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EU and UK Sanctions Updates to Mark the Three-Year Anniversary of the Invasion of Ukraine

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On February 24, 2025, the EU adopted its 16th package of sanctions against Russia, Belarus and non-government-controlled areas of Ukraine, symbolically marking the third anniversary of the start of Russia’s invasion of Ukraine and constituting the largest set of updates that we have seen in the past two years. On the same day, the UK also issued new designations under its Russia sanctions regime impacting 107 entities, individuals and ships. See a summary of the updates below.

EU 16th SANCTIONS PACKAGE UPDATES

The Russia Regime

Asset Freeze Measures
Forty-eight individuals and 35 entities have been newly designated and are now subject to asset freeze measures. Those impacted include financial institutions, business leaders in mining and energy, politicians, and proxies from non-government controlled areas of Ukraine. Third-country actors involved in facilitating Russian military operations have also been targeted, including officials from North Korea and a Chinese satellite imagery firm.

Export Restrictions

  • 53 entities (including entities located across jurisdictions such as Russia, China, Hong Kong, India, Kazakhstan, Singapore, Turkey, the United Arab Emirates and Uzbekistan) have been added to the “EU entity list,” which imposes a presumption of denial for export licenses.
  • Expanded dual-use controls now cover critical military-related materials, such as chemical precursors for Chloropicrin, software for CNC machines, chromium compounds, and UAV guidance controllers. Additional restrictions apply to certain plastics, rubber, and chemicals used in Russia’s defense industry.
  • The provision of construction services to the Government of Russia or to Russian companies is now prohibited. The objective behind this measure is to prevent EU operators from contributing to the development of Russia’s infrastructure.
  • Additional items have been added to the list of items that must not be directly or indirectly sold, supplied, transferred or exported to Russia on the basis that they may contribute to the enhancement of Russian industrial capacities—these include industrial goods such as minerals, chemicals, rubber, steel and glass materials to fireworks, amongst others.

Import Restrictions
The package extends the ban of processed aluminum such that it now also covers primary aluminum. This measure aims to reduce a key revenue source for Russia’s economy and will be phased in gradually to mitigate market disruptions. The European Commission will monitor aluminum prices and may propose mitigation measures if significant price hikes occur. This update comes just days after the Trump administration’s reinstatement of aluminum tariffs, which we discussed in a recent blog post.

Sector-Specific Measures

  • Energy: The package intensifies energy restrictions by banning the export of software related to oil and gas exploration and imposing a blanket ban on supplying goods, technology, and services for the completion of crude oil projects, echoing existing liquefied natural gas (LNG) project measures. A temporary storage ban on Russian crude oil and petroleum products within the EU has also been introduced (subject to a wind‑down period and exemptions), while carefully crafted licensing grounds now enable: (i) imports necessary for the operation of the Druzhba Pipeline; (ii) the transfer of certain petroleum products obtained from crude oil imported by pipeline from Slovakia to Hungary and vice versa; and (iii) the import of Russian LNG through terminals that are not within the interconnected natural gas system when LNG is purchased from a terminal located in another Member State that is connected to the interconnected natural gas system.
  • Finance: The package represents the first use by the EU of its powers to prohibit transactions with specified financial institutions that use the System for Transfer of Financial Messages (SPFS) of the Russian Central Bank (the Russian alternative to SWIFT)—three such financial institutions have been designated under this prohibition. Additionally, the package extends the previously existing transaction ban to third country financial institutions or crypto asset providers where such parties participate in the circumvention of the Oil Price Cap/support listed vessels of the “shadow fleet.” Finally, the package extends the prohibition on providing SWIFT or other specialized financial messaging services to 13 additional regional Russian banks, effective from March 17, 2025.
  • Transport: A new ban targets transactions with specified ports, locks, and airports in Russia that support UAV transfers or circumvent price cap measures. The list of “shadow fleet” vessels facing port access bans has grown by 74 (to a total of 153 vessels), along with a broader prohibition on related maritime services. New provisions also prevent changes in road transport company structures that might increase a Russian party’s ownership to 25% or more, while the flight ban has been extended to cover carriers involved in domestic Russian operations or those exporting aviation goods to Russia.
  • Broadcasting: In a bid to counter misinformation, the EU has also suspended the broadcasting licenses of eight Russian media outlets and extended the prohibition until April 9, 2025, pending unanimous Council approval.

