July 2025 – On July 18, the European Council adopted its 18th sanctions package to be imposed on Russia for its continued war in Ukraine. The sanctions are mainly aimed at entities and activities concerning the military, energy, and banking sectors. The package also includes efforts to provide protection for Member States against investment arbitration and additional measures against the circumvention of the sanctions in place.
We summarize the key issues touched on by the new amendments
below.
Military sanctions
Measures aimed at the Russian military industrial complex and its suppliers include
- tighter export restrictions on certain dual-use goods and technologies for 26 new entities, 11 of which are located outside of Russia (i.e. in China, Hong Kong, and Turkey);
- export bans on additional items, such as computer numerical control (CNC) machines and certain chemicals;
- and full-fledged sanctions on suppliers of the Russian military industrial complex, including three entities based in China.
Energy sanctions
Efforts to curb Russia's energy revenues include
- a moving price cap on Russian crude oil 15% below of its average market price (bringing the price down from USD 60 to approximately USD 47.6), a change effective as of September 3 with a 90-day transition period;
- sanctions against the vessels of the so-called shadow fleet (non-EU tankers circumventing the oil price cap mechanism) and their operators;
- an import ban on refined petroleum productsmade using Russian crude oil and brought into the EU from third countries (however, Canada, Norway, Switzerland, the United Kingdom and the United States are exempt from this rule).
A full transaction ban on the Nord Stream 1 and 2 pipelines also enters into force, blocking the completion of the infrastructure and halting the start of its operation.
The Council also stated that products from the Vadinar oil refinery plant (the second largest in India) of Nayara Energy Ltd., an Indian oil company owned in large part by the Russian oil company Rosneft are also subject to sanctions like import bans.
Sanctions in the banking sector
Measures taken in the banking sector include
- a full transaction ban on 22 additional Russian banks;
- expanding the transaction ban on third countries' financial and credit institutions and crypto-asset service providers which frustrate EU sanctions or otherwise support the Russian war effort;
- a ban on carrying out any transaction with the Russian Direct Investment Fund (RDIF)and its sub-funds and companies, limiting the country's access to global financial markets and foreign currency.
Other measures include
- the introduction of protective restrictions concerning the investor-to-state dispute settlement (ISDS), which further protect Member States from sanctions-related claims under their bilateral investment treaties (BITs);
- a transit ban on additional items used for construction and transport, two of which are of direct relevance to the energy industry;
- and a catch-all provision for advanced technology items (such as computers, software, machine tools) addressing the risk of circumvention via third countries based on which an authorisation shall be required for the export of certain goods and technology exported to any third country other than Russia where the exporter has been informed that there is sufficient reason to suspect that the end destination of the items may be in Russia or that the end-use of the items may be for Russian entities;
- along with certain sanctions against Belarusian entities.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
