EU Adopts 18th Package Against Russia & Parallel Sanctions On Belarus

Presented as “one of its strongest sanctions packages against Russia”, the European Union (“EU”)’s 18th package against Russia was officially published on July 19, 2025, along with mirror amendments to the Belarus sanctions regime. Through a mix of individual sanctions and trade control measures, the EU seeks to raise the pressure against Russia by targeting its energy, banking and military industrial sectors, but also showcases its willingness to act against circumvention, both inside and outside the EU, through the reinforcement and application of its sanctions toolbox.

New asset freeze measures were imposed through Decision 2025/1478 and Regulation 2025/1476 under the main asset freeze regime targeting Russia (Decision 2014/145 and Regulation 269/2014) and through Decision 2025/1461 and Regulation 2025/1469 under the Belarus sanctions regime (Decision 2012/642 and Regulation 765/2006). Amendments to sectoral sanctions targeting Russia (Decision 2015/512 and Regulation 833/2014) and Belarus (Decision 2012/642 and Regulation 765/2006) were made through, respectively, Decision 2025/1495 and Regulation 2025/1494 and Decision 2025/1471 and Regulation 2025/1472. Through these texts, the EU made extensive use of transaction bans and other individual sanctions, reinforced trade controls and introduced provisions in response to Investor-State Dispute Settlement (“ISDS”) proceedings brought outside the EU.

Asset freeze measures entered into force on July 19, 2025. Other measures became effective on July 20, 2025.

1. New Asset Freeze Measures

The EU imposed travel ban and/or asset freeze measures against 14 natural persons (“individuals”) and 49 legal persons, entities or bodies (“entities”). Designations are primarily related to the Russian energy sector, shadow fleet value chain and military-industrial complex, with some specifically related to circumvention concerns. Notably, asset freeze measures have been imposed against 18 entities located outside Russia, primarily in China, India and the United Arab Emirates (“UAE”), including two multinational traders of Russian crude oil and an Indian refinery.

These additional designations complement asset freeze measures adopted on July 15, 2025 against 14 individuals and six entities under the Russian hybrid threats and Russian human rights regimes, along with additional designations under the Moldova, Global Human Rights and Haiti regimes, as well as additional designations under the Sudan regime on July 18, 2025.

2. Reinforcing and Applying the Sanctions Toolbox: Transaction Bans & Other Individual Sanctions

Facilitating designations under existing transaction ban frameworks targeting (i) SPFS users (“SPFS transaction ban”, Article 5ac and Annex XLIV of Regulation 833/2014) and (ii) entities frustrating EU sanctions (“frustration transaction ban” Article 5ad and Annex XLV of Regulation 833/2014): Transaction bans can now be imposed against:

• Under the SPFS transaction ban: Any entity outside Russia that uses the SPFS or equivalent specialised financial messaging services set up by Russia, without further conditions;
• Under the frustration transaction ban: 
  • Non-EU credit or financial institutions or crypto-assets service providers that (i) significantly frustrate Regulation 833/2014 or 269/2014 (rather than specific restrictive measures), or (ii) support Russia’s war of aggression against Ukraine (including by processing transactions or providing export financing for trade operations that frustrate Regulation 833/2014);
  • Other non-EU entities that significantly frustrate oil-related sanctions (import ban, price cap and sanctions against designated vessels).

Conversion of financial messaging services prohibitions into a transaction ban framework (“FMS transaction ban,” Article 5h and Annex XIV of Regulation 833/2014/Article 1zb and Annex XV of Regulation 765/2006): Instead of being limited to financial messaging services prohibitions, designations under that framework now entail a full transaction ban, including for the 23 Russian banks and four Belarusian banks that were already listed and the entities in Russia or Belarus, as relevant, that they own for more than 50%.

Limited exemptions and derogations have been introduced.

Designating banks under the amended transaction ban frameworks: 23 additional Russian banks were designated under the FMS transaction ban, while two Chinese banks were designated under the frustration transaction ban. These new designations will become effective as of August 9, 2025.

