EU & UK Adopt New Sanctions Targeting Russia

On May 20, 2025, the European Union ("EU") and the United Kingdom ("UK") adopted new sanctions targeting Russia, reflecting prior commitments to apply "further pressure on Russia to hinder its ability to wage its war of aggression and to ensure Ukraine is placed in the best possible position to secure a just and lasting peace."

These new sanctions, which come on the back of increased diplomatic efforts to secure a peace deal between Ukraine and Russia, mostly consist of additional sanctions designations targeting primarily Russia's military-industrial complex and ‘shadow fleet.’

However, in the absence of significant progress resulting from the May 16 ceasefire talks, the EU and the UK are already discussing the imposition of additional, and more significant sanctions, seeking coordination with the bill put forward by US Senator Graham.

1. 17th SANCTIONS PACKAGE ADOPTED BY THE EU

1.1 ASSET FREEZE MEASURES

New designations – Effective May 20, 2025, the EU imposed asset-freeze measures against 66 individuals and 67 entities, both inside and outside Russia, through amendments to four different regimes:

• 17 individuals and 58 entities were designated under the main asset freeze regime targeting Russia (contained in Regulation 269/2014), pursuant to Decision 2025/936 and Regulation 2025/933.
  
  Individuals and entities ("persons") targeted include, notably: (i) the shadow fleet ecosystem, such as shipping companies and one insurer: (ii) a major Russian oil company; (iii) operators or suppliers of the Russian military-industrial complex; (iv) industrial enablers; and (v) persons involved in the looting of cultural heritage in Crimea and illegal exploitation of Ukraine agricultural production.
  
  While most designated persons are located in Russia, designations also target entities in Belarus, China, Hong Kong, Israel, Türkiye, the UK, the United Arab Emirates, and the Crimea, Zaporizhzhia and Donetsk regions of Ukraine.

• 21 individuals and six entities under the Russian hybrid threats regime (contained in Regulation 2024/2642), pursuant to Decision 2025/966 and Regulation 2025/965.
  
  These designations target persons involved in: (i) the dissemination of pro-Russian propaganda; (ii) the undermining of the democratic political process in Russia; (iii) espionage missions and sabotage on critical infrastructure; (iv) electronic warfare affecting the GPS signal in Baltic states and disrupting civil aviation; (v) spreading Russian narrative and anti-western narrative in Africa or (vi) enabling Russian-driven destabilizing activities.
  
  Designated persons include non-Russian nationals, including EU citizens, as well as entities in the Czech Republic, Türkiye and the UK.

• 28 individuals under the Russia-specific human rights regime (contained in Regulation 2024/1485), pursuant to Decision 2025/957 and Regulation 2025/958.
  
  Members of the Russian judiciary were designated due to their role in the persecution and prosecution of opposition politicians, activists and bloggers.

• Three entities under the chemical weapons regime (contained in Regulation 2018/1542), pursuant to Decision 2025/960 and Regulation 2025/959.
  
  These entities were designated in connection with the use of riot control agents by Russian forces in Ukraine.

Individuals are also subject to travel ban measures.

New designation criteria – Through Decision 2025/963 and Regulation 2025/964, the EU amended the designation criteria under the Russian hybrid threats regime (contained in Regulation 2024/2642), notably to allow the EU to impose asset freeze measures against persons involved in or facilitating destabilizing actions or policies attributable to the Russian government (in addition to those responsible for, implementing, supporting or benefiting from such actions or policies).

On May 14, 2025, the EU had in addition adopted Decision 2025/904 and Regulation 2025/903, which amended the designation criteria under the main asset freeze regime targeting Russia (contained in Regulation 269/2014) to:

• Entitle the EU to impose asset freeze measures against individuals and entities that have participated in or enabled transfers of ownership, control or economic benefit of the business interests of sanctioned leading businesspersons operating in Russia;
• Ensure that asset freeze measures against leading businesspersons operating in Russia can be maintained in case they transferred ownership, control or economic benefit that justified their designation on or after 24 February 2024, unless claims regarding transfers of shares, resignations from functions or similar actions are supported by recent and reliable information that can reasonably be viewed as sufficient to consider that the situation of the designated persons concerned has changed in a relevant manner.

1.2 NEW INDIVIDUAL SANCTIONS FRAMEWORKS UNDER RUSSIAN HYBRID THREATS REGIME

The EU added three individual sanctions frameworks under the Russian hybrid threats regime (contained in Regulation 2024/2642), through Decision 2025/963 and Regulation 2025/964.

Building on the individual sanctions framework introduced under the main sectoral sanctions regime targeting Russia (contained in Regulation 833/2014), as notably introduced through the 14th and 16th packages, these new frameworks reinforce the EU's sanctions toolbox and its ability to sanction operators outside its jurisdiction.

New transaction ban targeting designated tangible assets supporting Russia-driven destabilizing activities: This mechanism provides for a ban on transactions relating to or involving tangible assets, such as vessels, aircraft, real estate, ports, airports, and physical elements of digital and communication networks, designated under a new Annex III of Regulation 2024/2642.

