and
EU Persons are prohibited from directly or indirectly making funds and economic resources available to or for the benefit of sanctioned persons.

EU restrictive measures also apply to legal entities that are directly or indirectly owned (50% or more) or controlled by sanctioned persons.

Reduction of the price cap for Russian crude oil

As of 3 September 2025, amendments to Annex XXVIII to Regulation No. 833 will enter into force, according to which the price cap for Russian crude oil (CN code 2709 00) will be reduced from USD60 to USD47.6 per barrel. The Annex provides for a transitional period until 18 October 2025 for the execution of any contract concluded before 20 July 2025 which was compliant with the price cap of USD60 per barrel on the date of the conclusion of that contract.

In addition, the European Commission must monitor Russian oil prices and, if necessary, revise the price cap every six months, starting from 15 January 2026, so that it is 15% lower than the average market price.

Furthermore, the European Commission shall assess the functioning of the price cap mechanism and report its findings to the EU Council every six months, starting from 15 April 2026, and propose amendments if necessary.

Prohibition on imports into the EU of petroleum products obtained from Russian crude oil

According to the new Article 3ma of Regulation No. 833, it is prohibited, as of 21 January 2026, for EU Persons to:

purchase, import or transfer, directly or indirectly into the EU, petroleum products falling under CN code 2710 obtained in a third country from crude oil falling under CN code 2709 00 originating in Russia; and
provide, directly or indirectly, technical assistance, brokering services, financing or financial assistance, as well as insurance and re-insurance, related to the abovementioned prohibition.

At the moment of importation into the EU, importers shall provide evidence of the country of origin of the crude oil used for the refining of the product in a third country unless the product is imported from a partner country listed in Annex LI. As at the date of this legal update, this list includes Canada, Norway, the United Kingdom, the United States and Switzerland.

Prohibition on Nord Stream related transactions

A new Article 5af has been introduced in Regulation No. 833, prohibiting EU Persons from engaging, directly or indirectly, in any transaction:

in connection with the natural gas pipelines Nord Stream and Nord Stream 2, with regard to the completion, operation, maintenance or use of the pipelines; and
in connection with the financing concerning the completion, operation or use of the pipelines.

The exceptions concern transactions that are strictly necessary for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety, maritime shipping or the environment or as a response to natural disasters.

Furthermore, the competent authorities of the EU Member States may authorise transactions that are strictly necessary:

for the wind-down or restructuring of a legal person, entity or body in connection with the natural gas pipelines Nord Stream and Nord Stream 2 where this is necessary to ensure that the natural gas pipelines Nord Stream and Nord Stream 2 will not be used;
to claim compensation, recoveries or any other means, from any natural or legal person, entity or body in connection with the natural gas pipelines Nord Stream and Nord Stream 2;
to effect and receive payments or recoveries that are due or become due under, or in connection with, court orders, financings, insurance, warrants or any other contracts or agreements in connection with the natural gas pipelines Nord Stream and Nord Stream 2 that were entered into before 20 July 2025;
for a settlement, or judicial or arbitration proceedings in connection with the natural gas pipelines Nord Stream and Nord Stream 2;
for regular maintenance services which are strictly necessary to prevent environmental and safety risks or a negative impact on the fisheries sector.

The abovementioned prohibition was introduced against the backdrop of news in recent months regarding the possible restart of gas pipelines, as well as interest in them from US investors.

Prohibition on transactions with the RDIF

Previously, Regulation No 833 provided for a prohibition on investing, participating or otherwise contributing to projects co-financed by the Russian Direct Investment Fund (“RDIF”). However, with the adoption of the new restrictions, the EU’s approach has become much broader. In accordance with new Article 5ag of Regulation No 833, it shall be prohibited for EU Persons to directly or indirectly engage in any transaction with the RDIF, as well as with a legal person, entity or body:

owned or controlled by the RDIF;
established outside of the EU in which the RDIF or persons controlled by it have made, directly or indirectly, a significant investment, as listed in Annex XLIX;
established outside of the EU providing investment services or other financial services to the above persons, as listed in Annex L;
acting on behalf or at the direction of the entities referred to above.

Annex XLIX already includes four legal entities: VizorLabs LLC, Kama JSC, BitRiver Rus LLC and Labadvance LLC. As at the date of this legal update, Annex L does not contain any inclusions.

Nevertheless, the competent authorities of the EU Member States may authorise transactions with the abovementioned entities if they are strictly necessary:

for the purchase, import or transport of pharmaceutical and medical products, the import, purchase and transport of which is allowed under Regulation No. 833;
for the wind-down of business activities in Russia until 31 December 2026.

Prohibition on transactions with Russian banks

Previously, Article 5h of Regulation No. 833 prohibited the provision of specialised financial messaging services (SWIFT) to legal persons, entities or bodies, as listed in Annex XIV, as well as Russian companies owned by them by more than 50%.

As part of the 18th sanctions package, this prohibition was significantly expanded: now, a complete prohibition on any transactions with entities listed in Annex XIV and their Russian subsidiaries will also apply.

As of 9 August 2025, amendments to Annex XIV will come into force, which will include 22 new Russian banks, in particular T-Bank, Bank Zenit, Bank Saint Petersburg, Yandex Bank, Bank DOM.RF, etc.

The updated Article 5h provides for a number of exemptions from the abovementioned prohibition, in particular:

the prohibition shall not apply to transactions made by nationals of an EU Member State who are residents of Russia and were so before 24 February 2022;
the competent authorities of the EU Member States may authorise transactions that are strictly necessary for the wind-down of business activities in Russia.

