EU’s 21st package of sanctions on Russia: The details

A statement by the Council of the European Union on July 23 listed the details of the 21st package of sanctions on Russia, approved by EU foreign ministers.

The Council of the EU said that the package includes harsh economic sanctions hitting the sectors that have the greatest impact on Russia’s economy and its ability to fuel its war of aggression against Ukraine, and the largest batch of individual listings of the last four years, totalling 218, of which 48 individuals and 170 entities.

“Today’s package aims to further cripple Russia’s economy and war machine,” the statement said.

“It follows Russia’s recent brutal military strikes deliberately targeting civilian infrastructure, including energy, water and health facilities, cultural and religious sites, and causing severe hardship for the civilian population.”

The EU remains determined to maintain and increase pressure on Russia to stop its brutal war of aggression and engage in meaningful negotiations towards a just and lasting peace, the Council of the EU said.

The EU is significantly expanding action against Russia’s financial and banking sector as a vehicle of Russia’s war economy, the statement said.

The Council of the EU is imposing asset freezes and a prohibition to make funds available to 94 banks and major financial institutions, as well as to an important figure in Russia’s banking establishment.

It is extending its transaction ban to 33 additional Russian credit and financial institutions.

Furthermore, it is introducing a transaction ban against a Kyrgyz bank connected with the SPFS (System for Transfer of Financial Messages) ban and three other non-Russian banks for circumventing sanctions.

The EU is adding four designations related to the cross-border A7 network, including its new links to Africa. It is also extending its transaction ban to 14 crypto-related service platforms based in Georgia, Panama, the UAE, the Marshall Islands, Kyrgyzstan, and Belarus.

For the first time, the EU is introducing the possibility of a full third-country ban for crypto-asset services, as a strong deterrent to countries hosting platforms that help Russia evade EU sanctions. This new instrument will enable the EU to ban any transaction between an EU operator and any crypto provider used by Russia.

Concerning energy, today’s package pauses the automatic adjustment of the oil price cap mechanism until July 15 2027.

This is to ensure that Russia’s profits from oil sales remain contained, despite the exceptional market situation caused by the closure of the Strait of Hormuz, the statement said.

The July 23 agreement foresees an interim review of the suspension to ensure that the mechanism remains necessary and proportionate.

The EU is also continuing to target the shadow fleet by extending the scope of the existing rules also to cover vessels supporting the shadow fleet, by providing bunkering and other services, and listing 41 more vessels on top of the 632 already sanctioned, the statement said.

“These measures target non-EU tankers that are part of the shadow fleet circumventing the oil price cap mechanism, that support Russia’s energy sector in other ways, or that transport military equipment for Russia or stolen Ukrainian grain.”

The EU is designating eight entities and one individual active in the shadow fleet ecosystem, including companies operating on behalf of Russia’s oil majors and, for the first time, a crewing agency providing support to the shadow fleet.

Furthermore, the EU is targeting the oil sector, in particular refineries. It is designating 18 entities and one individual in the oil sector, including three refineries in Russia, a major Belarusian oil refinery, as well as a company created to sell Belarusian petroleum products within Russia.

In addition, the package creates the possibility to prohibit transactions with listed refineries in Russia and in third countries which process or refine Russian crude oil and petroleum products.

In that framework, the EU is imposing a transaction ban – entering into force in six months – on a Georgian refinery trading and processing Russian oil in Kulevi.

Furthermore, the EU added five oil traders to the entities subject to transaction ban for frustrating the prohibition on purchasing Russian crude oil and petroleum products.

The EU is also exerting pressure on Russia’s critical infrastructure, as the EU foreign ministers decided to designate a key cross-border energy supplier and a prominent figure of the Russian Railways, as well as extend its transaction ban to two Russian ports and four Russian airports.

The July 23 package introduces a notification obligation for the sales of LNG tankers and a possibility to introduce new restrictions on the sale of LNG tankers to Russian citizens and companies and introduces other contractual obligations to mitigate the risk of reselling to Russia or for use in Russia.

The EU is also targeting other means of Russia’s revenue generation by designating seven major actors in the gold sector, one of the most important diamond companies, as well as several entities active in the mining and metallurgy sectors.

To constrain Russia’s ability to wage war and carry out strikes, most notably through the use of long-range drones, today’s package introduces 56 individual listings of persons and companies involved in the Russian Military Industrial Complex. These include 37 listings directly linked to long-range drones, targeting their production and supply chain.

The Council also added 51 new entities to the list of those subject to tighter export restrictions on dual-use goods and technologies, due to their support for Russia’s military and industrial complex in its war of aggression against Ukraine.

Some of these entities are located in third countries (China, including Hong Kong, India, Kazakhstan, Kyrgyzstan, Türkiye, and the United Arab Emirates) and contribute to Russia’s circumvention of export restrictions, including on microelectronics, computer numerical controlled (CNC) machine tools and equipment for semiconductor processing.

The package introduces the basis for a comprehensive visa ban for combatants and ex-combatants of the Russian armed forces and other proxy groups, participating in the Russian war of aggression in Ukraine. This confirms Member States’ political and legal commitment to tackling this threat. The Council will decide when the ban is to enter into force, the statement said.

The EU has agreed to expand the existing export ban to include items and technologies used by Russia’s military industry, such as nickel powders, metal and alloys used in corrosion-resistant coatings in jet engines; beryllium powders used in propellants and in high performance alloys; self-adhesive films, tapes and strips used in the aerospace and defence sectors; aviation items specific to unmanned aerial vehicles (UAVs), such as ground support equipment, jamming/interception systems, launch systems and servomotors, and flight termination systems for drones and missiles.

In addition, the EU has introduced further restrictions on the import of goods that generate significant revenues for Russia (worth over 60 million euro), such as copper ores, nickel ores, lead ores, precious-metal ores, unwrought zinc, alkaline-earth metals, zinc oxides, chromium oxides, glassware, imitation pearls and car parts.

The July 23 package also includes measures on Belarus intended to mirror those imposed on Russia, in particular trade measures (import bans on goods generating significant revenue for Belarus as well as export restrictions related to the military industry) and legal protection.

The EU is designating eight individuals for spreading Russia’s war propaganda and contributing to its manipulative war narrative on Ukraine.

Under this package, the EU is designating a Major General and war criminal, who has engaged in the torture, executions, and desecration of bodies of Ukrainian military personnel, including prisoners of war. This listing comes in addition to further designations under Russia’s Human Rights regime, adopted on July 13.

The EU is strengthening the legal protection for EU operators in litigations stemming from EU restrictive measures by allowing EU courts and member states not to recognise or enforce any court decision that was obtained in legal proceedings lodged in Russian courts, the statement said.

The relevant legal acts will shortly be published in the Official Journal of the EU, the Council of the EU said.

The final content of the sanctions has been shaped, since European Commission Ursula von der Leyen announced the proposal on July 9, by objections to some of the proposed provisions from Greece, France, Italy, Germany, Austria, Portugal and Bulgaria.