21st package of sanctions: EU hits Russian energy, financial services and crypto hard

Today, the Council adopted the 21st package of restrictive measures against Russia in response to its war of aggression against Ukraine. It 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. 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.

Tightening the screws on financial services and crypto
Today, the EU is significantly expanding action against Russia’s financial and banking sector as a vehicle of Russia’s war economy. The Council 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 4 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.

Keeping up pressure on Russia’s revenue generation
Concerning energy, today’s package pauses the automatic adjustment of the oil price cap mechanism until 15 July 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. Today’s 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. 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 8 entities and 1 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 1 individual in the oil sector, including 3 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 Council 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.

Today’s 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 7 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.

Russia’s military industrial complex
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.