knowledge 31 August 2026 |

Closing the Loopholes: Inside the EU’s Latest Sanctions on Russia

21st Sanctions Package: July 2026

The Council adopted its 21st package on 23 July 2026, targeting key sectors including energy, banking, cryptocurrency networks, trade and the military-industrial complex. The package introduces 218 new listings (48 individuals, 170 entities), the largest batch of designations in four years. A sanctions designation is a key mechanism used to impose restrictive measures on an individual or entity due to their association with activities that threaten peace, security or other specified objectives. This results in automatic restrictive measures including asset freezes and restrictions on making funds or economic resources available to the designated person or entity.

Shipping, Energy and Mining

An additional 41 shadow fleet vessels have been designated, bringing the total to over 670. For the first time, the designation criteria have been expanded to capture vessels providing bunkering or ship-to-ship transfer services. Member States may now confiscate and sell cargo from detained shadow fleet vessels. The package also targets oil refineries in Russia, Belarus and third countries (including a Georgian refinery), and introduces liquified natural gas (“LNG”) tanker sale notification requirements.

However, the adoption of the 21st package was delayed by the Greek government, which demanded protections for Greek shipping company Dynagas, a transporter of Russian LNG. The package as initially drafted would have prevented EU companies from transporting, purchasing or selling Russian LNG to customers outside the European Union, effectively ending European participation in Russia’s global LNG export business. Following Greek lobbying, companies operating under contracts signed before 24 February 2022 may now continue transporting Russian LNG to third-country markets until at least 25 July 2027.

Other lucrative revenue streams have also been targeted, with designations of seven actors in the gold sector, a diamond company, and several entities in mining and metallurgy.

The Military Industrial Complex

The 21st package designates 56 persons and companies involved in Russia’s military-industrial complex, of which 37 are directly related to long-range drone production.

51 new entities have also been added to the list of those subject to stricter export restrictions on dual-use goods and technologies. Some of these entities are located in third countries such as China (14, with 4 in Hong Kong), Turkey (4), Kyrgyzstan (3), India (2), Kazakhstan (2), and the UAE (2). This where they facilitate Russia’s circumvention of restrictions in sectors including microelectronics, computer numerical controlled machine tools, and semiconductor processing equipment.

Financial Services and Crypto

Transaction bans have been extended to an additional 33 Russian credit and financial institutions (effective as of 13 August 2026), bringing the total number of Russian banks excluded from the EU internal market to over 100. The ban also extends to financial messaging services, and a Kyrgyz bank connected to Russia’s SPFS messaging system has been added to the list.

Asset freezes have been imposed on 94 banks together with a prohibition on making funds available to them. Four sanctions designations connected to the cross-border A7 network (the Russian system created to bypass SWIFT and other Western financial restrictions on Russian foreign trade) have been added, and transaction bans now apply to 14 crypto-related service platforms based in Georgia, UAE, Panama, Belarus, the Marshall Islands and Kyrgyzstan. A new instrument is also being introduced that will enable the EU to impose a full ban on transactions between EU operators and cryptocurrency providers used by Russia.

Trade

Export restrictions on items used by Russia’s military-industrial base have been expanded to cover additional goods and technologies, including drone-related technology and high-performance metal alloys used in defence and aerospace.

Import bans on goods worth over €60 million—including auto parts, copper, zinc, glassware and metal—have also been introduced.

The 21st package also introduces measures for Belarus that mirror those for Russia, with a particular focus on trade and legal protection. Four entities have been added to the Belarus dual-use list, and the crypto board-membership ban has been extended to Belarusian nationals (effective 25 August 2026).

Visa Bans

The 21st package introduces a visa ban for Russian combatants and ex-combatants from the armed forces and proxy groups who have participated in the war in Ukraine. The Council has authority to determine when this ban enters into force

Mini-Sanctions package: June 2026

On 15 June 2026, the Council approved a “mini” package against Russia, designating 34 individuals and 47 entities. These sanctions focused on parties involved in the transport and export of crude oil and petroleum from Russia, as well as Lukoil-Western Siberia and various companies based in Russia, Turkey, UAE, Hong Kong, Azerbaijan and Liberia.

20th Sanctions package: April 2026

The 20th sanctions package was adopted on 23 April 2026 alongside agreement on a €90 billion EU loan for Ukraine (for further discussion of the Ukraine Support Loan, see our briefing - Security - A Priority of Ireland’s EU Council Presidency). The package was initially delayed by Hungary during negotiations over oil transit demands, illustrating the highly political nature of sanctions measures and the challenges of requiring unanimous approval from all EU27 Member States. It included 120 listings (33 individuals, 83 entities) and was described by the Commission as having a “strong anti-circumvention angle,” including the first activation of an anti-circumvention tool targeting transit of common high-priority goods through Kyrgyzstan. 

Financial services and crypto

The EU imposed transaction bans on 20 additional Russian banks, with narrow exceptions for humanitarian transactions and bans on four financial institutions in Kyrgyzstan, Laos and Azerbaijan for circumventing EU sanctions. The package also introduced the EU’s first crypto-related sanctions, including a ban on dealings with Russian crypto-asset service providers (CASPs) and bans on transactions involving RUBx (a rouble-backed stablecoin) and the digital rouble. Netting and set-off arrangements with Russian counterparties were also prohibited to prevent circumvention.

Energy, military-industrial complex and Trade

The package expanded measures targeting Russia’s energy sector, including additional designations, the extension of restrictions on Russia’s “shadow fleet”, and new service restrictions on ice-breakers and LNG tankers. Additional entities connected to Russia’s military-industrial complex were also designated, while new anti-circumvention export controls were introduced on certain machine tools and telecommunications equipment exported to Kyrgyzstan.

Comment

These packages represent the most comprehensive expansion of EU sanctions since 2022, with a strong focus on preventing circumvention via third countries. Companies should assess their risk exposure and compliance procedures, particularly as regards monitoring of international payment flows, any unusual transaction activity and ensuring appropriate due diligence as regards supply chains in cross-border business.

These measures underscore the EU’s increasingly extra-territorial approach to sanctions enforcement, notably including 27 designations of entities supporting Russia’s military-industrial complex in third countries such as China, Hong Kong, Turkey, Kyrgyzstan, India, Kazakhstan, and the UAE. This approach has not gone unanswered: within 24 hours of the 21st package’s adoption, China’s Ministry of Commerce placed 14 EU companies on its export control list in retaliation. Combined with the mandatory contractual re-export prohibition under Article 12g(1) of Regulation 833/2014 (in force since 20 March 2024), these developments signal that companies with exposure to Russian trade flows or third-country supply chains must now treat anti-circumvention compliance as a critical operational priority.