18th package of EU sanctions against Russia

Key takeaways

On 18 July 2025, the EU adopted its 18th package of sanctions against Russia. According to the European Commission, the measures aim to “cut Russia’s energy revenues, hit its banking sector, further weaken its military-industrial complex, strengthen anti-circumvention measures, and hold Russia accountable for its crimes against Ukrainian children and cultural heritage.” In parallel, the EU has introduced further measures targeting Belarus.

The key developments are summarised below.

 

Russia-Ukraine regime (Council Regulations (EU) 269/2014 and 833/2014)

New asset freeze measures

Council Regulation (EU) 2025/1494 amends Council Regulation (EU) 833/2014 to introduce asset freeze measures on 14 individuals and 41 entities, targeting actors responsible for “actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine”.¹ Designations include:

• Companies and individuals involved in the Russian shadow fleet (including a vessel captain and flag registry operator).
• Traders of Russian crude oil.
• A major Indian refinery owned by Rosneft.
• A Russian LNG company.
• Several entities supplying Russia’s military-industrial complex.
• An individual involved in the “indoctrination of Ukrainian children”.²
• Several “Russian proxies in occupied territories, including a person responsible for manipulation of Ukrainian cultural heritage, another leading Russian businessperson, and a prominent Russian propagandist”.³

Energy measures

Council Regulation (EU) 2025/1494 amends Council Regulation (EU) 833/2014 to:

• Lower the oil price cap for Russian crude from USD60 to USD47.6 per barrel, and introducing an automatic and dynamic review mechanism so that the cap remains at least 15% below the average Urals price over the preceding six months. This procedure is administered by the European Commission. A transition period of 90 days for existing compliant contracts has been inserted.
• Impose a full transaction ban on the Nord Stream 1 and Nord Stream 2 pipelines, prohibiting any activity that could contribute to their operation or future use.
• Extend the port access and service bans to an additional 105 vessels linked to Russia’s shadow fleet, bringing the total number of tankers affected to 444.
• Introduce a new import ban on refined petroleum products made from Russian crude oil and processed in third countries (excluding Canada, Norway, Switzerland, the UK and the US).
• Remove the oil import exemption previously granted to Czechia.

Banking measures

The new package upgrades the previous financial messaging ban to a full transaction ban for 22 additional Russian banks, bringing the total number of Russian banks targeted by the transaction ban to 45.

The measures also:

• Widen the transaction ban to target third-country financial institutions, including crypto-asset service providers, that have been identified as supporting Russia’s war effort or circumventing EU sanctions (including via the Russian SPFS financial messaging system).
• Impose a transaction ban on the Russian Direct Investment Fund (RDIF), its sub-funds and certain companies in which it has invested. The measure extends to financial service providers supporting RDIF, with four such companies already listed.
• Introduce a new ban on the sale, supply, transfer or export of software with certain uses in the banking and financial sector as well as software management systems, including online and mobile banking, loan management, ATM and point of sale (POS) integration, regulatory reporting, and investment banking (with a wind-down period ending on 30 September 2025 for contracts signed before 20 July 2025).

Export and trade restrictions

Council Regulation (EU) 2025/1494 adds 26 new entities (15 Russian, 11 from China, Hong Kong and Turkey) to Annex IV of Council Regulation (EU) 833/2014 (which “lists natural or legal persons, entities or bodies which are military end-users, form part of Russia’s military and industrial complex or which have commercial or other links with or which otherwise support Russia’s defence and security sector”). The 26 entities have been added due to their involvement in the circumvention of export bans. Their addition means it is prohibited to sell, supply, transfer or export dual-use goods and technology to them, and precludes the possibility of obtaining a licence to sell, supply, transfer or export certain other categories of goods and technology to them.

Further restrictions include:

• Additions to the list of items that are subject to trade restrictions on the basis they might contribute to Russia’s military and technological enhancement or the development of its defence and security sector, to include additional computer numerical control (CNC) machines, chemical precursors for missile propellants and water-jet cutting machines.
• Additions to the list of items that are subject to trade restrictions on the basis they might be goods which could contribute in particular to the enhancement of Russian industrial capacities, to include additional chemicals, machinery, and copper and aluminium products, as well as blades and chainsaws, air pumps and dryers, thermometers and other similar instruments. The new amendments include two separate wind-down periods for pre-existing contracts until 21 October 2025 and 21 January 2026, depending on the specific goods in question.
• Expansion of the Russia-transit ban to include additional goods used in the energy, construction and transport sectors.
• A new catch-all provision requiring authorisations for exports of Annex VII items (ie items that might contribute to Russia’s military and technological enhancement or the development of its defence and security sector) to any third country if the exporter has been informed by a member state competent authority that the items are or may be intended for Russia. This is a new type of measure in EU sanctions.

Russian SOE measures

The 18th package also contains a recital (Recital 12) that comments on the scope of the ban on transactions with Russian state-owned enterprises (SOEs) implemented under Article 5aa of Council Regulation (EU) 833/2014. In particular, Recital 12 states that the scope of this restriction should be interpreted in a broad manner with the objective of decoupling a Union subsidiary from a Russian parent SOE. Accordingly, per the Recital, EU subsidiaries that are following instructions, or seeking approvals, from a Russian parent generally will be considered as acting on behalf or at the direction of such entity – and therefore will themselves fall within the ambit of the transaction ban.

Against this context, Council Regulation (EU) 2025/1494 introduces a new exemption from the Russian SOE transaction ban for EU entities acting on behalf or at the direction of a targeted Russian SOE where a national competent authority has: (a) established a public trusteeship or similar public firewall; or (b) authorised a similar firewall measure on the relevant entity.

Investor-state dispute measures

In a continued effort to protect EU sanctions from challenges in investor-state arbitration, new measures prohibit member states from recognising or enforcing orders (or similar) pursuant to investor-state dispute settlement proceedings in connection with EU sanctions, save where such orders (or similar) are issued by a court or in proceedings of an EU member state. The new measures also allow for member states and/or the EU itself to recover damages in EU court proceedings for costs arising as a consequence of an investor-state dispute settlement in connection with EU sanctions (under certain conditions).

 

Belarus sanctions regime (Council Regulation (EC) 765/2006)

Council Regulation (EU) 2025/1472 introduces further restrictive measures targeting Belarus, some of which mirror similar restrictions introduced under the Russia sanctions described above, including:

• A prohibition on the import of military goods and technology from Belarus.
• Full transaction bans for certain Belarusian financial institutions.
• New export restrictions on items used in Belarus’s military and industrial sectors, including dual-use items, chemicals, CNC machines and components for propellants.
• Introduction of a mechanism for national authorities to require authorisations for indirect exports to third countries where Belarusian end-use is suspected and the exporter is informed of this.
• Provisions to protect against orders issued in investor-state dispute settlement proceedings in connection with EU sanctions, save where issued by an EU member state.

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¹Regulation - 269/2014 - EN - EUR-Lex
²EU adopts 18th package of sanctions against Russia
³Ibid