Although Annex III is currently empty, this mechanism can be used to target assets identified as:

• Used in activities of a destabilizing character attributable to or benefitting the Russian government that (i) endanger or damage critical infrastructure; (ii) violate national, European or international air, marine or land traffic regulations; or (iii) otherwise are of a destabilizing character, espionage and surveillance, the transport of weapons or military equipment and personnel, information manipulation and interference.
• Owned, chartered or operated by or otherwise used in the name of, on behalf of, in relation with or for the benefit of asset freeze targets under the Russian hybrid threats regime.

Limited exemptions and derogations would apply.

New transaction ban targeting designated parties facilitating, supporting or assisting Russia’s destabilizing activities: This mechanism provides for a ban on transactions with entities designated under the new Annex IV of Regulation 2024/2642.

Annex IV is currently empty, but can include entities identified as:

• Non-EU credit or financial institutions or crypto-assets service providers that facilitate activities by, or otherwise support, parties engaged in Russia’s destabilizing activities (by reference to listing criteria under asset freeze measures); or
• Entities providing technical or operational assistance to parties engaged in Russia’s destabilizing activities (by reference to listing criteria under asset freeze measures).

Limited exemptions and derogations would apply.

New broadcasting and advertising ban targeting designated media: A new broadcasting and  advertising ban, similar to the one existing under Regulation 833/2014, has been introduced to target media to be designated under a new Annex V of Regulation 2024/2642.

Annex V is also currently empty, but seeks to target Russia’s involvement in a systematic, international campaign of media manipulation and distortion of facts in order to enhance its destabilizing strategy against the EU and its Member States.

Related extension of the "no claims" clause: Provisions prohibiting the satisfaction of claims brought by certain persons in connection with contracts or transactions affected by sanctions have been extended to target entities that would be designated under Annexes IV and V, non-EU entities they own for more than 50% and any person acting through or on their behalf.

1.3 AMENDMENTS TO SECTORAL SANCTIONS TARGETING RUSSIA

While more limited in scope, the EU has also extended its sectoral sanctions targeting Russia (contained in Regulation 833/2014), through Decision 2025/931 and Regulation 2025/932.

Extension of list of vessels subject to EU port ban and ban on a broad range of activities of services (Annex XLII of Regulation 833/2014): 189 vessels that are part of Russia’s shadow fleet have been designated.

Extension of list of parties subject to enhanced export-related restrictions on dual-use and advanced technology items (Annex IV of Regulation 833/2014): 31 entities have been added to Annex IV of Regulation 833/2014, including 18 in Russia, but also 13 in Serbia, Türkiye, the UAE, Uzbekistan, and Vietnam, due to their role in the circumvention of export-related restrictions.

Extension of list of advanced technology items subject to export-related restrictions (Annex VII of Regulation 833/2014): Chemical precursors to energetic materials and spare parts and components for machine tools have been added to the list of advanced technology items subject to export-related restrictions.

The following tariff codes are concerned:

Extended exemption for Sakhalin-2 Project: The exemption from the oil price cap for the transport of crude oil originating in the Sakhalin-2 Project in Russia to Japan is extended until 28 June 2026.

2. SANCTIONS ADOPTED BY THE UK

On May 20, the United Kingdom announced sanctions on 100 new sanctions targets across the Russian military, energy, financial sectors and those involved in Russia information operations.

Asset freezes: The UK imposed asset freezes and restrictions on trust services on 20 individuals and 62 entities, including:

• Parties involved in supply chains for Russian weapons systems, such as Iskander missiles.
• 46 financial institutions, including the St. Petersburg Currency Exchange (JSC SPCEX), the Non-bank Credit Organization Joint-Stock Company Petersburg Settlement Center (JSC PSC), and the State Corporation Deposit Insurance Agency (DIA), which insures Russian banks. The Office of Financial Sanctions Implementation has issued General Licence to authorise wind down of positions involving JSC SPCEX and JSC PSC (INT/2025/6275812) and the payment of insurance premiums to DIA (INT/2025/6279615).
• John Michael Ormerod, a British national who allegedly procured ships for Russia’s shadow fleet, and two Russian captains of shadow fleet tankers.
• 14 members of the Social Design Agency (SDA), which allegedly carries out Kremlin-funded information operations.

Ship specifications: The UK imposed shipping sanctions on 18 more ships in the shadow fleet carrying Russian oil, following the Prime Minister announcing 110 shadow fleet related sanctions earlier this month.

3. WHAT'S NEXT?

While actions that may be taken on the other side of the Atlantic are difficult to predict, the EU and the UK already stated on May 12, in the Weimar+ format, that they "agreed to pursue ambitious measures to reduce Russia’s ability to wage war by limiting Kremlin revenues, disrupting the shadow fleet, tightening the Oil Price Cap, and reducing [their] remaining imports of Russian energy."

On May 16, even before the formal adoption of the 17th sanctions package, Commission President von der Leyen announced that the EU was already working on an 18th sanctions package.

This package is presented as more ambitious, with proposals to: (i) sanction Nord Stream 1 and Nord Stream 2; (ii) designate additional vessels of Russia's shadow fleet; (iii) lower the oil price cap; and (iv) increase sanctions on the Russian financial sector.

Likewise, when announcing its May 20 sanctions, the UK indicated that it was working with its partners to "tighten the Oil Price Cap, further restricting critical oil revenues for Putin’s war machine."