Coalition of the Willing: EU and UK, but Not the US, Impose New Russia Sanctions

Overview

As they have on each previous anniversary, the EU and UK released new sanctions against Russia on February 24, 2025, to mark the three-year anniversary of Russia’s full-scale invasion of Ukraine. For the first time, the United States did not do the same, electing to issue a limited set of Iran-related sanctions on the anniversary instead. The EU package was more fulsome than the UK package, including new port and airport restrictions, additional trade restrictions (including an aluminium ban), enhanced military end-user restrictions, and additional asset freezes and vessel designations.

EU Sanctions

The EU’s 16th Russia sanctions package includes:

• Aluminium import ban: The phasing in of a total ban on the import of primary aluminium (CN code 7601) from Russia and Belarus. For Russia, the EU will allow the total import of 275,000 tons until February 26, 2026 (this equates to 80% of EU imports in 2024). After that date, aluminium may be imported through December 31, 2026, but only if: (1) the underlying contracts for a shipment were entered into before February 25, 2025; and (2) the total imports do not exceed 50,000 tons (total).
• Additional Export Restrictions: The EU restricted an expanded list of items for export to Russia, including dual-use chemical precursors, software for CNC machines, video game controllers, chromium ores and compounds, other minerals, steel, and glass materials.
• Enhanced Military End-User Restrictions: The EU imposed a new restriction on selling or exporting dual-use goods or other advanced goods and technologies to persons or entities listed in Annex IV of Regulation 833, which includes both Russian and non-Russia entities (from countries such as China, Kazakhstan, Kyrgyzstan, Turkey, and the UAE). There are also associated prohibitions on the provision of technical assistance, brokering services, other services, financing and financial assistance and IP rights to those listed in the Annex. To date, inclusion in this Annex had served primarily to restrict the listed party’s ability to get a licence under exemptions to Russia export restrictions. In conjunction with adding new prohibitions relating to such listed entities, the EU added 53 companies to the list (including 34 from outside of Russia).
• EU Asset Freezing “Best Efforts” Obligation: The EU extended the “best efforts” obligation – which requires EU parent companies to undertake best efforts to ensure their non-EU subsidiaries do not participate in activities that undermine EU sanctions – to the EU’s Russia asset freezing sanctions regime. An analogous prohibition was introduced into Regulation 833 (the EU’s Russia trade and sectoral sanctions regulation) and the Belarusian (combined asset-freezing and trade/sectoral) regime in June 2024. As with the equivalent provision in Regulation 833, the preamble to the new “best efforts” extension explains that “best efforts” should be understood to mean “all actions that are suitable and necessary” to ensure the affiliates do not undermine the EU’s sanctions, including “the implementation of appropriate policies, controls and procedures to mitigate and manage risk effectively”.
• Energy: The EU added a prohibition on the provision of temporary storage and placement under free zone procedure for Russian-origin crude oil and petroleum products, irrespective of the purchase price or the final destination. The existing prohibition on providing goods, technology or services for the completion of Russian LNG projects has been extended to capture the completion of crude oil projects, such as the Vostok oil project.
• Port and Airports Transaction Ban: While previously certain Russian airports and ports had become subject to sanctions as a result of their ownership, the EU introduced a new, more direct prohibition on EU persons engaging in any transaction, directly or indirectly, with specified Russian ports, locks, and airports. The EU used this authority to target the following ports: Astrakhan, Makhachkala, Ust-Luga, Primorsk and Novorossiysk, as well as Vnukovo Airport and Zhukovsky Airport in Moscow and four regional airports. There are a limited number of exemptions to this transaction ban, including:
  • the purchase, import or transport of pharmaceutical, medical, agricultural and food products, including wheat and fertilisers, whose import, purchase and transport is allowed under EU sanctions;
  • the purchase, import or transport of permitted natural gas, titanium, aluminium, copper, nickel, palladium and iron ore from or through Russia into the Union, EEA, Switzerland or the Western Balkans; and
  • permitted trade in Russian oil.
• Vessel Designations: The EU added 74 additional vessels to the list of vessels subject to a port access ban and other services restrictions. These are all vessels that are allegedly part of the Russian shadow fleet or that contribute to Russia’s energy resources.
• New Asset Freezing Criteria and Designations: The EU imposed new asset freezing-listing designation grounds for:
  • persons that own, control, manage or operate vessels that transport crude oil or petroleum products originating in or exported from Russia while practising irregular and high-risk shipping practices, or that otherwise provide material, technical, or financial support to the operations of such vessels; and
  • persons forming part of, supporting, materially or financially, or benefitting from Russia’s military and industrial complex, including by being involved in the development, production or supply of military technology and equipment.