New transaction ban frameworks: Two new transaction bans were introduced to target, effective July 20, 2022:

• Nord Stream and Nord Stream 2 (new Article 5af of Regulation 833/2014), applying to all transactions with the natural gas pipelines, their completion, operation, maintenance or use, as well as related financing.
• The Russian Direct Investment Fund (“RDIF”) (new Article 5ag and Annex XLIX of Regulation 833/2014), applying to all transactions with (i) RDIF; (ii) entities owned or controlled by RDIF; (iii) designated non-EU entities in which they have made significant investments; (iv) designated non-EU entities providing investment or other financial services to them; and (v) entities acting on their behalf or at their direction. Four entities in which RDIF made significant investments were designated.

Limited exemptions and derogations have been introduced.

Extension of list of vessels subject to EU port ban and ban on a broad range of activities and services (Article 3s and Annex XLII of Regulation 833/2014): 105 vessels that are part of Russia’s shadow fleet have been designated, as of July 20, 2025.

Three LNG tankers were de-listed following commitments that they would no longer engage in the transport of Russian energy to the Russian Yamal and Arctic 2 projects (North Moon, North Ocean and North Light).

Extension of list of parties subject to export-related prohibitions on dual-use and advanced technology items (Article 2b and Annex IV of Regulation 833/2014/Article 1fa and Annex V of Regulation 765/2006): 26 entities have been added to Annex IV of Regulation 833/2014, including 11 in China, Hong Kong and Turkey identified as enabling circumvention of export restrictions. In parallel, one entity in Belarus has been added to Annex V of Regulation 765/2006. 

New exemptions from existing transaction bans: Exemptions were, subject to conditions, introduced as follows:

• Under the transaction ban framework targeting State-related entities (Article 5aa and Annex XIX of Regulation 833/2014), an exemption excludes from the transaction ban EU entities acting on behalf or at the direction of a targeted entity, where firewalls have been put in place.
• Under the infrastructure transaction ban (Article 5ae and Annex XLVII of Regulation 833/2014), new exemptions exclude (i) trade in non-Russian coal involving targeted Russian ports and locks, and (ii) transactions related to civil nuclear capabilities and facilities involving targeted Russian airports.

3. Reinforcing Trade Controls

3.1 Military Embargoes: Incorporation in Regulations and Alignment of Belarus Sanctions

Trade controls targeting military items, as listed in the Common Military List of the EU, which were previously only provided for under Decisions 2014/512 and 2012/642, have been incorporated in Regulations 833/2014 and 765/2006 (Article 4 of Regulation 833/2014/new Articles 1aa and 1ab and amended Article 1b of Regulation 765/2006).

Embargoes cover both export- and import-related prohibitions, including for Belarus, which was previously only subject to an export-related embargo.  

Existing exemptions and derogations previously foreseen under the relevant decisions have been maintained in the Regulations, with specific exemptions and derogations introduced as regards the import-related embargo targeting Belarus.

3.2 Export-Related Restrictions: Introducing Catch-All Controls and Extending the List of Controlled Items

Introduction of catch-all controls on advanced technology items exports to third countries other than Russia and Belarus (Articles 2a and Annex VII of Regulation 833/2014/Article 1f and Annex Va of Regulation 765/2006): Member States now have an additional tool to stop and investigate exports to third countries—other than Russia and Belarus—of advanced technology items where there are credible risks or sufficient reason to suspect that those may be indirectly exported to Russia or Belarus via another third country, by notifying exporters that such exports are subject to an authorization.

This new catch-all mechanism is not a blank check, as it is without prejudice to the prohibition on indirect exports to Russia and Belarus. Even if authorities do not subject an export to authorization, exporters may find themselves liable in case advanced technology items are exported to Russia or Belarus via a third country. This new catch-all mechanism is also not a blanket restriction, but a tool to be used discretionarily by authorities to prevent circumvention.

