Adoption By The EU Of The 16th Sanctions Package Against Russia: Key Takeaways

The 16th package of European economic sanctions adopted and published in the Official Journal of the European Union (hereinafter the "EU") on 24 February 2025 came into force on 25 February 2025.

This 16th package of economic sanctions affects the various economic sanctions regimes adopted by the EU in response to Russia's unjustified military aggression against Ukraine:

• Regulation (EU) 833/2014 concerning restrictive measures with regard to destabilizing Russian actions in Ukraine (hereinafter, the "Russia Regulation") - as amended by Council Regulation (EU) 2025/395 of 24 February 2025;
• Regulation (EU) 269/2014 concerning restrictive measures with regard to actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (hereinafter, the "Individual Sanctions Regulation") - as amended by Council Regulation (EU) 2025/390 of 24 February 2025;
• Regulation (EU) 765/2006 concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine (hereinafter the "Belarus Regulation") - as amended by Council Regulation (EU) 2025/392 of 24 February 2025;
• Regulation (EU) 692/2014 concerning restrictive measures in response to the illegal annexation of Crimea and Sevastopol (hereinafter, the "Crimea Regulation") - as amended by Council Regulation (EU) 2025/401 of 24 February 2025;
• Regulation (EU) 2022/263 concerning restrictive measures in response to the illegal recognition, occupation and annexation by the Russian Federation of certain areas of Ukraine not controlled by the Government (hereinafter, the "Other Ukrainian Oblasts Regulation") - as amended by Council Regulation (EU) 2025/398 of 24 February 2025.

Alongside the adoption of this 16th package of sanctions, the European Commission has published a frequently asked questions (hereinafter, the "FAQ") to clarify certain provisions.

This alert (hereinafter, the "Alert") aims to provide a summary of the new measures that may impact your activities.

1. Main new amendments to combat circumvention

Alignment of the other Regulations with the Russia Regulation :
Alignment of the various sanctions regimes concerning the "best effort" obligation as provided for in Article 8a of the Russia Regulation and Article 8i of the Belarus Regulation since the 14th package of sanctions:

• Article 15a of the Regulation on individual penalties;
• Article 8a of the Crimea Regulation;
• article 13a of the Regulations other Ukrainian Oblasts.

Combating the "shadow fleet" of Russian vessels:

• Addition of 74 new vessels, bringing the total number of ships on the list to 153 (Annex XLII of the Russia Regulations). These vessels are part of the Russian "shadow fleet" or have contributed to Russia's energy revenues;
• new criterion for designation on the assets freeze list (article 3 of the Individual Sanctions Regulation): natural or legal persons, entities or bodies who own, control, manage or operate vessels carrying crude oil or petroleum products originating in or exported from Russia while engaging in illegal shipping practices or who otherwise provide material, technical or financial support for the operations of such vessels.

For reference, article 3s of Russia Regulation prohibits EU operators from providing certain services such as financing and financial assistance, including insurance and brokering, flag registration, technical assistance, bunkering, ship supply services, etc.

Targeted export restrictions :

• Addition of 53 new entities (including 35 non-Russians: Chinese or Hong Kong, Indian, Kazakh, Uzbek, Turkish, Singaporean or Emirati) to the list (Annex IV of the Russia Regulations) of entities for which export controls on dual-use goods and goods listed in Annex VII of the Russia Regulations have been tightened, because of their support for the Russian military-industrial complex or their involvement in circumventing sanctions.

2. Main new individual economic sanctions

Amendment of the Individual Sanctions Regulation:

• Addition of 48 persons and 35 entities to the list in Annex I of Individual Sanctions Regulation (list of natural or legal persons, entities or bodies covered by the freezing of their funds and economic resources and the prohibition to make funds and economic resources available to them).

New criterion for designation on the assets freeze list (article 3 of the Individual Sanctions Regulations): natural or legal persons, entities or bodies that are part of, provide material or financial support to, or benefit from, Russia's military and industrial complex, including by participating in the development, production or supply of military equipment and technology.

Alignment of the other Regulations with the Russia Regulation :
This new criterion also applies to individuals and entities that form part of, support, or benefit from the military and industrial complex of Belarus (article 2(7a) of Belarus Regulation).

