The European Commission has welcomed the adoption of the 20th package of sanctions against Russia by EU Member States, which puts further pressure on Russia to engage in negotiations on terms acceptable to Ukraine. The new sanctions are said to have a strong anti-circumvention angle and include energy measures, as well as the activation for the first time of the ‘anti-circumvention’ tool. This package, which targets financial services, including crypto, trade, and media propaganda, encompasses further measures for the protection of EU operators.

The newest package contains 120 additional listings, including 33 individuals and 83 entities, resulting in an asset freeze and prohibition of making funds and economic resources available to them, alongside travel bans for individuals. Aside from sanctions on Russian energy and military companies, and their supply chains in third countries, the EU is also imposing sanctions on oligarchs, persons involved in the abduction of children from Ukraine, propagandists, and persons responsible for looting cultural heritage.

Kaja Kallas, High Representative for Foreign Affairs and Security Policy/Vice-President of the European Commission, commented: “Today we have finally broken the deadlock. On top of the €90-billion-loan for Ukraine, we have also adopted the 20th sanctions package. The EU will provide Ukraine what it needs to hold its ground while we inhibit those enabling Russia’s illegal aggression. Russia’s war economy is under growing strain, while Ukraine is getting a major boost. We must keep up this pressure until Putin understands his war leads nowhere.”

The 20th package contains multiple energy measures with 36 listings covering both the upstream and downstream segments of the Russian energy sector, entailing the exploration, extraction, refining, and transportation of oil. The shadow fleet ecosystem is seeing new constraints, as the European Union’s move aims to further reduce revenues from Russian oil exports through the listing of additional shadow fleet entities, including those operating in third countries, as well as a significant maritime insurer and 46 additional vessel listings.

With these additions, 632 vessels that are believed to belong to Russia’s shadow fleet are now listed by the EU and subject to a port access ban and a ban on receiving services, as the European Union continues its outreach to flag states to ensure that their registers do not allow these vessels to sail under their flags. While 46 vessels are added to the sanctions list, 11 ships are also delisted in this 20th package, showing that delisting is a possibility for vessels returning to compliance.

The new sanctions insert safeguards on tanker sales from the EU to prevent Russian end-use, with the dedicated due diligence by sellers, as well as a mandatory ‘no Russia’ clause to be passed on into sales contracts, anticipated to prevent usage deployment within the shadow fleet. On top of this, a new shadow fleet scrapping clause will facilitate the decommissioning or ‘recycling’ of vessels and exit from the shadow fleet.

Regarding the port infrastructure ban, the new sanctions package includes the listing of two Russian ports, Murmansk and Tuapse, as well as, for the first time, a third country port, Karimun Oil Terminal in Indonesia, for their connections with the shadow fleet and circumvention of the oil price cap. The 20th sanctions package contains the basis for a future prohibition to transport Russian oil and petroleum products, in full coordination and discussion with the G7 and the Price Cap Coalition, including G7 members and other participating countries.

The European Council will decide when the Maritime Services Ban will enter into force, considering an appropriate wind-down period to further reduce the total available capacity to transport Russian oil, hitting the country’s main source of revenue for its ‘war machine.’

There is also a new prohibition on maintenance services for Russian LNG tankers and icebreakers, which prohibits essential EU operators’ support to Russian LNG exports and further constrains the country’s ability to maintain its seaborne assets. In addition, the ban on LNG terminal services is expected to allow the European Union’s operators to terminate any long-term contracts with Russian counterparts.  

The package’s new measures extend the ban on EU operators that do any business with 20 additional Russian banks, with narrow exceptions such as for humanitarian transactions, bringing the number of the country’s banks excluded from access to the EU internal market to 70. The EU is also extending the transaction ban to four banks in Kyrgyzstan, Laos, and Azerbaijan that are believed to assist the Russian war effort by significantly frustrating sanctions or connecting to the Russian banking messaging network.

The 20th package includes a total sectoral ban on carrying out exchanges with any Russian crypto asset service provider, as well as any decentralised platforms enabling crypto trading, because of their use in circumvention. The new measures prohibit the use and support of the cryptocurrency RUBx, a rouble-backed stablecoin, as well as the digital rouble, a digital currency under development by the Central Bank of Russia, which is being set up to enable sanctions circumvention.

Maria Luís Albuquerque, Commissioner for Financial Services and the Savings and Investments Union, stated: “I welcome today’s agreement. This comprehensive package – spanning energy, finance, and trade – will further constrain Russia’s capacity to fund its brutal and illegal war. It represents another decisive step in tackling sanctions evasion, targeting financial actors and infrastructure in third countries that enable circumvention.

“For the first time, we are activating our anti-circumvention instrument to block exports of critical EU goods to a third country used to undermine our measures. The evidence is clear: our sanctions are having a real effect. Their cumulative impact is weakening Russia’s war machine, while Europe’s resolve remains firm. We will not falter, and we will not rest, until a just and lasting peace is secured in Ukraine.”

Furthermore, the package introduces new export and imports restrictions and bans, to further disrupt and weaken Russia’s military-industrial complex, consisting of new export bans to Russia on goods – from rubber to tractors, worth over €365 million; new export restrictions on items and technologies used for Russia’s military effort, such as explosives, laboratory glassware and high-performance lubricants and additives for lubricants; new restriction on provision of cybersecurity services to Russia; new import bans on metals, chemicals and minerals, not yet under sanctions, worth over €530 million; and a quota on ammonia to cap existing imports.

The 20th package further constrains the Russian military-industrial complex by designating 58 companies and associated individuals involved in the development and manufacturing of military goods, such as drones. Additionally, listings cover third-country suppliers of critical high-tech items, such as entities based in China, the United Arab Emirates, Uzbekistan, Kazakhstan, and Belarus, which have provided dual-use goods or weapons systems to the Russian military-industrial complex.

Given the European Union’s determination not to ignore cases of its sanctions being systematically circumvented by exporters in third countries that re-export sanctioned EU goods to Russia, the EU activated its anti-circumvention tool due to systematic and persistent failure by the Kyrgyz Republic to prevent the sale, supply, transfer, or export to Russia of certain machine tools and certain telecommunication equipment imported from the EU and used for the manufacturing of drones and missiles in Russia.

The latest package adds 60 entities to the list of those providing direct or indirect support to Russia’s military industrial complex or engaged in sanctions circumvention, encompassing 32 entities established in Russia and 28 in third countries, such as China, Türkiye, the United Arab Emirates, and Thailand.

New measures tackle mirror outlets that circumvent the broadcasting ban by spreading the same content online as listed propaganda media outlets, such as Russia Today and Sputnik; thus, the content of these mirror sites and domains will also be banned from distribution in the EU, facilitating the faster takedown or blocking of online sites that act as proxies or clones of official media outlets’ channels.

Last but not least, the new measures prohibit the acceptance of funding, including donations or grants, from the Russian government in the area of research and innovation, which is applicable to research institutes, higher education establishments and other bodies in the EU, as well as individuals associated with these entities.

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