knowledge 20 March 2025 |

EU-Russia sanctions update: 16th package strengthens sanctions and EU averts Hungary veto crisis

As Russia’s war against Ukraine enters its fourth year, the Council of the European Union (the "Council") unanimously adopted its 16th sanctions package on 24 February 2025.¹ The new package includes additional asset freeze listings and anti-circumvention measures and targets additional sectors of the Russian economy, such as the aluminium and construction industries. Compliance requirements are also heightened through the extension of the “best efforts” requirement to Regulation (EU) 269/2014.²

Further, on 14 March 2025, the Council agreed to renew its individual sanctions under Regulation (EU) 269/2014 in relation to the EU Russia financial sanctions for another six months, until 15 September 2025³. The individual sanctions list must be renewed every six months by a unanimous vote of the 27 member states. According to media reports⁴, Hungary had threatened to veto this renewal unless several individuals, including Russian businessman Mikhail Fridman, were delisted. In an apparent compromise between Hungary and the other 26 member states reached one day before the measures were due to expire, four individuals have been delisted. These individuals are: Gulbahor Ismailova (sister of oligarch Alisher Usmanov), Viatcheslav Moshe Kantor, Mikhail Degtyaryov (Russia's sports minister) and Vladimir Rashevsky. Mikhail Fridman remains listed. 

Highlights from 16th package of restrictive measures:

• Additional listings - additional asset freezing listings were made against 48 individuals and 35 entities. The new listings include individuals and entities that support the Russian military, are active in sanctions circumvention, the maritime sector and the Russian crypto assets exchanges. A new criterion for listing individuals and entities that are part of Russia's military and industrial complex, support it, or benefit from it, has been added.
• Anti-circumvention measures – in a crackdown on the Russian shadow fleet or vessels contributing to Russia's energy revenues, the package targets 74 additional vessels, bringing the total number of listed vessels to 153. The measures add a new listing criterion, targeting those who support the operations of unsafe oil tankers. The package imposes targeted export restrictions on 53 new companies supporting Russia's military-industrial complex or engaged in sanctions circumvention. This includes 34 companies registered in countries other than Russia.
• Increased compliance requirements – the new Article 15a⁵ extends the “best efforts” requirement to Regulation (EU) 269/2014, further broadening EU sanctions compliance obligations beyond the EU. This requirement, first introduced in the 14th package (see our previous briefing here) in respect of Regulation (EU) 833/2014, requires parent companies undertake best efforts to ensure their non-EU subsidiaries do not undermine asset freeze measures against listed persons.

Additional Measures

• Targeted export restrictions - trade restrictions now include direct limits on Russian aluminium imports. Minerals, chemicals, steel, glass products, and fireworks that may be used in the military have all been subject to additional export restrictions. Dual-use export controls have been tightened, adding 53 additional organisations to the list of those backing Russia’s military-industrial complex, including 25 in China, India, Turkey, Kazakhstan, the United Arab Emirates, Uzbekistan, and Singapore.
• Energy measures - further limits on Russian crude oil and petroleum product storage in EU free zones were introduced, limiting Russia’s ability to increase energy production. Furthermore, export restrictions on software used in oil and gas exploration make it more difficult for Russia to maintain and expand its fossil fuel industry.
• Financial sector - 13 additional financial institutions are now subject to the prohibition on providing specialised financial messaging services. Three banks related to Russia’s SPFS financial messaging system have been sanctioned, two in Belarus and one in China.
• Transportation - third-country airlines are prohibited from flying domestically in Russia and new rules prevent Russian ownership of more than 25% of EU road transport enterprises. Furthermore, transaction sanctions have been imposed on Russian ports and airports that handle military items, oil, and sanctioned materials.
• Media disinformation - ban on 8 Russian media outlets for supporting and justifying Russia’s war against Ukraine and spreading pro-Kremlin propaganda. 
• Corresponding sanctions against Belarus - further restrictive measures on Belarus have been implemented, mirroring the trade-related sanctions agreed against Russia and restrictions concerning the sale or provision of services and software, deposits and crypto-asset wallets, and transports.

Comment

The 16th package demonstrates the Council’s commitment to intensifying pressure against Russia in the long-term, and the EU has confirmed that work on the 17th package of sanctions is continuing.⁶ A joint statement by G7 foreign ministers on 14 March 2025, welcomed ongoing efforts to achieve a ceasefire but called for Russia to reciprocate and agree, and fully implement, a ceasefire on equal terms. The G7 signalled it had “discussed imposing further costs on Russia in case such a ceasefire is not agreed, including through further sanctions, caps on oil prices, as well as additional support for Ukraine, and other means”, which may include the use of “extraordinary revenues” generated from immobilized Russian Sovereign Assets.⁷

Conclusion

Operators should be mindful of the new expanded reach of EU sanctions. The new package shows a trend towards extending sanctions compliance requirements beyond the EU, with ‘best efforts’ obligations applying to non-EU subsidiaries. It is important that operators regularly monitor EU updates and continue to assess their risk exposure and compliance procedures in light of any changes.