21st Sanctions Package Against Russia: European Commission Announces New Restrictions for Energy, Finance, Crypto and Trade

The European Commission has presented a proposal for the 21st sanctions package against Russia, which may introduce new restrictions for the energy, financial, crypto-asset, trade, transport and fisheries sectors. The planned EU sanctions against Russia are intended to limit not only Russia’s ability to finance its war against Ukraine, but also sanctions circumvention mechanisms involving entities from third countries. At this stage, the Commission’s proposal is not yet binding law; however, businesses involved in international trade or cross-border operations should already monitor its potential impact on transactions, supply chains and compliance procedures.

What Does the Draft 21st Sanctions Package Against Russia Cover?

According to the announcement by the President of the European Commission, Ursula von der Leyen, the new package is intended to focus on sectors that may be of key importance to Russia’s revenues and its ability to finance the war.

New EU Sanctions Targeting Russia’s Energy Sector and Shadow Fleet

The Commission proposes a temporary suspension of the automatic adjustment mechanism for the price cap on Russian oil until January 2027. The objective is to maintain pressure on Russia’s revenues from oil exports, despite fluctuations in global energy markets.

The draft also provides for the addition of 30 further vessels to the EU list of vessels linked to the Russian shadow fleet. According to the Commission’s announcement, the new sanctions are intended to cover not only tankers transporting Russian oil, but also entities and vessels providing support services to that fleet, such as bunkering.

The Commission also announces the possibility of imposing restrictions on critical infrastructure, including ports, airports and refineries involved in the trade or processing of Russian oil, as well as restrictions on the sale of LNG tankers to Russia.

Restrictions on Banks, Crypto-Assets and Sanctions Circumvention

The second important area concerns financial services and crypto-assets. The Commission proposes extending transaction bans to 31 additional Russian banks. In addition, the sanctions would cover 20 banks, crypto companies, platforms and oil-trading entities from third countries which, according to the Commission, serviced sanctioned entities or facilitated the circumvention of restrictions.

A new element would be the possibility of introducing a full ban on the provision of crypto-asset services in relation to certain third countries, where platforms operating in those jurisdictions assist Russia in circumventing sanctions.

Trade Sanctions, Dual-Use Goods and Restrictions on the Fisheries Sector

The Commission also announces new export restrictions concerning goods and technologies used by the Russian military industry. The indicated categories include, among others, metals and alloys used in the aviation and defence sectors.

For the first time, the draft sanctions package is also expected to cover the fisheries sector. The Commission proposes significant import restrictions on certain fish products and a complete import ban on some of them, including cod. Adjustments to trade restrictions concerning Belarus have also been announced, in order to prevent Belarus from serving as a “back door” for Russian trade.

Trade Sanctions, Dual-Use Goods and Restrictions on the Fisheries Sector

Restrictions concerning drones and technologies used by the Russian military sector are also an important element of the announced 21st sanctions package. The European Commission points to the need to further limit Russia’s access to goods and technologies supporting its defence industry.

In the area of trade, the Commission proposes new export bans covering, among others, ground equipment for the operation of drones, jamming systems, launch systems and other related products. These restrictions are intended to supplement sanctions concerning metals and alloys used in the aviation and defence sectors.

In the broader political context, drones are also mentioned in connection with violations of European airspace and attacks on Ukraine. Reports on the Commission President’s speech referred, among others, to drone incidents over the Baltic states, along the EU’s eastern borders, and in Romania.

What Could the 21st Sanctions Package Against Russia Mean for Businesses?

The planned package may be relevant to businesses operating in the following sectors:

• international trade;
• transport and logistics;
• energy;
• financial services;
• fintech and crypto-assets;
• import of fish products;
• trade in industrial goods, metals, alloys and technologies that may have military or dual-use applications.

At this stage, however, businesses should not treat the Commission’s announcement as binding law. It will be crucial to determine the final wording of the regulations after their adoption by the Council of the European Union and publication in the Official Journal of the European Union. Only then will it be possible to fully assess the scope of prohibitions, exemptions, transitional periods and compliance obligations.

If adopted in the announced scope, the 21st sanctions package will be another step towards tightening the EU sanctions policy against Russia and entities supporting the circumvention of restrictions. The proposed measures targeting entities from third countries, crypto services and infrastructure used in the trade of Russian oil may be of particular practical importance.

For businesses, the most important task at present is to monitor the legislative process and prepare for a swift update of their compliance procedures. In the case of EU sanctions, the risk is not limited solely to direct relationships with Russian counterparties. Intermediaries, third-country companies, logistics operators, financial platforms and structures used to circumvent existing restrictions are becoming increasingly important.

Need Support Assessing the Impact of New EU Sanctions on Your Business?

If your company conducts cross-border business, cooperates with third-country counterparties or participates in supply chains involving industrial goods, technologies, logistics, energy, financial services, crypto-assets or dual-use products, the proposed EU sanctions against Russia may require a review of your transactions and compliance procedures.

Assess Sanctions Risk Before Proceeding with a Transaction or Delivery

Our experts support businesses in assessing sanctions risk, verifying counterparties, analysing transactions, and preparing or updating compliance procedures. We also help determine whether a planned delivery, service, payment, cooperation structure or relationship with a third-country entity may breach applicable restrictions or be affected by proposed restrictions once adopted.

Contact us if you would like to assess whether the new EU sanctions against Russia may affect your company or a specific transaction.