3. Main new economic sanctions measures

3.1. Industry
Extension of the prohibition on importing, purchasing or transferring, directly or indirectly, goods originating in or exported from Russia that generate significant revenues for Russia, thereby enabling it to carry out its actions destabilising the situation in Ukraine to "primary" aluminium, which has been added to Annex XXI (CN code 7601) (Article 3i).

For reference, products derived from the processing of aluminium (CN codes 7605 to 7613) have been included in Annex XXI since the 12th package of sanctions (18 December 2023).

This ban will take effect gradually, with a quota mechanism:

• until 26 February 2026: subject to an import volume quota of 275,000 metric tons (Article 3i (3cg)) - 80% of imports into the EU in 2024 according to the FAQ;

FAQ clarification
This quota corresponds to 80% of the imports of primary aluminium into the EU in 2024.

• until 31 December 2026: for the performance of contracts concluded before 25 February 2025 and within the limit of an import volume quota of 50,000 metric tons (article 3i (3ch)).

Alignment of the other Regulations with the Russia Regulation :
Transposition of the prohibition to the Belarus Regulation, but the quota mechanism mentioned above is not transposed, so this ban takes immediate effect, except for the execution of contracts concluded before 25 February 2025 and until 26 May 2026 (Article 1ra(9a)).

3.2. Energy
3.2.1. Extension of the prohibition on the supply of goods, technology and services for the completion of Russian liquefied natural gas projects - Article 3t
Extension of the prohibition on selling, supplying, transferring or exporting goods or technologies as well as services to any natural or legal person, entity or body in Russia when these goods, technologies and services are intended for the completion of projects relating to liquefied natural gas (hereinafter "LNG") to projects relating to crude oil, such as production or exploration projects (Article 3t).

This prohibition also applies to any technical assistance, brokerage services, financial assistance or financial services relating to such goods, technologies or services (paragraph 2).

However, this prohibition does not apply:

• to oil production projects if regular commercial production has been established before 25 February 2025;
• until 26 May 2025 to crude oil-related projects for the execution of contracts concluded before 25 February 2025.

3.2.2. Extension of the ban on software used in Russian oil and gas exploration - Article 3
It is prohibited to sell, supply, transfer, export or make available to any natural or legal person, entity or body established in Russia software useful for Russian gas or oil exploration (article 3(1a).

The same applies to the provision of technical or financial assistance and the granting of intellectual property rights in relation to such software (paragraph 2).

Addition to the list of such software to Annex II of Russia Regulation Concerning goods and technologies whose export to Russia is prohibited due to their utility in the completion of LNG and oil projects.

The supply of such software pursuant to a contract concluded before 25 February 2025 remains possible until 26 May 2025.

Alignment of the other Regulations with the Russia Regulation :
Transposition of the prohibition to the Belarus Regulation (addition to Annex Va, Category VIII - Miscellaneous items relating to Article 1f).

3.2.3. New ban on temporary storage / placing under the free zone regime of Russian crude oil or petroleum products - article 3nb
Until now, the temporary storage and placement under the free zone procedure of Russian crude oil or petroleum products were permitted if the oil (i) complied with the oil price cap and (ii) was intended for export to a third country.

The temporary storage and placing under the free zone procedure of crude oil or petroleum products (listed in Annex XXV) originating in Russia or exported from Russia is now prohibited (article 3nb).

This prohibition applies regardless of the purchase price of the oil or the final destination of the goods.

This prohibition does not apply:

• if the goods are transported by sea originate in a third country, Russia being only the place of loading, departure or transit, provided that neither the origin nor the owner of the goods is Russian; or
• if these goods are already present in the EU on 25 February 2025 and until 26 May 2025; or
• to Member States with a derogation under Article 3m(3), point (d), and in Article 3m(4).

3.3. Transport
3.3.1. Extension of the ban on air transport
Extension of the prohibition on taking off, landing and flying over European territory (article 3d), pursuant to paragraph 1b, to:

• air carriers operating domestic flights in Russia;
• air carriers exporting or transferring goods covered by Annexes XI (aircraft parts) and XX (jet fuels and additives).

This prohibition applies to any entity owned or controlled by such carriers.

FAQ clarification
There would be no consequences for third-country airlines merely flying over Russia.

3.3.2. Extension of the ban on road transport
For reference, since the 14th package of sanctions of 24 June 2024, it is prohibited for any legal person, entity or body established in the EU after 8 April 2022 and operating in the road freight transport sector to transport goods on the territory of the EU, including in transit, if the capital of this entity is 25% or more owned by a Russian natural or legal person, entity or body (article 3l(1c)).

