The EU's 18th Sanctions Package Against Russia

On 18 July 2025, the European Union (EU) adopted its 18th sanctions package against Russia, which entered into force on 20 July 2025. In addition to person-related and sectoral sanctions against Russia, sanctions against Belarus were also tightened. The package comprises the following regulations, all dated 18 July 2025:

• Regulation (EU) 2025/1494 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (“REG 833/2014”);

• Regulation (EU) 2025/1472 amending Regulation (EC) No 765/2006 concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine (“REG 765/2006”);

• Implementing Regulation (EU) 2025/1476 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (“REG 269/2014”); and

• Implementing Regulation (EU) 2025/1469 implementing Article 8a(1) of REG 765/2006.

We present the main amendments:

Extension of person-related restrictions

Annex I to REG 269/2014 has been expanded to include a further 14 natural persons and 42 legal persons, entities and bodies (“PEB”). The new listings of legal PEB include not only legal entities based in Russia, but also those from third countries such as China and the United Arab Emirates that are either involved in the so-called Russian shadow fleet or supply arms and dual-use goods to Russia. In addition, Annex I to REG 765/2006 has been extended to include eight companies from the Belarusian arms industry. One of the consequences of the listing is that no funds or economic resources may be made available to the listed PEB, either directly or indirectly.

Amendments to the Russia-Embargo-REG 833/2014

Export of Annex VII goods to third countries subject to authorisation

The export of goods listed in Annex VII to third countries other than Russia is now subject to authorisation if the exporter has been informed by the competent authority that the items in question are or may be intended, in their entirety or in part, for any PEB in Russia, or for use in Russia (Art. 2a(1aa)). Additionally, various chemical components for fuels have been added to Part A, and more numerical machine tools have been added to Part B.

‍Amendments to Art. 3k and Annex XXIII

Additional CN codes have been added to Annex XXIII, which can now be found in Annexes XXIIIE and XXIIIF. Goods listed in Annex XXIII may not be sold, supplied, transferred or exported, directly or indirectly, to PEB in Russia or for use in Russia. Providing various services in connection with these goods is also prohibited (Art. 3k). Regarding the newly added goods, grandfathering clauses apply, and the competent authorities of the Member States may grant exemptions in some cases.

Ban on imports of petroleum products made from Russian crude oil

In addition, the EU is introducing an import ban and a ban on the provision of certain services relating to refined petroleum products produced in a third country from Russian crude oil (Art. 3ma). This is intended to prevent Russian crude oil from reaching the EU market via indirect routes.

Reduction of the oil price cap

A key element of the 18th package is the reduction of the oil price cap, which was previously set at 60 US dollars per barrel of crude oil under the G7 agreement. This will decrease to 47.60 US dollars per barrel as of 3 September 2025. At the same time, a dynamic mechanism has been introduced that will allow the price cap to be adjusted every six months in line with market conditions (Art. 3n(11)).

Expansion of the list of Russia’s “shadow fleet”

Changes have also been made to Annex XLII of REG 833/2014, which lists ships belonging to Russia’s shadow fleet. These ships are used to circumvent the oil price cap, among other things. Three ships have been removed from the list. Additionally, seven entries have been corrected, and a further 105 ships have been added to the list. Consequently, a total of 444 ships are now listed in Annex XLII and are subject to the restrictions under Art. 3s.

Prohibitions on services pursuant to Art. 5n VO 833/2014

Art. 5n(2b) in conjunction with Annex XXXIX has been supplemented to include software with specific uses in the banking and financial sector, so that it is now also prohibited to sell, supply, transfer, export or provide such software, directly or indirectly, to the Russian government or to legal PEB established in Russia. In the case of providing the software to subsidiaries of EU or Annex VIII partner country companies, General License (Allgemeine Genehmigung) No. 42 should apply. ‍

Transaction bans

Existing transaction bans have been amended, and new ones introduced.

The transaction ban in Art. 5aa has been supplemented by a new exception. According to the newly inserted paragraph 2f, the transaction ban shall not apply to entities established in the EU and listed in Annex XIX, provided that they act on behalf of or at the direction of the parent entity or a third-country subsidiary that is majority-owned by the latter (Art. 5aa(1)(c)). This exemption is subject to official measures ensuring that the PEB established in the EU are subject to public trusteeship or similar public firewall measures, to ensure their continued functionality and compliance with restrictive measures. This new legal exception and the related recitals are likely to be incompatible with non-legally binding FAQ 36 of the German Federal Ministry for Economic Affairs and Energy (Bundesministerium für Wirtschaft und Energie). According to the FAQ, the transaction ban in Art. 5aa(1)(c) does not apply to EU subsidiaries of PEB listed in Annex XIX. The new exception seems to supersede the statement in the FAQ.

With regard to the prohibition on transactions under Art. 5ac(1), for an inclusion in Annex XLIV it shall now be sufficient if the PEB concerned use the financial messaging system (SPFS) of the Central Bank of Russia or equivalent specialised financial messaging services for payment transactions established by the Central Bank of Russia or the Russian State (Art. 5ac(1)). However, no further entries were added to Annex XLIV.

In connection with the transaction ban under Art. 5ad, two companies were listed in Annex XLV Part A with effect from 9 August 2025, thereby triggering the ban. Annex XLV Parts B and C remain empty for the time being.

In addition, further transaction bans were added to REG 833/2014: Firstly, a ban on all economic transactions, including transactions related to financing, that affect the completion, operation, maintenance or use of the Nord Stream 1 and 2 pipelines (Art. 5af(1)). This highlights Europe's strategic move away from Russian gas, although exceptions or authorisation options apply in certain cases.

Secondly, pursuant to the newly inserted Art. 5ag(1), transactions with the Russian Direct Investment Fund (RDIF) are prohibited. The transaction ban also extends to legal PEB that are owned or controlled by the RDIF; are listed in the newly added Annex XLIX or the also newly added (but still empty) Annex L; or act on behalf of or at the direction of one of the above-mentioned organisations. The competent authorities may grant exemptions in certain cases.

The ban on providing specialised messaging services for payment transactions (“SWIFT disconnection”) has been replaced with a comprehensive transaction ban. Annex XIV has been supplemented with 22 additional entries, bringing the total number of financial institutions listed in Annex XIV to 45.

Amendments to the Belarus-Embargo-REG 765/2006

The amendments here reflect the changes in REG 833/2014:

In line with the extension of the export and sale ban in Art. 3k and Annex XVIII of REG 833/2014, Annex VIII has been expanded to include goods that may not be sold, supplied, transferred or exported, either directly or indirectly, to POB in Belarus or for use in Belarus. In some cases, the provisions of existing contracts and authorisation options still apply.

A new export authorisation requirement in accordance with Art. 2a(1aa) of REG 833/2014 is also introduced for goods listed in Annex Va. When exporting to third countries other than Belarus, an authorisation is thus required if the exporter has been informed by the competent authority that the goods in question are or may be intended, in their entirety or in part, for PEB in Belarus or for use in Belarus (Art. 1f(1aa)).

The prohibition pursuant to Art. 1zb(1) on providing specialised payment messaging services to PEB listed in Annex XV or PEB in which at least 50% of the shares are held by such a listed PEB (“SWIFT disconnection”) is also replaced by a comprehensive ban on transactions with the PEB concerned. In certain cases, exceptions apply or the competent authorities of the Member States have the option of granting an authorisation.