EU adopts its 16th sanctions package against Russia and tightens restrictive measures against Belarus

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On February 24, 2025, the EU adopted its 16^th sanctions package of restrictive measures (sanctions) against Russia. In addition, the EU has adopted further restrictive measures against Belarus. This latest package of sanctions came into effect on the same day.

The measures were adopted through (i) Council Regulation (EU) 2025/39o of 24 February 2025 amending Regulation (EU) No 269/2014; (ii) Council Regulation (EU) 2025/389 of 24 February 2025 implementing Regulation (EU) No 269/2014; (iii) Council Regulation (EU) 2025/395 of 24 February 2025 amending Regulation (EU) No 833/2014 (collectively as “Russia program”); (iv) Council Regulation (EU) 2025/392 of 24 February 2025 amending Regulation (EU) No 765/2006 (“Belarus program”); (v) Council Regulation 2025/398 of 24 February 2025 amending Regulation (EU) No 2022/263; and (vi) Council Regulation (EU) 2025/401 of 24 February 2025 amending Regulation (EU) No 692/2014 (“Oblasts program”).

Outlined below are the main elements of the recent action.

New designations

The EU has imposed asset freeze measures under Reg. 269/2014 against Russia on a total of 83 subjects, comprising 48 individuals and 35 entities, including some entries falling under the newly introduced listing criteria detailed below.

New listing criteria

Criteria for imposing an asset freeze under Reg. 269/2014 now also include:

persons who are part of, support, materially or financially, or benefit from, the Russian military and industrial complex, including by being involved in the development, production and supply of military equipment and technology. The same listing criterion has been introduced in the Belarus regime; and

persons who own, control, manage or operate vessels that, while carrying Russian originated or exported crude oil and petroleum products, practice irregular or high-risk practice or who provide material, technical or financial support to the operation of such vessels (so called “shadow fleet”). The EU has clarified that its aim is not only to reduce Russia's revenue from oil trade, but also to maintain maritime safety and environmental protection. However, the EU has also clarified that pilotage services necessary for reasons of maritime safety will not be banned.

Divestment derogations

The EU has extended the existing derogation 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 an EU entity by the following additional designated individuals:

• Mr. Alexander Pumpyansky (entry n. 719 of Annex I of Reg. 269/2014);
• Mr. Andrey Melnichenko (entry n. 721 of Annex I of Reg. 269/2014); and
• Mr. Viktor Rashnikov (entry n. 881 of Annex I of Reg. 269/2014).

This derogation provides for limited flexibility to allow the divestment of EU assets by specific designated individuals, while ensuring that the proceeds of such divestment remain frozen.

Furthermore, clarifications have been provided to the already existing derogation allowing for the release of frozen funds blocked due to the involvement, as intermediary bank, of a designated entity in a payment transaction to the EU from the Russian Federation by including also payments to the EU from third countries or from the EU itself.

Moreover, with the aim of further aligning the Belarus regime, the EU has introduced additional derogations to asset freezes measures under Reg. 765/2006 already existing under the Russian regime.

Best effort obligations

EU parent companies now have the “best efforts” obligation to ensure that their non-EU subsidiaries are not involved in activities that undermine the restrictive measures provided for in Reg. 269/2014. Previously, the 14^th package introduced such obligation in Reg. 833/2014 only. As a result, the Russia regime is now aligned with the Belarus regime, which also provides for such obligation in Reg. 765/2006 for both sectorial measures and asset freezes.

The EU has clarified that “if Union operators are able to and effectively assert a decisive influence over the conduct of a legal person, entity or body established outside the Union, they may incur responsibility for actions of that legal person, entity or body that undermine the restrictive measures and should use their influence to prevent those actions from occurring.”

This clarification confirms that entities under the jurisdiction of the EU (criminal jurisdiction of member states) can be held liable for actions of their non-EU subsidiaries. This represents a significant shift in the EU’s approach to sanctions enforcement, marking a departure from the EU’s longstanding position on non-extraterritoriality of sanctions. At the same time, an EU operator should not be held liable if he is not able to control its non-EU subsidiaries due to reasons that it did not cause itself, such as the legislation of a third country (e.g., if its Russian subsidiary became subject to an external administration or similar regulatory regime).