From now on, it is prohibited for any legal person, entity or body established in the EU before 8 April 2022 and operating in the road freight transport sector (including transit) to modify, in any way whatsoever, its capital structure if this modification leads to a Russian natural or legal person, entity or body holding 25% or more of its capital (Article 3l(1b)).

Alignment of the other Regulations with the Russia Regulation :
Transposition of this prohibition to the Belarus Regulation (article 1zc(1b)).

3.4. Finance
3.4.1. Addition of 13 financial institutions to the list of entities prohibited from providing specialised financial messaging services (SWIFT)

Addition of 13 (Russian) entities to Annex XIV. listing entities to which the provision of specialised financial messaging services is prohibited (Article 5h).

3.4.2. Banks added to the ban on transactions
Addition of 3 entities (2 Belarusian and 1 Chinese) to Annex XLIV.

It is prohibited to engage in any transaction with these entities due to their use of the Russian alternative financial messaging system SPFS (article 5ac(2))

For reference, since the 14th package of sanctions on 24 June 2024, the use of the Russian Central Bank's alternative financial messaging system (SPFS) has been prohibited for European operators (article 5ac(1)). Annex XLIV lists legal persons, entities, and bodies established outside Russia that use the SPFS, with the effect or purpose of circumventing the prohibitions set out in the Russia Regulation and the Individual Sanction Regulation.

FAQ clarification
The listed entities conduct cross-border payments and play an active role in circumventing sanctions. This measure aims to counter the expansion of commercial activities into the occupied territories.

3.4.3. Extension of the ban on transactions to financial institutions and suppliers of crypto-assets involved in circumventing the oil price cap and facilitating transactions by vessels in the shadow fleet
For reference, initially, the prohibition under Article 5ad is aimed at entities that are financial/credit institutions or entities providing services on crypto-assets, based outside Russia, involved in transactions that facilitate, directly or indirectly, the export, sale, supply, transfer or transport to Russia:

• dual-use goods and technologies;
• of certain goods or technologies for which Russia Regulation prohibits exports to Russia (Annexes VII, XI, XX and XXXV);
• common high-priority items (Annex XL); and
• firearms and ammunition.

Extension of this prohibition to financial/credit institutions or entities providing services on crypto-assets, established outside the EU (and no longer outside Russia), which:

• engage in transactions relating to the Russian shadow fleet (listed in Annex XLII); and/or
• are circumventing restrictions on the import of Russian oil and the oil price cap.

This prohibition applies to any entity acting on behalf of or at the direction of such entities.

The Russian Regulations provide for these financial/credit institutions or entities providing services on crypto-assets to be listed in Annex XLV (Parts A, B or C). However, as of the date of this Alert, no entity has been listed.

3.5. Infrastructure
Prohibition, under Article 5ae, to take part in any transaction with Russian ports, locks or airports when these are used:

• for the transfer of unmanned aerial vehicles, missiles, related technologies or their components;
• for the transport of goods and technologies useful to the defence and security sector, from or to Russia, for use in that country or for Russia's war in Ukraine;
• for the transport of certain goods originating in the EU or exported from the EU, the export of which to Russia is prohibited (Annexes XI, XX, XXIII), or goods originating in Russia or exported from Russia and imported into the EU, the import of which is prohibited (Annex XXI);
• to circumvent individual sanctions and restrictions in areas of Ukraine not controlled by the government;
• for the maritime transport of petroleum products and crude oil originating in or exported from Russia using vessels engaged in illegal shipping practices.

Addition of these 11 ports, locks and airports and the reasons for their inclusion are to the new Annex XLVII:

• six airports:
  • Begechivo International Airport;
  • Vnukovo International Airport;
  • Zhukovsky International Airport;
  • Perm International Airport;
  • Koltsovo International Airport;
  • Pskov international airport.
• two ports on the Caspian Sea: Astrakhan and Makhachkala;
• three seaports: Ust-Luga and Primorsk on the Baltic Sea, and Novorossiysk on the Black Sea.

3.6. Construction
Extension of the prohibition on providing to the Russian government or any legal person, entity or body established in Russia certain services (article 5n) to construction services.

Paragraph 2 now states that "it is prohibited to provide, directly or indirectly, construction, architectural and engineering services, legal advisory services and IT consultancy services".