  In parallel, the EU designated an additional 48 individuals and 35 entities (including 3 individuals and 3 entities outside of Russia) as asset freeze targets. Newly designated parties included entities accused of supporting the Russian military complex, persons involved in circumventing EU sanctions, a Russian crypto assets exchange, and companies involved in the Russian shadow fleet.

• Construction Services: The EU expanded the existing architectural and engineering services ban to include construction services.
• Transportation: The EU added authorisation for the EU to designate air carriers operating domestic flights within Russia or selling aircraft or other aviation goods and technology to Russia. If designated, such air carriers (and any subsidiaries) would not be able to land in, take off, or overfly the EU. No entities are designated at present.
• Financial Sector:
  • Transaction Ban: Three banks (Bank BelVEB and Belgazprombank (both from Belarus) and VTB Bank (PJSC), Shanghai Branch) have been added to a transaction ban due to their use of the Financial Messaging System of the Central Bank of Russia (SPFS), the Russian SWIFT equivalent. This transaction ban was first introduced in the EU’s 14^th package, which also prohibited EU entities operating outside of Russia from directly connecting to the SPFS.
  • Financial Messaging Services: Thirteen regional Russian banks were added to a ban on the provision of specialised financial messaging services (i.e., the SWIFT prohibition).
• Disinformation: The EU added 8 Russian media outlets to its broadcasting ban. This, among other matters, prohibits EU broadcasting operators from broadcasting or enabling/facilitating the broadcast of any content by the listed entities. The new entities are: EADaily / Eurasia Daily, Fondsk, Lenta, NewsFront, RuBaltic, SouthFront, Strategic Culture Foundation and Krasnaya Zvezda / Tvzvezda.
• Crimea and Oblasts Alignment: The EU added new consequences to its sanctions concerning Crimea/Sevastopol, and the non-Ukrainian government controlled regions of Donetsk, Kherson, Luhansk and Zaporizhzhia oblasts. Additional measures include restrictions on the provision of banknotes, additional trade controls, and business services prohibitions.

Finally, the EU mirrored many of the new Russia provisions in changes to its Belarus regime, further aligning the scope between the two sanctions regimes.

UK Sanctions

In parallel to the EU, the UK designated an additional 34 individuals and 33 entities as UK asset freezing targets. Targets included entities operating in places outside of Russia (i.e., China, India, Kazakhstan, Kyrgyzstan, Thailand, Turkey, Uzbekistan). The UK also specified another 40 vessels within Russia’s ‘shadow fleet’ (prohibiting their access to UK ports).

Comment

Unlike the previous two anniversaries of Russia’s full-scale invasion of Ukraine in February 2022, the United States did not join the EU and UK in imposing any new sanctions on Russia, exemplifying the changing geopolitical climate. Whilst too early to say what the future direction of travel might be, last week’s sanctions developments underscore the importance for multinational companies to monitor sanctions and trade policy closely, and to plan for potential future divergence between EU/UK and US regimes.

The new sanctions also continue a trend of the EU and UK imposing Russia-related sanctions on non-Russian actors, through both asset freezes and the new EU targeted export controls on designated entities. This highlights the importance of being alert to sanctions risks even in situations where there is no obvious Russia touchpoint.

Relatedly, companies using screening service providers may wish to consult with them to verify how, if at all, those providers are capturing not only the asset freezing lists, but the additional lists being put forward by regulators (e.g., the EU’s export control-related list). Even if a transaction involves non-controlled goods, or there is no EU touchpoint, an entity’s inclusion within the EU’s Annex IV list continues to raise red flags of potential Russian diversion.