The EU's 18th sanctions package against Russia

On 18 July 2025, the EU adopted its 18^th sanctions package against Russia. This blog post summarises the changes.

For more information about UK, EU and US sanctions on Russia, see our detailed blog which also includes our top tips for compliance.

Council Regulation (EU) 2025/1494 amends Regulation (EU) No 833/2014

Energy measures

i. Crude oil cap

The crude oil price cap will be lowered to USD 47.6 per barrel (from USD 60), effective 3 September 2025.

A new mechanism to modify the oil price cap is introduced via amendments to Article 3n para 11. The Commission will review the cap every six months (or sooner if warranted), considering the average market price of Russian crude oil over 22-weeks (starting 15 July 2025). The cap will always be 15% lower than the average market price for Russian crude oil. No change will occur if price fluctuations are under 5%. When the cap is adjusted, existing contracts (which are compliant with the existing cap) will benefit from a 90-day transition period for maritime transport and related services (amending Article 3n para 5).

The Commission will publish the updated average price, and revise Annex XXVIII, on 15 January 2026 and every six months thereafter. The new cap will take effect on the first day of the following month. The Commission will assess the functioning of the price cap mechanism by 15 April 2026 and every six months thereafter, reporting its findings to the Council.

ii. Nord Stream 1 and 2

New Article 5af bans all transactions related to the Nord Stream 1 and 2 pipelines.

This does not apply where the transactions are strictly necessary for the urgent prevention or mitigation of an event likely to seriously and significantly impact human health and safety, maritime shipping, the environment, or as a response to natural disasters.

There are limited derogations available. For example, competent authorities may authorise transactions that are strictly necessary for the wind-down or restructuring of a legal entity associated with the pipelines and are required to ensure the pipelines are not used.

iii. End to Czechia's exemption permitting crude imports

The exemption (under Article 3m) allowing Czechia to import crude oil by pipeline from Russia was ended (with effect from 1 July 2025).

iv. Import ban on refined petroleum products

Under a new Article 3ma, starting 21 January 2026, it will be prohibited to buy, import, or transfer into the EU refined petroleum products from a third country if they are made from Russian crude oil. This includes a ban on related brokering, insurance, technical or financial support.

The ban does not apply to products from a "partner country" (i.e., Canada, Norway, Switzerland, the UK, and the US). These countries are considered to have a set of restrictive measures substantially equivalent to those imposed by the EU on the imports of Russian oil and petroleum products.

If a third country was a net exporter of crude oil in the previous year, its petroleum products will be presumed to come from its own crude oil – not Russian – unless authorities have clear reasons to believe otherwise.

The European Commission will issue guidance on this ban, including what evidence importers must provide to prove the origin of products.

v. Derogation to the prohibition on Russian LNG imports

A derogation has been added to the Article 3u prohibition on importing Russian LNG through EU terminals that are not connected to the interconnected natural gas system.

The derogation applies to a Member State where:

• the Member State is not directly connected to the interconnected natural gas system of any other Member State;  
• the Member State is receiving the first commercial supply of its first long-term natural gas supply contract after 20 July 2025; and
• this ensures the Member State's energy supply.

vi. Transaction ban on third-country operators circumventing oil related prohibitions

The transaction ban under Article 5ad has been expanded to include entities in third countries that are not banks, financial institutions, or crypto service providers (for example oil traders) if they significantly undermine the oil-related bans in Articles 3m, 3n, and 3s of Regulation No 833/2014.

vii. "Shadow fleet" listings

An additional 105 "shadow fleet" vessels have been added to Annex XLII. These ships are now banned from accessing EU ports and from receiving a wide range of maritime-related services. Meanwhile, three tankers have been removed from the list of sanctioned vessels.

Financial measures

i. Transaction ban on certain Russian banks

The Article 5h prohibition on providing EU-based specialised financial messaging services to certain Russian banks listed in Annex XIV (or Russian entities directly or indirectly 50% owned by a listed entity) has been upgraded to a full transaction ban. It now also applies to 22 additional Russian banks, bringing the total to 45 banks listed in Annex XIV. The ban relating to these 22 new banks will take effect on 8 August 2025.

The prohibition does not apply for transactions:

• That ensure diplomatic and consular operations of the EU, Member States or partner countries in Russia; or
• By Member State nationals resident in Russia since before 24 February 2022.