Export and transit restrictions

The following changes to the trade restrictions were made:

- the list of goods and technology which might contribute to Russia’s military and technological enhancement was extended with new Annex VII of Reg. 833/2014 and Annex Va of Reg. 765/2006 (“Advanced Goods”). Annex VII includes the following additional categories of goods:

(i) chemical precursors to riot control agent used to produce chloropicrin and other riot control agents employed as chemical weapons by Russia in violation of the Chemical Weapons Convention;

(ii) software related to Computer Numerical Control (CNC) being machine tools used to manufacture weapons, and video-game controllers employed by the Russian army to pilot unmanned aerial vehicles (UAVs or drones) on the battlefield; and

(iii) chromium ores and compounds due to their military applications;

- goods which might contribute to the enhancement of Russian industrial capacities per Annex XXIII of Reg. 833/2014 by including items such as chemicals, some plastics and rubbers. In this respect, the EU has also provided for a temporary exemption for the execution of existing contracts until 26 May 2025 and certain specific derogations (subject to competent authorities’ authorization) in relation to detailed CN codes and specific purposes; and

- goods which might contribute to the enhancement of Belarussian industrial capacities per Annex XVIII of Reg. 765/2006 by including items such as chemical elements, pyrotechnic articles and combustible materials.

The EU has expanded the list of goods exported from the Union (listed in Annex XIX of Reg. 765/2006) that are subject to a prohibition on transit via the territory of Belarus.

The EU has also strengthened the prohibition on the export of dual use goods and of Advanced Goods to entities listed in Annex IV of Reg. 833/2014 and in Annex V of Reg. 765/2006 due to their support to the military industrial complex by imposing a full ban on export and all related services (financing and financial assistance; brokering; technical assistance). Moreover, the list in Annex IV of Reg. 833/2014 has been further extended to include 53 new entities, including 19 entities established in Russia and 34 entities established in third countries: 25 China, including Hong Kong, 2 India, 2 Kazakhstan, 2 UAE, 1 Uzbekistan, 1 Türkiye and 1 Singapore.

No re-export to Russia and Belarus and best efforts

Starting from May 26, 2025, the obligation on EU operators to implement due diligence mechanisms, capable of identifying, assessing and mitigating the risks of re-exportation to Russia and Belarus of common high priority (“CHP”) items has been extended to other sensitive goods (as listed in Annex XLVIII of Reg. 833/2014 and in Annex XXXI of Reg. 765/2006). EU operators also have a corresponding best effort obligation to ensure that their non-EU subsidiaries implement the above requirements to identify and mitigate the risk of re-exportation in relation to CHP items and those additional goods. Such obligation would not apply where, due to reasons that it did not cause itself, the EU operator is not able to exercise control over its non-EU subsidiary.

Import restrictions

The EU has also extended import restrictions.

Specifically, the EU has prohibited imports from Russia and Belarus of unwrought aluminium (identified by code CN 7601). However, there is a specific exemption for a certain quantity of aluminium in order to satisfy EU needs and a derogation for the execution, until 26 February 2026, of contracts concluded before 25 February 2025.

With respect to existing import restrictions from Russia, the EU has provided for derogations from the import ban of (i) certain goods under Annex XXI (as well as from asset freeze measures on the entity JSC V.V. Tikhomirov Scientific Research Institute of Instrument Engineering) in order to allow the provision of goods and services necessary for the operation, maintenance and repair of Budapest metro line 3 cars; and (ii) certain products needed for the operation of the Druzhba pipeline.

With respect to Russian diamond import restrictions, when now importing into the EU rough diamonds a certificate clearly stating the country of mining has to be provided. Contextually and in order to allow for better coordination on the appropriate procedure at the G7 level, the entry into force of the requirement to provide traceability-based evidence for imports of polished diamonds has been postponed.

Energy-related provisions

In respect of sectorial measures targeting the energy sector, the EU has imposed:

- further restrictions on the export to Russia and Belarus of certain software related to oil and gas exploration and the related services and intellectual property rights (IPRs). Moreover, the EU has provided for certain derogations and a temporary exemption from such ban for the execution, until 26 May 2025, of contracts concluded before 25 February 2025;

- a prohibition on the temporary storage and on the placement under the free zone procedure in the EU of Russia’s originated or exported crude oil or petroleum products that will be listed in Annex XXV of Reg. 833/2014. When the annex will be populated, some specific exemptions will apply; and

- the prohibition to provide goods, technology, and services for the completion of Russian LNG projects (i.e., plant, terminals) or crude oil projects (i.e., exploration and production), such as the Vostok oil project.