Maintenance of the derogation allowing the competent authorities to authorise the provision of such a service. This authorisation may be granted only if the beneficiary of the service is a legal person, entity or body established in Russia if it is owned or controlled, exclusively or jointly, by a legal person, entity or body which is incorporated or constituted under the law of a Member State, of a member state of the European Economic Area, of Switzerland or of a partner country listed in Annex VIII (paragraph 10 point h).

Strengthening of the prohibition to sell, supply, transfer, export, or provide, directly or indirectly, software for the management of enterprises and software for industrial design and manufacture: it now also applies to intellectual property rights or trade secrets related to such software (paragraph 3a).

Alignment of the other Regulations with the Russia Regulation :
Transposition of this prohibition to the Belarus Regulations (article 1jc), the Other Ukrainian Oblasts Regulations (article 5) and the Crimea Regulations (article 2c).

3.7. Diamonds
As a reminder, Article 3p prohibits, from 1 March 2024, the purchase, import or transfer of diamonds of a weight equal to or greater than 0.5 carats or 0.1 grams per diamond when processed in a third country, consisting of diamonds originating in Russia or exported from Russia.

3.7.1. Rough diamonds
Strengthening of the traceability requirements for imports of rough diamonds (CN 7102 31 00 and CN 7102 10 00) into the EU, to be completed at the Diamond Office in Antwerp.

Previously, the traceability obligations referred to the presentation of documents attesting to the origin of imported rough diamonds, without specifying the nature of these documents.

Traceability obligations now require the presentation of a certificate under Council Regulation (EC) 2368/2002 clearly indicating the country or countries of origin of rough diamonds (Article 3p(8)).

3.7.2. Polished diamonds
Maintenance of the obligation to use traceability-based evidence to polished diamonds (CN 7102 39 00), through the provision of a certificate certifying that the diamonds are not mined, processed or produced in Russia.

Postponement of the entry into force date of the obligation to provide evidence based on traceability for the import of polished diamonds is postponed from march 1st 2025 to January 1st 2026 (Article 3p(10)).

3.8. Exports
3.8.1. List of "common high priority items"
Extension of the "common high priority items list" ("CHPL items") requiring due diligence by exporters to ensure that these goods are not re-exported to Russia (Article 12gb). This list now includes the goods listed in the new Annex XLVIII (internal combustion engine generator sets and switches).

For reference, the list of CHPL items includes dual-use goods and advanced technologies found on the battlefield in Ukraine or essential for the development, production, or use of Russian military systems. On 24 September 2024, the G7 updated its "Preventing Russian Export Control and Sanctions Evasion: Updated Guidance for Industry" to assist industrial companies in preventing the diversion of these CHPL items, notably through third countries (see our Alert on the subject).

Alignment of the other Regulations with the Russia Regulation :
Transposition of this list of goods to the Belarus Regulations (article 8ga, Annexes XXX and XXXI).

3.8.2. List of which might contribute to Russia's military and technological enhancement, or the development of the defence and security sector
Extension of the list of goods which might contribute to Russia's military and technological enhancement, or the development of the defence and security sector, the export of which to Russia is prohibited (Annex VII) under Article 2a. This list now includes chemical precursors (useful for the production of chloropicrin), software related to computer numerical control (CNC) machines, video game controllers, chromium ores and compounds.

It is now strictly prohibited to directly or indirectly provide technical assistance, brokering services or other services, financing or financial assistance and to sell, license or transfer intellectual property rights or trade secrets related to these controlled items to persons listed in Annex IV (see Section 1. Main new measures to combat circumvention of this Alert).

Alignment of the other Regulations with the Russia Regulation :
Transposition of this list of goods to the Belarus Regulations (articles 1f and 1fa, Annex Va).

3.8.3. List of goods which could contribute in particular to the enhancement of Russian industrial capacities
Extension of the list of goods which could contribute in particular to the enhancement of Russian industrial capacities whose export to Russia is prohibited under Article 3k. This list now includes the goods listed in the new Annex XXIIID (minerals, chemicals, steel, glass materials, and fireworks, that are of military significance).

The ban on these goods does not apply to the performance of contracts concluded before 25 February 2025 and until 26 May 2025.

The list of goods whose transit through Russian territory is prohibited (Annex XXXVII) under Article 3k(1a) is changing.

Alignment of the other Regulations with the Russia Regulation :
Transposition of these lists of goods to the Belarus Regulations (article 1bb, annexes XVIII et XIX).

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.