Extension of list of controlled items: The following lists of controlled items have been extended:

• Advanced technology items (Articles 2a and 2b and Annex VII of Regulation 833/2014/Articles 1f and 1fa and Annex Va of Regulation 765/2006): Additions concern (i) constituent chemicals for propellants and (ii) CNC machines. For Belarus, additional (i) energetic material and precursors and (ii) machinery parts, assemblies and components were listed to align with Russia sanctions.
• Industrial items (Article 3k and Annex XXIII of Regulation 833/2014/Article 1bb and Annex XVIII of Regulation 765/2006): Additions concern (i) machinery; (ii) chemicals; (iii) metals; and (iv) plastics.

Annexes of items for which transit through Russia (Annex XXXVII of Regulation 833/2014) and Belarus (Annexes XIVa and XIX of Regulation 765/2006) is prohibited have also been extended.

Limited exemptions and derogations have been introduced, including to wind down existing contracts for newly listed items, but with partial alignment between the Russia and Belarus regimes.

Russia only: restrictions on banking software (Article 5n and Annex XXXIX of Regulation 833/2014): New restrictions have been introduced to prohibit the sale, supply, transfer, export or provision of software with certain uses in the banking and financial sector to the Government of Russia or entities established in Russia.

A wind-down exemption allows the execution of contracts concluded before July 20, 2025 until September 30, 2025.

3.3 Import-Related Restrictions Targeting Russia: Reinforced Measures On Crude Oil And Petroleum Products

New import-related restrictions on third-country petroleum products obtained from Russian crude oil (new Article 3ma of Regulation 833/2014): Beginning January 21, 2026, import-related restrictions will apply on petroleum products (CN code 2710) obtained in a third country from crude oil of Russian origin (CN 2709 00).

Accordingly, importers of petroleum products will be required to provide evidence of origin of the crude oil used for refining in a third country, with the European Commission required to issue guidelines in that regard. This requirement will not apply to imports from partner countries with substantially equivalent restrictions (as listed in a new Annex XLI), while exports of petroleum products from net exporter countries will be considered obtained from domestic crude oil (although this may be challenged by competent authorities).

Lowering of the oil price cap and adjusted methodology for determining the price cap level (Article 3n and Annex XXVIII of Regulation 833/2014): Effective September 3, 2025, the price cap for crude oil will be lowered to 47.6 USD/barrel. Contracts concluded before July 20, 2025 which were compliant with the prior 60 USD/barrel price cap on their date of conclusion can be executed until October 18, 2025.

Going forward, the European Commission will be tasked with adjusting the level of the price cap every six months, to set it 15% below the average market price for Russian crude oil over the prior reference period. Extraordinary reviews may take place in case of duly justified developments in the oil market, geopolitical circumstances or other relevant considerations.

Termination of the exemption on pipeline imports of Russian crude oil for the Czech Republic (Article 3m and Annex XXV of Regulation 833/2014): The delivery by pipeline from Russia of crude oil to the Czech Republic is no longer exempted from import-related restrictions.

New derogation allowing Russian LNG imports, purchases or transfers through EU terminals that are not connected to the interconnected natural gas system (Article 3u of Regulation 833/2014): Such imports, purchases or transfers may now be authorized by Member States that are not directly connected to the interconnected natural gas system of any other Member State and which received the first commercial supply of its first long-term natural gas supply contract after July 20, 2025, if used to ensure its energy supply.  

4. ISDS Proceedings Outside the EU

New provisions have been introduced to prohibit the recognition or enforcement of judgments or decisions, as well as requests for assistance, punishment or penalty linked to ISDS proceedings outside the EU against a Member State that are related to EU sanctions targeting Russia (Regulations 269/2014 and 833/2014) or Belarus (Regulation 765/2006), where made by (i) designated entities under Regulation 833/2014 or 765/2006 and non-EU entities they own for more than 50%; (ii) any Russian or Belarusian individual or entity; (iii) any individual or entity acting through them or on their behalf; and (iv) any individual or entity that owns or controls these entities.

The EU and its Member States are furthermore now entitled to recover damages in the EU for any damage that is the consequence of such ISDS proceedings, with Member States courts being entitled to hear the aforementioned claims for damages, where no EU court has jurisdiction (provided the case has a sufficient connection with the Member State of the court seized).