Derogations to ensure energy supply needs of Member States

In order to ensure and protect the security of supply of Member States, it has been provided that:

- national competent authorities may authorize the sale, supply, transfer or export - from Slovakia to Hungary and vice versa - of Russian petroleum products deriving from crude oil or petroleum delivered in Member States under the pipeline delivering exemption, which is otherwise prohibited;

- the prohibition on reloading services for the purposes of transshipment operations of Russian liquefied natural gas (LNG) does not apply to transshipment operations necessary for its transport between ports of the same Member State, including from the mainland of a Member State to its outermost regions; and

- the competent authorities of a Member State that is not connected to the interconnected natural gas system may authorize - by way of derogation from the prohibition to import Russian LNG through Union LNG terminals that are not connected to the interconnected natural gas system – the purchase, import or transfer of Russian LNG from a terminal located in another Member State that is connected to the interconnected natural gas system in order to ensure its energy supply.

Shadow fleet

The EU has added 74 vessels to the existing list of vessels subject to port access bans and prohibitions on a wide range of maritime transport services (i.e., flag registration, technical assistance, bunkering, ship supply services, crew changes services, cargo loading and discharge services, fendering, and tug services). This brings the total number of listed vessels to 153.

This measure targets non-EU tankers that are part of the so-called “shadow fleet,” which, according to the EU, are involved in circumventing the oil price cap mechanism or supporting the energy sector of Russia, or vessels that are responsible for transporting military equipment for Russia.

Aviation sector

The EU has extended the ban to take off, land in or overfly the territory of the Union under Reg. 833/2014.

The list of operators subject to such ban will also include: (i) third-country air carriers operating domestic flights within Russia; (ii) air carriers selling, supplying, transferring or exporting, directly or indirectly, aircraft or goods and technology suited for use in aviation or the space industry as well as jet fuel and fuel additives to a Russian air carrier or for flights within Russia, as well as to any entity owned or controlled by such air carrier.

However, a specific authorization mechanism (derogation) from such ban has been provided for certain drone operations destined for recreational purposes.

Russian infrastructure

The EU has prohibited any transaction with certain listed ports, locks and airports in Russia that are allegedly used for the transfer of UAVs, missiles and related technology and components to Russia, or for the circumvention of the oil price cap or other restrictive measures. This ban includes access to listed infrastructure facilities and the provision of any services to vessels or aircrafts.

Transport by road

In order to minimize the risk of circumvention, any legal person which was already admitted as an EU transport undertaking before 8 April 2022 is prohibited from making any changes to its capital structure that would increase the percentage share owned by a Russian or Belarus natural or legal person.

This prohibition does not apply when, following the transaction, the Russian/Belarus percentage share remains below 25%, being the threshold that would trigger the prohibition for road transport undertakings to operate transport in the EU.

Finance & Banking

Under the Russia sanctions regime, the EU has:

- imposed a transaction ban against financial institutions due to their use of the SPFS of the Central Bank of Russia;

- imposed a transaction ban on credit or financial institutions or crypto-asset service providers involved in activities facilitating certain prohibited trades, frustrating the shadow fleet related measures or circumventing specific prohibitions. However, the list of entities subject to such restrictions has not yet been populated; and

- extended the list of SWIFT-excluded banks to include 13 regional banks considered to be important for the Russian financial and banking systems.

Moreover, the EU has envisaged a derogation from the prohibition on accepting deposits over EUR 100,000 from Russian natural or legal persons to allow the restructuring or liquidation of entities associated with the designated entity VTB Bank.

For the Belarus regime, the EU has extended the prohibition on accepting deposits over EUR 100,000 imposed on Belarussian natural or legal persons as well as third-country entities owned more than 50 % by Belarussian nationals or natural persons residing in Belarus.