Derogations are also provided for Member States to authorise:

• Transactions which are strictly necessary to divest from Russia or to wind-down business activities there.
• Certain transactions with Bank Zenit.

The package's preamble also confirms that the transaction ban should not apply in regards to activities listed in Article 12h which relate to the Paks II nuclear project (which include, for example, activities necessary for the maintenance and safety of civil nuclear capabilities).

ii. SPFS transaction ban

The conditions under article 5ac for banning transactions with third-country institutions and providers that use Russia's System for Transfer of Financial Messages (SPFS) have been amended (making it easier to impose a ban).

It is prohibited to directly or indirectly engage in any transaction with the entities that are listed in Annex XLIV. No new entities have been added to this list in the 18^th package.

iii. Third-country financial and credit institutions and crypto service providers

Article 5ad has been updated to expand the transaction ban to include third-country banks, financial institutions, and crypto service providers that:

• Significantly frustrate the purpose of EU prohibitions under Regulations (EU) No 833/2014 and Regulation (EU) No 269/2014
• Support Russia’s war against Ukraine, for example by processing transactions that frustrate the purposes of Regulation (EU) No 833/2014.

As a result, two entities have been added to Annex XLV.

iv. Russian Direct Investment Fund (RDIF)

New article 5ag introduces a ban on transactions with the RDIF, including its sub-funds and affiliated companies. The ban also applies to:

• RDIF’s significant investments (especially if linked to Russian government strategies or key sectors) as listed in a new Annex XLIX.
• Entities in third countries that provide investment or financial services to RDIF or its affiliates, listed in Annex L.
• Entities acting on behalf of or at the direction of any of the above.

This ban has already been applied to four Russian entities in which RDIF holds significant investments, listed in new Annex XLIX.

Derogations to the prohibition exist, whereby competent authorities can authorise: 

• Transactions that are strictly necessary for the purchase, import or transport of pharmaceutical and medical products (which can be imported, purchased and transported under this Regulation).
• Until 31 December 2026, transactions which are strictly necessary for the divestment and withdrawal from Russia or the winding-down of business activities in Russia.

v. Software ban

Article 5n has been amended to ban the sale, supply, transfer, or export of certain software management systems and software used in the banking and financial sector (listed in Annex XXXIX) to the Russian government and legal entities established in Russia. Until 30 September 2025, this does not apply to the provision of such software that is necessary for executing contracts concluded before 20 July 2025.

vi. "Public Trusteeship" / "Firewall" exemption

An exemption under Article 5aa allows transactions with entities listed in Annex XIX (e.g. Russian state-controlled companies) if a public trusteeship or similar firewall measure has been imposed by a competent authority. This is intended to help subsidiaries decouple from their Russian parent companies (listed in Annex XIX) while ensuring compliance with sanctions.

Ports and Airports

A new exemption under Article 5ae permits certain third country coal to be loaded in, departing from, or transiting through Russia if both the origin of the goods and its owner are non-Russian. 

An exemption from the transaction ban with certain airports under Article 5ae is provided to allow some activities related to civil nuclear capabilities and facilities.

Trade and anti-circumvention measures

i. Export restrictions and bans

26 entities have been added to Annex IV (including 15 in Russia, 7 in China and Hong Kong, 4 in Türkiye). These entities now face tighter export restrictions on dual-use goods and technologies and items that could support the technological enhancement of Russia's defence and security sector.

The list of restricted items that could contribute to the technological enhancement of Russia’s defence and security sector (Annex VII) has been expanded. It now includes additional computer numerical control (CNC) machines and constituent chemicals for propellants.

