Overview
In response to the ongoing conflict in Ukraine, the European Council finally reached an agreement to introduce the European Union’s 16th sanctions package on 24 February 2025, targeting key sectors of the Russian economy. This comprehensive set of measures aims to further restrict Russia's economic capabilities and curtail its ability to finance the war. The sanctions package covers various domains, including energy, trade, transport, infrastructure, and financial services, however it still does not impose a ban on Russian liquefied natural gas (LNG). The new measures also focus on preventing the circumvention of sanctions, with many provisions now mirrored in the Belarus sanctions regime and with an updated set of measures related to Crimea, Sevastopol, and non-government-controlled areas in Eastern Ukraine. Below are the key takeaways from the 16th sanctions package:
Anti-Circumvention Measures and Additional Listings
The 16th sanctions package introduces several anti-circumvention measures, seeking to enhance the EU's ability to prevent entities from bypassing existing sanctions. New listing criteria have been added in Regulation 269/2014 targeting persons who support the operations of unsafe oil tankers, as well as individuals and entities that are part of Russia's military and industrial complex, support it, or benefit from it.
The package also expands the list of designated individuals and entities, adding 83 new listings, including 48 individuals and 35 entities, who support the Russian military complex, engage in sanctions circumvention, and operate within Russian crypto assets exchanges and the maritime sector. Moreover, Annex XLII to Regulation 833/2014 lists 74 additional vessels bringing the total number of listed vessels to 153. These vessels either form part of Russia's shadow fleet or are associated with Russia's energy revenues. The measures prohibit various actions related to them, including their transfer, sale, access to ports, operation, flag registration, financial or technical assistance and other services.
Targeted export restrictions are also imposed on 53 new companies supporting Russia's military-industrial complex or involved in sanctions circumvention. These restrictions cover companies both within and outside Russia, limiting the sale of dual-use goods and tightening possible derogations attributed to these companies, due to their close links with Russia’s defence and security sector.
It should also be noted that the obligation on entities to undertake their best efforts to ensure their non-EU subsidiaries do not engage in activities undermining the sanctions has now been extended to include the asset freezing measures set out in Regulation 269/2014 and the measures set out in the Regulations concerning Crimea, Sevastopol and the non-government-controlled areas in Eastern Ukraine.
Trade Restrictions
The 16th package introduces significant trade restrictions, particularly concerning Russian aluminum. The amended Regulation 833/2014 enacts a direct import ban on primary ('unwrought') aluminum originating from or exported by Russia. To facilitate a smooth transition for businesses, a quota mechanism allows for a phased reduction of aluminum imports.
The sanctions also extend dual-use export restrictions to additional items crucial for Russia's military capabilities. This includes prohibitions on the sale, supply, transfer, or export of specific chemical precursors, chromium ores and compounds, software related to Computer Numerical Control (CNC) machine tools and other technologies used in weapon and video game controllers manufacturing. Moreover, the prohibition extends to any other related service or assistance and any transfer of intellectual property rights related to dual-use goods. The list on industrial goods, whose sale to any entities in Russia or for use in Russia is banned, has also been extended specifically targeting minerals, chemicals, steel, glass materials, and fireworks, with special military significance.
Another interesting addition is the introduction of new enhanced verification and origin certification requirements for the import of unworked diamonds in the EU.
Energy-related restrictions
The energy sector faces stringent restrictions under the new sanctions. Article 3nb of Regulation 833/2014 bans the temporary storage or placement of Russian crude oil or petroleum products in EU ports. Furthermore, Article 3t extends the prohibition on providing goods, technology, and services for Russian LNG projects to include crude oil projects, like the Vostok oil project. The package also extends the existing software ban to restrict the export, supply or provision of oil and gas exploration software to Russia.
An interesting new point of the package is the addition of 2 products (generating sets with spark-ignition internal combustion piston engines and other switches) to the goods covered by Article 12gb of Regulation 833/2014. According to this provision, natural and legal persons, entities and bodies that sell, supply, transfer or export common high priority items and goods shall take appropriate steps, proportionately to their nature and size, to identify and assess the risks of exportation to Russia and exportation for use in Russia for such goods or technology, ensure that those risk assessments are documented and kept up-to-date and implement appropriate policies, controls and procedures, to mitigate and manage effectively the risks of exportation to Russia and exportation for use in Russia for such goods or technology.
Transport Restrictions
The 16th sanctions package imposes new transport-related restrictions. Article 3d(1b) of Regulation 833/2014 extends the flight ban to enable the listing of third-country carriers conducting domestic flights within Russia or supplying aviation goods to Russian airlines or for domestic flight in Russia. If listed, these airlines will not be allowed to fly to the EU. No third-country carrier has been listed yet.
Additionally, Article 3l (1b), introduces an amendment that prevents increasing Russian ownership above 25% in EU road transport undertakings, thereby closing potential loopholes for circumventing existing sanctions. Before the amendment, the prohibition only referred to new road transport undertakings and not to changes in the capital structure of existing undertakings.
Infrastructure Measures
The infrastructure sector is also targeted, with Article 5ae and Annex XLVII of Regulation 833/2014 imposing a full transaction ban on specific Russian infrastructures, including major ports and airports, such as Vnukovo Airport, Zhukovsky Airport, and several regional airports, as well as ports like Astrakhan and Makhachkala on the Caspian Sea, Ust-Luga and Primorsk on the Baltic Sea, and Novorossiysk on the Black Sea. Additionally, Article 5n (2) introduces a ban on construction services provided by EU operators in Russia, extending the prohibition beyond architectural, engineering, legal advisory, and IT consultancy services.
Based on a new provision, competent authorities may authorize the participation in or financing of mining and quarrying activities that yield their highest value from, or have as their primary objective, the production of any of the following critical materials: aluminium, including bauxite, chromium, cobalt, copper, iron ore, mineral fertilisers, including potash and phosphate rock, molybdenum, nickel, palladium, rhodium, scandium, titanium, vanadium, heavy rare earths and light rare earths.
Financial Sector Measures
To curb Russia's financial capabilities, the sanctions package strengthens measures within the financial sector. Annex XIV to Regulation 833/2014 adds 13 financial institutions to the list of entities prohibited from accessing specialised financial messaging services, aiming to disrupt financial data exchange crucial for transactions. Moreover, Annex XLIV adds three banks to the transaction ban due to their use of the Financial Messaging System of the Central Bank of Russia (SPFS) to circumvent EU sanctions.
Further, Article 5ad(1)(b)-(c) extends the total transaction ban to include financial institutions and crypto asset providers involved in circumventing the Oil Price Cap and facilitating transactions with listed vessels of the shadow fleet. Although no such institutions or providers have been listed yet, these measures underscore the EU's commitment to closing all potential loopholes.
Conclusion
The 16th sanctions package introduces comprehensive amendments mainly focusing on the prevention of circumvention and the tightening of conditions for trade-related transactions. However, the lack of full political alignment is underlined by the absence of critical sectors, such as the LNG, from the scope of the measures.
