EU Adopts its 15th Sanctions Package Against Russia

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On December 16, 2024, the EU adopted its 15^th sanctions package of economic and individual restrictive measures (sanctions) against Russia.

The measures were adopted through (i) Council Regulation (EU) 2024/3189 of 16 December 2024 amending Regulation (EU) No 269/2014 and (ii) Council Regulation (EU) 2024/3192 of 16 December 2024 amending Regulation (EU) No 833/2014.

We outline below the main elements of the sanctions package:

New designations

A total of 84 additional listings, comprising 54 individuals and 30 entities, were imposed. In the same effort already undertaken with the 14^th sanctions package, new listings touch upon various sectors of the Russian Federation economy, including military companies, companies active in space engineering, in the chemical sector or in the explosives sector and leading Russian energy companies.

Moreover, the designations extend to seven Chinese persons and entities (3 designations for facilitating the circumvention of EU sanctions and 4 linked to the supply of sensitive drone and microelectronic components to the Russian military industry) as well as two senior officials from the Democratic People's Republic of Korea linked to the deployment of North Korean troops to Russia. This represents the first time that the EU imposed fully fledged sanctions (travel ban, asset freeze, prohibition to make economic resources available) on Chinese actors for supplying components in support of Russia’s war effort.

Combating circumvention

The EU has extended the list of vessels subject to a ban from Member States’ ports and locks access, as well as a ban on the provision of a broad range of services related to maritime transport which now comprises 79 entries. The 52 vessels added to the list are part of Russia’s shadow fleet and are listed because they were engaged in high-risk shipping practices such as transporting Russian oil or petroleum products, arms deliveries or grain theft, or they supported the Russian energy sector.

Protection of EU operators

The EU has provided a prohibition to recognize or enforce in the EU some specific rulings issued by Russian courts on the ground of the Arbitration Procedure Code of the Russian Federation, in order to protect EU operators from the recognition of illegally awarded damages in Russia.

Under Article 248 of the Arbitration Procedure Code of the Russian Federation, Russian courts have prohibited EU companies from initiating or continuing proceedings in foreign courts against Russian companies against the threat of disproportionately high financial penalties in the event of non-compliance.

EU Central Security Depositories-related measures

It is provided that a National Competent Authority (NCA) may authorize the release of cash balances frozen by a central securities depository (“CSD”) and attributable to the Russian National Security Depository (“NSD”) or another designated entity on the following conditions:

1. the CSD concerned maintains an account or accounts with NSD;
2. NSD or another designated entity maintains an account or accounts with the CSD holding the cash balance to be released;
3. NSD has debited an amount from the accounts referred to in point (i) pursuant to a law, decree, regulation, judicial or administrative decision or any other measure, directly or indirectly attributable to the Russian Federation, without the prior consent of the CSD concerned;
4. the released cash balance is to be used by the CSD concerned to meet its legal obligations towards its participants and does not exceed the debited amount referred to in point (iii); and
5. the released cash balance is not made available to a designated person or entity.

The Commission has clarified that the latter derogation is necessary in the context of increasing litigation and retaliatory measures in Russia that enable certain designated entities and their underlying clients to seize assets of CSDs in the Union that are held in Russia without the prior consent of those depositories.

Moreover, the EU has provided for the non-liability of EU CSDs, its directors or employees for their actions in compliance with Reg. 833/2014, as long as they acted in good faith and unless it is proved that such action was a result of negligence.

Trade-related measures

The list of entities subject to stricter export restrictions for dual-use goods and technology, and advanced technology items, due to their support of Russia’s military and industrial complex in its war against Ukraine and their help in circumventing EU sanctions has been expanded by including 32 new companies (20 Russian firms, 7 under Chinese/Hong Kong jurisdiction, 2 from Serbia, and 1 each from Iran, India and United Arab Emirates).

Divestment derogations

With the new package the EU has provided for specific derogations to asset freeze measures under Reg. 269/2014 for the sale and transfer, by June 30, 2025, of proprietary rights directly or indirectly owned in a EU entity by one of the following designated individuals:

• Mr. Arkady Romanovich Rotenberg (entry n. 92 of Annex I of Reg. 269/2014);
• Mr. Gennady Nikolayevich Timchenko (entry n. 694 of Annex I of Reg. 269/2014); and
• Mr. Boris Romanovich Rotenberg (entry n. 920 of Annex I of Reg. 269/2014).

Moreover, the validity period of a high number of derogations (subject to NCA authorization) has been extended to December 31, 2025. Among the derogations involved:

• the derogation to the prohibition to engage in any transaction with listed entities under article 5aa of Reg. 833/2014 entailing the possibility of engaging in (i) transactions, including sales, which are strictly necessary for the wind-down of joint ventures or similar legal arrangements concluded before March 16, 2022, involving an listed entity; and (ii) transactions which are strictly necessary for the divestment and withdrawal of listed entities from a EU entity;
• the derogation to the prohibition to satisfy any claims by Russian entities in connection with any contract or transaction the performance of which has been affected, directly or indirectly, in whole or in part, by the measures imposed under Reg. 833/2014 when strictly necessary for the divestment from Russia or the wind-down of business activities in Russia; and
• the derogation to certain export and import restrictions on goods and restrictions on services when strictly necessary for the divestment from Russia or the wind-down of business activities in Russia.

Such derogation period extensions aim at providing EU operators more time to exit the Russian markets.

Further developments

On the same day of adoption of the 15^th sanction package against Russia, the EU has designated 16 individuals and 3 entities under the new regime combating Russia hybrid threats established on October 8, 2024.

In an increasingly complicated landscape, EU citizens and businesses must closely monitor this additional sanctions instrument and ensure compliance with it and the other legal instruments that make up the EU sanctions regime against Russia.