[co-author: Florence Yiu, Vittorio Santaniello]
Key takeaways
The EU’s 16th sanctions package on Russia represents a significant expansion of measures, including additional restrictions on Russian banks, further oil and gas related restrictions, and new export and import restrictions.
The updated UK sanctions include new designations targeting Russia's military supply chains as well as political figures.
On 24 February 2025, both the EU and the UK introduced new sanctions.
EU
The EU’s 16th sanctions package introduces significant changes to the EU's Russia and Belarus sanctions regulations.
Notably, the EU has strengthened several trade sanctions. These include export restrictions such as an expanded ban on exporting industrial goods of military significance and an expanded export prohibition on dual-use and strategic goods. The trade sanctions measures introduced also include further restrictions on the import of primary aluminum.
Heightened due diligence obligations have been introduced for EU operators, with new requirements to prevent goods from reaching Russia and additional “best efforts” clauses requiring EU parent companies to ensure their non-EU subsidiaries do not undermine EU sanctions restrictions.
A number of sector-specific restrictions were also introduced in the 16th package. Energy measures include a ban on the temporary storage of Russian crude oil in EU ports and restrictions on providing goods and technology for Russian energy projects, while financial sector measures introduced a regime to target Russian institutions and crypto asset providers circumventing sanctions.
The sanctions package also includes new transport and infrastructure measures, a range of new asset-freeze designations, including 83 persons/entities subject to restrictive measures for supporting Russia’s military complex, and the adoption of similar sanctions against Belarus.
Certain EU sanctions targeting Syria's economy have been suspended.
UK
The UK, on the same day, also updated its sanctions regulations to include new designations, mainly targeting Russia’s military supply chains and political figures. Notably, the UK package included the designation of Kyrgyzstan-based OJSC Keremet Bank, a non-Russian financial institution carrying on business in the Russian financial sector.
A list of links to the new regulations and designations is available at the end of the overview.
Chapter 1 - Overview of the 16th sanctions package
The EU introduced additional export and import restrictions, expanded due diligence requirements, and new measures affecting the energy and financial sectors. Transport restrictions have been strengthened, and new designations have been made targeting individuals and entities involved in Russia's war economy. Similar sanctions have also been imposed on Belarus, bringing the EU's Belarus sanctions regime more in line with its Russia regime.
Russia
Key measures include:
Export restrictions
- Expansion of the export ban on industrial goods, specifically targeting minerals, chemicals, steel, glass materials, and fireworks, of military significance;
- Expansion of the export ban for dual-use and strategic goods to all destinations for entities or bodies listed in Annex IV which are military end-users, form part of Russia’s military industrial complex or which have commercial or other links with or which otherwise support Russia’s defence and security sector; and designation of additional 53 entities under AnnexIV;
- Exceptions to the export ban for dual-use and strategic goods have been reduced, and Member States must adopt new reporting obligations for the application of medical and pharmaceutical exemption;
- Expansion of the transit ban via Russia for various industrial items and machinery; and
- New and extended licensing grounds for the export of specified goods, including certain electronic devices and food products.
Import restrictions
- Ban on EU imports of primary aluminum from Russia;
Increased due diligence obligations
- Extension of due diligence requirements for EU operators to prevent certain goods and technology from reaching Russia and to ensure their subsidiaries do the same; and
- Extension of the “best efforts” clause on non-EU subsidiaries of EU companies to activities concerning sanctioned persons listed in Regulation 269/2014.
Energy measures
- Ban on the temporary storage of Russian crude oil and petroleum products in EU ports;
- Prohibition on providing goods, technology, and services to complete Russian energy projects, including crude oil projects; and
- Extension of software export restrictions to include oil and gas exploration software for Russia.
Financial sector measures
- Addition of 13 financial institutions to the list of entities prohibited from accessing EU financial messaging services;
- Addition of 3 Russian banks to the transaction ban for circumventing EU sanctions using the Financial Messaging System of the Central Bank of Russia; and
- Extension of transaction bans to financial institutions and crypto asset providers to be listed in Annex XLV that are involved in circumventing the Oil Price Cap or facilitating transactions with listed shadow fleet vessels.