The list of goods which could contribute to the enhancement of Russian industrial capacities has been expanded to include machinery, chemicals, some metals and plastics. These goods are subject to a ban on export and the provision of related assistance to any natural person or entity in Russia or for use in Russia (Article 3k and Annex XXIII). Article 3k has also been amended:

• A new paragraph 3ah provides that the prohibition will not apply to the execution until 21 October 2025 of contracts concluded before 20 July 2025 for goods listed in the new Annex XXIIIE. A similar exemption applies to goods listed in Annex XXIIIF, until 21 January 2026 – provided for in a new paragraph 3ai.
• More goods are set out under paragraph 5a. Member States may authorise the sale, supply, transfer or export (or the provision of related assistance) of those goods if they are necessary for the personal household use of individuals in Russia. 
• A new paragraph 5h is inserted, allowing competent authorities to authorise the sale, supply, transfer or export (or the provision of related assistance) of certain goods necessary for the packaging of food, beverages and pharmaceuticals.
• A new paragraph 5i is inserted, allowing competent authorities to authorise the sale, supply, transfer or export (or the provision of related assistance) of certain goods necessary for the execution of contracts concluded before 1 January 2025 until 1 January 2028 or until their expiry date, whichever is earlier.

ii. "Catch-all" provision

 Article 2a now allows national authorities to require prior authorisation for the export of items listed in Annex VII to any third country if they suspect the items might ultimately be sent to Russia or be used by Russian entities.

iii. Transit Ban

The list of goods and technologies banned from transiting through Russia under Article 3k(1a) (Annex XXXVII) has been expanded. It now includes certain economically critical items used in construction and transport.

iv. Expanded Restrictions on Items in the Common Military List

Article 4, which contains prohibitions relating to goods and technology listed in the Common Military List of the EU, is amended. Changes include:

• A ban on the sale, supply, transfer, or export of these items to any person or entity in Russia or for use in Russia.
• A ban on the purchase, import, or transport of these items into the EU if they originate in Russia or are exported from Russia.
• An expansion of the types of services covered by the ban, along with updates to certain exemptions.
• Making it necessary to obtain an authorisation from a competent authority for the sale, supply, transfer or export of items in Annex II to any person or entity in Russia or for use in Russia (including its Exclusive Economic Zone and Continental Shelf)

Protection from certain proceedings

The EU introduced measures to protect Member States from illegitimate arbitration claims brought by Russian companies or individuals under Bilateral Investment Treaties (BITs). These include:

• Under article 11, Member States must not recognise or enforce any court or arbitration decisions from any court that does not belong to a Member State in relation to "investor-State" disputes over EU sanctions (under Regulation (EU) No 833/2014 or Regulation (EU) No 269/2014) and brought by certain persons (Russian-linked individuals or entities, legal entities listed in the Regulation's Annexes etc.).
• A new Article 11e, which requires Member States (and the Union), where applicable, to recover damages and certain costs caused by such abusive legal actions.
• The extension to Article 11e of the forum necessitatis provision under Article 11d  (i.e., a provision that allows a court in a Member State, on an exceptional basis, to hear damages claims brought under Article 11a, Article 11b or Article 11e when i) no other Member State court has jurisdiction under EU or national law and ii) the case has a sufficient connection to the court's Member State.).
• A new Article 11f, which requires Member States  to object to the recognition and enforcement of any arbitration ruling made against them in investor-State disputes related to sanctions under Regulations 833/2014 or 269/2014, using all available legal arguments whether in domestic or foreign proceedings.

Council Implementing regulation (EU) 2025/1476 implementing Regulation (EU) No 269/2014

Listings

14 individuals and 41 entities deemed involved in actions that undermine or threaten Ukraine’s territorial integrity, sovereignty, and independence have been added to Annex I. These include:

Energy:

• Russian and international companies managing shadow fleet vessels;
• Traders of Russian crude oil;
• A refinery in India with Rosneft as its main shareholder, identified as a shadow fleet customer;
• The captain of a shadow fleet vessel;
• An international flag registry private operator; and
• An entity in the Russian LNG sector.

Military: suppliers of the Russian military industrial complex (including 3 entities based in China).

"Russian accountability": an individual involved in Russia's "military education" of Ukrainian children and several Russian proxies in occupied territories (including a person responsible for manipulation of Ukrainian cultural heritage).

Belarus

Council Regulation (EU) 2025/1472 amending Regulation (EC) No 765/2006

i. Arms Ban

A new article 1aa bans the purchase, import or transfer into the EU of items listed in the EU's Common Military List if they originate in Belarus or are exported from Belarus (without prejudice to the import, purchase or transfer related to the provision of spare parts and services necessary for the maintenance and safety of existing capabilities within the Union; or the execution of contracts concluded before 20 July 2025 (and necessary ancillary contracts)).