Other Updates

  • The package introduces new licensing grounds, including to authorize the acceptance of deposits prohibited under the existing restrictions against accepting deposits of more than €100k, where such deposits are necessary for the restructuring or liquidation of a designated person, as well as exemptions for certain activity required to facilitate the work of civil society and the media, and humanitarian or urgent medical activity.
  • Litigation: On an exceptional basis and to remedy situations where justice has been denied, courts of Member States are now permitted to rule on claims for damages brought pursuant to EU sanctions legislation where EU or Member State law does not establish the jurisdiction, provided that the case has sufficient connection to the relevant Member State (e.g., if the claimant is incorporated in that Member State).

Non-Government Controlled Areas of Ukraine Regimes
Notably, the package introduces a prohibition on exports of all professional services and software already subject to restrictions under sanctions in Russia, where such services are provided to legal entities in non-government controlled areas of Crimea, Sevastopol, Donetsk, Kherson, Luhansk and Zaporizhzhia (the “Non-Government Controlled Areas”). It also introduces a prohibition against exports of physical banknotes in any EU currency to the specified regions of Ukraine.

  • Expansion of the extraterritorial reach of EU sanctions: The obligation on EU companies to undertake “best efforts” to ensure that their non-EU subsidiaries comply with sanctions has been extended to cover sanctions under all Russia-related regimes, i.e., in relation to sanctions regimes covering the Non-Government Controlled Areas, in addition to sanctions under the Russian sectoral sanctions regime and the Belarus regime, which were already covered by the scope of this obligation. This obligation requires the implementation of robust policies, controls, and due diligence measures, particularly when sensitive goods are sold to third countries, in order to mitigate the risk of diversion and improve effective implementation.

The Belarus Regime
Updates impacting the EU’s Belarus sanctions regime include the following measures, which are broadly aimed at mirroring the updates made to the EU’s Russia sanctions regimes:

  • new export restrictions on various items for the development and production of Russia’s military systems, including chemical precursors to Chloropicrin and other riot control agents, software related to computer numerical control machines, chromium compounds, and controllers used to guide UAVs, among others;
  • the prohibition on transit through Belarus has been expanded to cover more goods;
  • a new licensing ground has been introduced to authorize the sale or export of information security systems intended for non-military, civilian networks;
  • further restrictions on the import of primary aluminum from or originating in Belarus; and
  • new licensing grounds, including to allow the release of funds that were frozen due to the involvement of a listed intermediary bank in the transfer.

Other EU 16th Sanctions Package Updates
The package also introduces a legal basis for more effective sharing of information on potential sanctions violations between financial intelligence units in EU Member States and facilitates the sharing of information (e.g., regarding third-country trade, transactions and operators) with like-minded third countries (e.g., the U.S., Japan, UK, South Korea, Australia, Canada, New Zealand, Norway, Switzerland, Liechtenstein and Iceland), in an effort to strengthen enforcement and combat circumvention and signaling that the EU is maintaining its efforts to ramp up enforcement efforts and encourage compliance.

UK Sanctions Updates
The designations issued by the UK on February 24, 2025, impacted 107 entities, individuals and ships, including: producers and suppliers of machine tools, electronics and dual-use goods for Russia’s military, including microprocessors used in weapons systems—based across a range of third countries including Central Asian states, Turkey, Thailand, India and China; actors involved in key Russian industries, the North Korean Defense Minister and other North Korean generals and senior officials; as well as 40 “shadow fleet” oil tankers carrying Russian oil. The UK’s designations also involved a designation against a foreign financial institution considered to have been supporting Russia’s war machine, representing the UK’s first use of its power to designate foreign financial institutions on such grounds.

Conclusion
By expanding asset freezes, tightening trade controls, and refining comprehensive operational measures, the package sends a resolute message that the EU’s Russia sanctions regimes continue to be a top priority for the EU, even three years on from the outset of the conflict. As the regulatory landscape evolves, businesses must remain vigilant, continually refreshing their compliance frameworks and risk management strategies to navigate evolving rules.

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