Transport and infrastructure measures
- Extension of the flight ban to third-country carriers operating domestic flights within Russia or supplying aviation goods to Russian airlines or for domestic flights to be listed in Annex XLVI;
- Limitation on Russian ownership of EU road transport undertakings to 25% or below;
- Ban on EU operators from providing construction services in Russia including civil engineering works; and
- 74 additional vessels added to Annex XLII, which are subject to broad transaction restrictions, bringing the total number of listed vessels to 153
New designations for asset freezing measures
- Designation of 48 individuals and 35 entities (including one from China, one from Belarus, and one from Türkiye) supporting Russia’s military complex, active in sanctions circumvention, Russia’s crypto asset exchange and the maritime sector. These are now subject to an asset freeze and prohibition on making funds and/or economic resources available to them;
Litigation and damages
- Expansion of the scope of the rights to claim damages under Article 11a and 11b; and
- Provision allowing the courts of a Member State to hear claims for damages suffered due to that regulation in cases where no court of a Member State has the required jurisdiction. The case must have a sufficient connection with the Member State of the court in question.
Additional measures
- Suspension of 8 additional media outlets from broadcasting activities; and
- Addition of new provisions empowering information sharing among Member States and non-EU countries.
Belarus
The EU has adopted new sanctions against Belarus mirroring certain provisions of the 16th sanctions package against Russia. These include:
- Expanded restrictions on dual-use and advanced technology goods export;
- Ban on primary aluminum imports;
- Expanded anti-circumvention measures; and
- New service prohibitions in line with amendments to Russia sanctions.
Non controlled regions of Ukraine and Crimea
The sanctions regimes concerning (a) Crimea and Sevastopol and (b) the non-government-controlled areas of Donetsk, Kherson, Luhansk and Zaporizhzhia oblasts are also strengthened in the 16th sanctions package, particularly to address circumvention.
Key changes include:
- Service bans on providing accounting, auditing, bookkeeping or tax consulting services, business and management consulting and public relations services, legal advisory services, market research and public opinion polling services, technical testing and analysis services, software for the management of enterprises or for industrial design and manufacture, and related technical or financial assistance and brokering services;
- Widened export bans on high-risk goods and technology such as cars and car parts, battlefield goods, electronics, machinery and aircraft parts; and
- "Best efforts" obligations on EU entities to ensure that their non-EU subsidiaries do not participate in activities that would undermine restrictions against these territories.
Chapter 2 - Overview of the new UK Russia sanctions
On 24 February 2025, the UK introduced a new package of sanctions designations, described by the UK government as its "largest sanctions package against Russia since 2022". 107 individuals, entities and ships were added to the UK's sanctions list. These designations target:
- Russian military supply chains, and sources of military finance;
- Foreign Financial Institutions: supporting Russia’s war machine;
- Individuals involved in managing critical sectors of Russia’s economy;
- Suppliers of Military Equipment. These suppliers are based outside Russia, in countries such as Central Asia, Turkey, Thailand, India, and China;
- North Korean Officials; and
- 'Shadow fleet' ships used by Russia to sell oil and avoid the oil price cap.
Chapter 3 - Suspension of certain Syria sanctions
On 24 February 2025, the EU also suspended the restrictive measures on key sectors of the Syrian economy, as part of the EU's efforts to support a political transition and recovery within Syria. Key updates include the suspension of import restrictions on oil from Syria andexport restrictions on jet fuels, fuel additives, and oil and gas-related technology from the EU to Syria. Exemptions to the prohibition on establishing banking relations between Syrian banks and Member State financial institutions were also introduced. All other prohibitions and restrictions remain in place. They include individual asset freezing measures for persons connected to the former al-Assad’s regime or active in the chemical weapons sector and illicit drug trade, as well as several sectoral measures, especially on arms trade and dual-use goods.
Chapter 4 - Annex – List of new sanctions regulations published on 24 February 2025
Next Steps
Given the broad scope of the EU’s 16th sanctions package and its significant impact across various industries, such as pharmaceuticals, energy, financial services and tech, it is essential that companies undertake a thorough review of their operations to ensure ongoing compliance with the EU's updated sanctions regime. Such a review may also identify key opportunities arising from the updated sanctions package, such as the use of widened licensing grounds for the export of certain goods.
The extension of the "best efforts" obligation on EU companies with non-EU subsidiaries, has further implications for non-EU companies operating outside of the EU. Such companies should also therefore review their activities in light of the EU's 16th sanctions package.
Companies should also review the UK's updated sanctions designations in order to ensure that ongoing operations do not breach UK sanctions in light of this.
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