EU adopts its 21st sanctions package against Russia and Belarus

Summary of key new EU sanctions measures

The 21^st package introduces 218 new designations - comprising 48 individuals and 170 entities - making it the most extensive designation exercise in the last four years.

1. Financial Services, Banking and Crypto

• Banking sector: 94 new banks and major financial institutions have now been made subject to asset freeze restrictions, along with a senior figure within Russia’s banking establishment. In addition, 33 further Russian credit and financial institutions are now captured by the transaction ban.

• Circumvention via non-Russian banks: Transaction prohibitions now capture a Kyrgyz bank with links to Russia’s SPFS messaging infrastructure, together with 3 additional non-Russian banks identified as enabling evasion of existing sanctions. Separately, 4 designations target participants in the cross-border A7 network, notably including newly identified connections to Africa.

• Crypto-asset services: 14 crypto-related service platforms have been brought within the scope of the transaction prohibition, with registered locations spanning Georgia, Panama, the UAE, the Marshall Islands, Kyrgyzstan, and Belarus. In a notable first, the package establishes the legal framework for a possible third-country blanket ban on crypto-asset services, granting the EU authority to block all transactions between an EU-based operator and any crypto provider used by Russia. This constitutes a qualitative shift in the EU’s regulatory posture toward digital assets, requiring EU crypto-asset service providers to deploy substantially enhanced jurisdictional screening and counterparty transaction monitoring.

2. Energy

• Oil price cap: Automatic adjustment of the oil price cap mechanism has been suspended until 15 July 2027, in order to maintain constraints on Russian oil revenues during the exceptional market disruption arising from the Strait of Hormuz closure. A mid-period review of this suspension remains contemplated.

• Shadow fleet: Existing prohibitions have been broadened to encompass vessels that supply bunkering or other ancillary services to the shadow fleet. 41 additional vessels have been designated, with the new listings focused on non-EU tankers that facilitate price cap evasion, bolster Russia’s energy sector, or carry military materiel and unlawfully expropriated Ukrainian grain. 8 entities and 1 individual connected to the shadow fleet ecosystem have also been listed, primarily for carrying out irregular shipping practices. Among them are operators acting for Russia’s major oil producers and, in an unprecedented step, a Russian crewing agency. By reaching into the service-provider layer, these designations amplify compliance exposure throughout the maritime logistics chain - especially where vessel nomination processes, insurance coverage, or beneficial ownership arrangements lack transparency or are prone to restructuring.

• Oil sector and refineries: Designations include 3 Russian refineries, a major Belarusian refinery, and an entity engaged in the domestic Russian distribution of Belarusian petroleum products. Notably, the new package has created a new transaction ban mechanism to prohibit transactions with listed refineries in Russia or in third countries that process or refine Russian-origin crude oil or petroleum products or are involved in circumvention. As part of this new mechanism, Kulevi Oil Refinery, a Georgian refinery involved in trading and refining Russian oil, has been subjected to a transaction ban (coming into force on 25 January 2027 – i.e. with a 6-month delay). By 25 October 2026, the European Commission will consider whether this transaction ban should be maintained. In other words, if Kulevi severs its ties to Russian energy supplies, the transaction ban may be lifted. Additionally, 5 UAE oil trading entities have been added to the list of those subject to transaction bans for undermining the prohibition on acquiring Russian crude and petroleum products.

• Critical infrastructure: Designations now capture a significant cross-border energy supplier, PJSC “Inter RAO UES”, on the basis that it plays a significant role in a key economic sector in Russia. Transaction prohibitions have been extended to cover 2 Russian ports and 4 Russian airports. Businesses with logistics arrangements that transit or touch these facilities should undertake a prompt review of their exposure.

• LNG: Sellers of LNG tankers must now comply with a newly established notification requirement, under which they must notify the competent authority of their Member State before any sale to a third country. Concurrently, the EU has created a legal basis for future restrictions on LNG tanker sales to Russian persons, incorporating mandatory contractual safeguards against onward resale risk.

• Other revenue sources: 7 prominent gold-sector participants have been listed, alongside one of Russia’s foremost diamond enterprises and multiple entities operating in the mining and metallurgy space.

3. Export/Import

• Export restrictions: Newly prohibited items for export include nickel powders; metals and alloys employed in corrosion-resistant coatings for jet engines; beryllium powders with applications in propellants and high-performance alloys; self-adhesive films, tapes, and strips destined for aerospace and defence uses; and UAV-specific aviation components such as ground support equipment, jamming and interception systems, launch systems, servomotors, and flight termination systems for drones and missiles. A further 51 entities have been placed on the list of those subject to heightened dual-use export controls, imposing tighter export restrictions on dual-use goods and technology. These include entities situated in China (including Hong Kong), India, Kazakhstan, Kyrgyzstan, Türkiye, and the UAE.

• Import restrictions: New import prohibitions apply to categories of goods assessed as contributing substantial revenue to Russia, with a combined value estimated above €60 million. The affected products encompass copper ores, nickel ores, lead ores, precious-metal ores, unwrought zinc, alkaline-earth metals, zinc oxides, chromium oxides, glassware, imitation pearls, and automotive parts.

4. Belarus

Measures directed at Belarus within the package are designed to parallel those applicable to Russia. They include import prohibitions on goods that generate significant revenues for the Belarusian regime, export controls targeting the military-industrial sector, and reinforced legal protections available to EU operators.

7. Legal Protection

Enhanced legal safeguards have been conferred upon EU operators facing litigation arising from compliance with EU restrictive measures. Courts within the EU and its Member States are empowered to decline recognition or enforcement of judgments from proceedings initiated before Russian courts.

Commentary

The novel reach into crypto-asset services - culminating in a legal mechanism that would permit comprehensive third-country bans on crypto providers - introduces an entirely new dimension to the regulatory landscape. Firms active in the digital asset sector will need to re-look at sanctions systems and controls to determine how new transaction bans and asset freezes can be implemented. 

By targeting service providers deep within the shadow fleet supply chain - including, for the first time, crewing agencies - the EU is increasing the risks and costs for anyone involved in sanctions evasion schemes. Vessel operators, insurers, port service providers, and logistics companies face materially heightened compliance expectations, even in the absence of any direct ownership connection to a designated person or entity.

The imposition of transaction bans on third-country refineries handling Russian crude, combined with the imposition of tighter export restrictions on dual-use goods and technologies on 51 new third-country entities, illustrates the EU’s increasing comfort with exercising its regulatory reach extraterritorially. Businesses whose supply chains run through Central Asia, the Caucasus, the Gulf region, or East Asia may need to reassess their diversion risk profiles and confirm that adequate contractual protections and end-use monitoring arrangements remain in place.

Taken together, the cumulative trajectory of these measures points toward rising expectations in the areas of counterparty due diligence, supply chain visibility, and continuous monitoring. The 21^st package consolidates the shift toward holistic, end-to-end sanctions risk management as the prevailing compliance standard, moving decisively beyond entity-level or transaction-level screening as a standalone approach. One further point to note is that within 24 hours of the adoption of the 21^st package, China swiftly responded by placing 14 EU entities – spanning the defence, semiconductor, manufacturing, and research sectors, including a university – on its Export Control List, generally prohibiting their access to PRC-origin dual-use items. As EU-China tensions escalate, multinational businesses should be alive to the implications of any such reciprocal trade controls on their supply chains.