Change of criteria for inclusion in the list of persons using SPFS and similar systems

As we covered in more detail earlier, within the framework of the 14th sanctions package, the EU introduced a prohibition on the use of the System for the Transfer of Financial Messages (“SPFS”) and other similar systems, as well as prohibited EU Persons from conducting transactions with persons specified in Annex XLIV to Regulation No. 833.

The criterion for inclusion in this Annex was the use of the SPFS and similar systems, provided that such use increases Russia’s financial resilience and supports the circumvention of the prohibitions established by Regulations No. 833 and No. 269. The threshold for imposing sanctions has now been lowered; any use of these systems, regardless of purpose or outcome, may serve as grounds for their application.

We remind you that currently Annex XLIV includes BelVEB Bank, Belgazprombank and VTB Shanghai.

Expanding the list of vessels subject to sectoral sanctions

As we covered in more detail earlier, within the framework of the 14th sanctions package, Article 3s was added to Regulation No. 833, introducing restrictions on the vessels listed in Annex XLII.

Under the 18th sanctions package, this list was significantly expanded; it was supplemented by 105 more vessels, and currently it contains more than 400 vessels.

We remind you that EU Persons are prohibited from:

providing such vessels with access to ports, anchorage zones and locks in the EU;
importing into the EU, purchasing or transferring such vessels;
selling, supplying, chartering or exporting such vessels;
operating or crewing such vessels;
providing flag registration for the benefit of such vessels;
providing financing and financial assistance, including insurance, as well as brokering services, including ship brokering, for such vessels;
providing technical assistance and other services including bunkering, ship supply services, crew changes services, cargo loading and discharge services, fendering and tug services to the benefit of such vessels; and
engaging in ship-to-ship transfers or any other transfer of cargo with, or procuring any services from, such vessels.

Prohibition on the recognition and enforcement of investment dispute decisions

As part of the 18th sanctions package, a general prohibition was also introduced on the recognition and enforcement in the EU of investment dispute decisions issued against EU Member States in connection with sanctions imposed in accordance with Regulations No. 833 and No. 269.

Article 11 of Regulation No. 833 (the so-called “no-claims clause”) was supplemented by paragraphs 2a and 2b. In accordance with paragraph 2a, EU Member States should not recognise, give effect or enforce any injunction, order, relief, judgment of a court other than a court of a Member State, or other court, arbitral or administrative decision issued in proceedings pursuant to or derived from investor-State dispute settlement proceedings against EU Member States which could lead to the satisfaction of any claims in connection with measures imposed under Regulation No. 833 and Regulation No. 269/201 (“Decisions”), if obtained by the following persons or entities:

legal persons, entities or bodies listed in the Annexes to Regulation No. 833 or persons more than 50% owned by them, established outside the EU;
any other Russian persons, entities or bodies;
any persons, entities or bodies acting through or on behalf of the abovementioned persons; and
persons, entities or bodies which own or control the abovementioned persons.

Likewise, requests for assistance during an investigation or other proceedings, punishment or other penalty based on Decisions shall not be recognised, enforced or enter into force if they are requested by the abovementioned persons (paragraph 2b of Regulation No. 833).

In addition, EU Member States have been given the right to recover in EU courts any direct or indirect damages (including legal costs) incurred in connection with the abovementioned proceedings (Article 11e of Regulation No. 833).

The amendments in question were adopted as Russian businessmen have initiated more than a dozen investment arbitrations against EU Member States in recent years. For example, Alfa Group co-founder Mikhail Fridman initiated an arbitration against Luxembourg for more than USD16 billion.

This measure appears to be quite controversial, given that the relevant bilateral agreements on the protection and promotion of foreign investment (i) were concluded between Russia and individual EU Member States, and not the EU as a separate subject of international law, and (ii) have not been denounced in the manner provided for by them, and therefore formally remain in force.

Changes to the prohibition on the export of goods and technology

Article 2a of Regulation No. 833 prohibits EU Persons from selling, supplying, transferring or exporting, directly or indirectly, goods and technology which might contribute to Russia’s military and technological enhancement, or the development of the defence and security sector, as listed in Annex VII, to any individual or legal person, organisation or body in Russia or for use in Russia.

This Article was supplemented by paragraph 1aa, which establishes the requirement for prior authorisation for exports of such goods and technology to any third country other than Russia, if the exporter has been informed by the competent authority of the EU Member State that the items in question are or may be intended, in their entirety or in part, for any natural or legal person, entity or body in Russia, or for use in Russia.

In addition, a new exemption from the prohibition set out in Article 3k of Regulation No. 833 is provided for under the 18th sanctions package. This Article prohibits EU Persons from selling, supplying, transferring or exporting, directly or indirectly, goods which might contribute to the enhancement of Russian industrial capacities, as listed in Annex XXIII, to any natural or legal person, organisation or body in Russia or for use in Russia.

The abovementioned prohibition will not apply to the execution of contracts concluded before 20 July 2025, or of ancillary contracts necessary for the execution of such contracts:

with regard to the goods listed in Annex XXIIIE, until 21 October 2025;
with regard to the goods listed in Annex XXIIIF, until 21 January 2026.

Sanctions against Belarus

Along with sanctions against Russia, the 18th package includes sanctions against Belarus, for instance:

expansion of the list of persons subject to EU blocking sanctions;
expansion of the prohibition on the provision of specialised financial messaging services (SWIFT) to a complete prohibition on transactions (similar to restrictions against Russia);
a prohibition on the recognition and enforcement of investment arbitration awards that violate EU sanctions (similar to restrictions against Russia);
a prohibition on the import of weapons and ammunition from Belarus.