Similarly, under article 1ab, and subject to certain derogations and instances where the prohibition will not apply, it is prohibited to sell, supply etc. items in the Common Military List to any person in Belarus or for use in Belarus (subject to some derogations).

The prohibited services under article 1b para 1 in relation to items in the Common Military List or internal repression equipment (listed in Annex III) are also expanded.

ii. Export Control

As with the "catch-all" provision described under Council Regulation (EU) 2025/1494, Article 1f has been amended so that national authorities can now require prior authorisation for the export of items listed in Annex Va to any third country, where they suspect that the items might ultimately be sent to Belarus or be used by Belarusian entities.

iii. Financial Messaging Restrictions

The prohibition under Article 1zb on providing specialised financial messaging services to certain Belarusian credit institutions and Belarusian subsidiaries (listed in Annex XV) is expanded into a transaction ban.

Similar to Council Regulation (EU) 2025/1494, the prohibition does not apply to transactions:

• That ensure diplomatic and consular operations of the EU, Member States or partner countries in Belarus;
• By EU nationals resident in Belarus since before 24 February 2022; or

A derogation is also available: competent authorities may authorise transactions which are strictly necessary to divest from Belarus or to wind-down business activities there.

iv. Protection from certain proceedings

Similar protective measures as those described under Council Regulation (EU) 2025/1494, against certain "investor-State" disputes relating to EU sanctions, have been introduced in the Belarus regulations under Articles 8d, 8k, 8l and 8m:

• Under article 8d, Member States must not recognise or enforce any court or arbitration decisions from any court that does not belong to a Member State in relation to "investor-State" disputes over measures imposed under this Belarus regulation and brought by certain persons which are listed or mentioned under the regulation (including, for example, the Belarusian government or designated persons listed in Annex I).
• A new Article 8l which requires Member States (and the Union), where applicable, to recover damages and certain costs caused by such abusive legal actions.
• The extension to Article 8l of the forum necessitatis provision under Article 8k (i.e., a provision that allows a court in a Member State, on an exceptional basis, to hear damages claims brought under Articles 8h or 8l when i) no other Member State court has jurisdiction under EU or national law and ii) the case has a sufficient connection to the court's Member State).
• A new Article 8m, which requires Member States to object to the recognition and enforcement of any arbitration ruling made against them in investor-State disputes related to sanctions under the regulation, using all available legal arguments whether in domestic or foreign proceedings.

v. Export restrictions

The EU has widened its export controls:

• Military and Security sectors: Items have been added to the list of restricted exports which could support Belarus’s military or technological development (Annex Va). These include items used by Russia in its war against Ukraine and items contributing to the development or production of Belarus’s military systems: chemical precursors to energetic materials, spare parts for machine tools, additional computer numerical control (CNC) machines and constituent chemicals for propellants.
• Industrial sector: Items have also been added to the list of goods which might contribute to the enhancement of Belarusian industrial capacities (Annex XVIII).
  The prohibition will not apply to some items, where their sale, supply, transfer or export is necessary for the execution until 21 October 2025 (or 21 January 2026 for some items) of contracts concluded before 20 July 2025.
  Member States can authorise the sale, supply, transfer or export (and related assistance) of some additional items, where those are necessary for the personal household use of natural persons in Belarus.
• Transit: More goods and technologies are now banned from transiting through Belarus (Annexes XIX and XIVa).

vi. Listings

One entity has been added to the list of those subject to restrictions regarding authorisations for the sale, supply, transfer or export of dual-use goods and technology, and items that could contribute to the enhancement of Belarus’s military and technological, or the development of its defence and security sector (Annex V).

Council Implementing regulation (EU) 2025/1469 implementing Article 8a(1) of Regulation (EC) No 765/2006

Listings: 8 entities that operate in the Belarusian military industrial complex have been listed.

Our team

Fieldfisher's experienced multi-disciplinary sanctions and export control team includes lawyers who have negotiated and drafted EU and UN sanctions regimes in Government and regularly provide sanctions advice to businesses operating around the world in a wide variety of sectors. We work closely with US partners to provide coordinated, comprehensive and practical advice to help business understand and manage the impact of sanctions. 

For more information please contact Andrew Hood (Partner, International Trade).
 
* The contents of this notice do not constitute legal advice and are provided for general information purposes only.