Moreover, mirroring the already existing provisions of the Russia sanctions package, the EU has introduced:

- the prohibition to provide crypto-asset wallet, account or custody services to Belarussian nationals or natural persons residing in Belarus, or legal persons established in Belarus; and

- as from 26 March 2025, the prohibition to allow Belarussian nationals or natural persons residing in Belarus to directly or indirectly own or control or to hold any posts in the governing bodies of a crypto-asset service provider incorporated or constituted under the law of a Member State.

Such prohibitions will not apply to EU, EEA or Swiss nationals or to natural persons having a temporary or permanent residence permit in such jurisdictions.

Restricted services

The EU has included construction services, including civil engineering works, among the listed services whose provision is prohibited to the Government of Russia and entities in Russia.

The same prohibition also applies to the Republic of Belarus, its government, its public bodies, corporations or agencies as well as to any natural or legal person acting on their behalf or at their direction.

Moreover, it has been clarified that the sale, license or transfer in any other way of IPRs or trade secrets related to that software for the management of enterprises and software for industrial design and manufacture is prohibited.

Broadcasting ban

The EU has added some entries to the list of entities subject to a broadcasting ban. In line with the freedom of expression and information envisaged in the EU Charter of Fundamental Rights, the measures should not prevent listed outlets and their staff from carrying out other activities, such as research and interviews.

Reporting requirements

The EU has announced that Member States will structure a reporting mechanism for exports of dual use goods and Advanced Goods exported to Russia and Belarus under the two remaining exemptions for humanitarian and medical purposes.

With Directive 2024/1226 of the European Parliament and of the Council (which will have to be implemented by Member States by May 20, 2025), the violation of EU restrictive measures was added to the list of predicate offences of Directive (EU) 2018/1673 of the European Parliament and of the Council on combating money laundering by criminal law. As a result of that addition, and pursuant to AML reporting obligations under Directive (EU) 2015/849 (“AML Directive”), as from May 2025, obliged entities will be required to report to national Financial Intelligence Units (FIUs) all suspicious transactions related to suspected criminal activity linked to the violation of EU restrictive measures.

For the purposes of this reporting requirement, “obliged entities” shall be understood as those falling under the scope of article 2 of the AML Directive.

Protection of EU operators

Both in the context of sectorial measures and asset freezes, EU operators have already been granted the right to claim damages in EU courts for losses incurred due to claims made by:

a) designated persons/entities under Reg. 269/2014 and Reg. 765/2006;

b) any person, entity or body acting through or on behalf of a designated person;

c) entities subject to sectorial measures under Reg. 833/2014 or Reg. 765/2006 and their subsidiaries;

d) any other Russian or Belarus person, entity or body; and

e) any person, entity or body acting through or on behalf of one of the persons, entities or bodies referred to in points c) and d) above.

This right of protection, with the new package, has been extended to losses suffered by entities owned or controlled by EU operators and therefore not only to those suffered directly by them. In the same effort of protection, it is now possible for EU operators to recover such losses either by suing the person/entity that filed the claim from which such losses derive, or by suing the person/entity that controls them.

Furthermore, a forum necessitatis provision has been included. This means that where no court of a Member State has jurisdiction, a claim for damages brought by an EU operator or its subsidiary may be heard by a court of a Member State provided that the case has a sufficient connection with the Member State of the court concerned, i.e., the claimant is domiciled or incorporated under the law of that Member State.

Oblasts regime alignment

The Oblast regime has been strengthened and updated with the EU’s 16^th package of sanctions for alignment with the Russia and Belarus regimes.

Key changes include:

- export bans on banknotes in EU Member States’ currency;

- export bans on high-risk goods and technologies (including cars and car parts, battlefield goods, electronics, machinery, and aircraft parts);

- alignment with the prohibition on the provision of restricted services and software already included in the other regimes. Notably, no derogation for intra-group services has been provided for in the Oblasts regime;

- introduction of the best effort obligations;

- alignment of the formulation of the anti-circumvention and non-liability clauses;

- alignment to the mechanism of protection for EU operators from damages deriving from claim brought by certain persons/entities; and

introduction of reporting requirement of EU restrictive measures violations for obliged entities under Article 2 of AML Directive.

In this respect, it has been clarified that - in accordance with national administrative law or with other relevant national law or rules - national authorities can take into account the voluntary, complete and in due time disclosure of violations of EU restrictive measures as mitigating measures for penalties.