EU Expands Sanctions Regime with 18th Sanctions Package against Russia

The EU has recently published its 18th sanctions package against Russia and further expanded its sanctions program against Belarus, aligning the two regimes. 

The new sanctions against Russia include new asset freeze listings, new measures targeting Russia’s “shadow fleet” of vessels transporting oil and restrictions against the Russian banking, oil and military sectors.

Notably, the EU introduced the following EU-Russia sanctions: 

• Reduced the Oil Price Cap for Russian crude oil from 60 to 47.6 USD, and introduced an automatic average pricing mechanism ensuring the Oil Price Cap is always 15% lower than the average market price.
• Introduced an import ban on refined oil products derived from Russian crude and coming from any third country – with the exception of Canada, Norway, Switzerland, UK and US.
• Expanded the list of asset freeze listings by designating 14 persons and 41 entities, including Russian and other international companies active in Russia’s energy and oil sectors (such as (i) Nayara Energy Limited - main shareholder Rosneft - and (ii) PJSC Yakutsk Fuel and Energy Company – Russian entity in the LNG sector).   
• Expanded list of vessels of Russia’s shadow fleet subject to the port access ban: Added 105 vessels to the list of vessels subject to a port access ban and ban to provide certain maritime-related services.
• Transformed the ban on provision of specialised financial messaging services into a full transaction ban and added 22 Russian banks (such as (i) Bank Saint Petersburg, (ii) Surgutneftegazbank).
• Introduced a transaction ban targeting the Russian Direct Investment Fund (RDIF), its subsidiaries, its investments and financial institutions supporting them.
• Extended list of entities associated with the Belarusian military-industrial complex: 8 new entities have been added to the list of entities associated with the Belarusian military-industrial complex. Entities on this list are subject to tighter dual-use and military goods export licensing requirements. 
• Extended list of entities associated with the Russian military-industrial complex: 26 new entities have been added to the list of entities associated with the Russian military-industrial complex (11 of these entities are located in third countries other than Russia - 7 in China and Hong Kong, and 4 in Türkiye). Entities on this list are also subject to tighter dual-use and military goods export licensing requirements. 
• Introduced new export restrictions on additional advanced technologies.
• Introduced protective restrictions concerning the investor-to-state dispute settlement (ISDS) addressing the risk of economic damage from investment arbitrations launched by listed persons in relation to EU sanctions.

The new sanctions against Belarus further align the EU-Belarus sanctions with the EU-Russia sanctions and, like the EU sanctions against Russia, inter alia, include (i) prohibiting arms procurement from Belarus, (ii) a catch-all provision for advanced technology items, (iii) transforming the ban on specialised financial messaging services into a full transaction ban, (iv) adding measures to protect Member States from arbitration, and (v) imposing additional export restrictions on sensitive goods, technologies, and industrial goods.

As the EU enhances its sanctions regimes against Russia and Belarus, businesses should evaluate their sanctions compliance procedures to mitigate legal and operational risks.

Our EU sanctions team continues to monitor sanctions developments and is happy to support. Please reach out if you would like to discuss any of the topics discussed in this blog.