EU’s 21st Sanctions Package Against Russia

On 23 July 2026, the Council of the European Union adopted its 21st sanctions package against Russia, further tightening the EU’s economic pressure on the Russian war economy. The 21st package was delayed by disagreement between Member States, and consensus was reached a week after the date initially expected.

It is safe to say that, after more than four years of targeting Russia’s economy, the package introduces no groundbreaking new measures. The 21st package signals the EU’s willingness to maintain pressure, but it also seems that further reaching economical restrictions increasingly require concessions from individual Member States that those states have shown themselves unwilling to make in protection of their domestic industries.

The stated objectives however remain: curbing Russia’s energy export revenues, closing remaining circumvention loopholes in the financial and trade realm, encouraging divestment and winding down of business activities in Russia and last but not least, strengthening legal protection for EU operators against retaliatory Russian litigation.

We have prepared a focused analysis of the developments that stand out this round:
• energy measures, including the oil price cap suspension, further shadow fleet designations, and expanded listing criteria;
• financial measures targeting Russian and third-country banks and crypto-asset platforms;
• trade and anti-circumvention updates;
• legal protection provisions for EU operators facing abusive Russian court proceedings; and
• Chinese export countermeasures affecting 14 EU entities and the broader implications of the EU’s continued practice of listing Chinese entities.

Energy measures: price cap freeze and expanded shadow fleet pressure

Oil price cap: suspension of adaptation until July 2027

The EU has paused the automatic adjustment mechanism for 12 months (until 15 July 2027), maintaining the current price cap for Russian origin crude oil at $44.10 per barrel to maintain downward pressure on Russian crude exports and ensure Russia does not benefit from the closure of the Strait of Hormuz. The Commission retains the possibility to review the cap earlier in case of exceptional market developments.

Shadow fleet: 41 additional vessels listed and expanded listing criteria to capture those providing bunkering and ship-to-ship transfers

The EU has listed 41 additional vessels of the Russian shadow fleet, identified together with Member States, bringing the total list of vessels
to a whopping 673. These vessels are now subject to a port access ban and a ban on receiving services. With changes to Article 3s(2), the listing criteria for Annex XLII are now expanded to capture any ship supplying or refuelling sanctioned vessels or taking cargo from them (bunkering and ship-to-ship transfers), a vessel-specific deterrent aimed at the broader shadow fleet logistics chain, rather than only the tankers themselves.
Additionally, 8 entities and 1 individual were listed under Regulation 269/2014, including companies operating on behalf of Russia’s major oil companies and, for the first time, a crewing agency supporting the shadow fleet.

Introduction of a derogation for oil cargo seized by Member States
A new provision in Article 3m introduces a derogation permitting the national competent authorities of a Member State that has seized oil cargoes listed in Annex XXV to purchase, import, or transfer that crude oil on terms the competent authority deems appropriate. This is subject to two conditions: The crude must remain under the effective control of the Member State or an entity acting on its behalf, and no funds or economic
resources may be made available for the benefit of any Russian person or entity.

LNG tankers and LNG terminal services
According to Article 3qa, the sale of LNG tankers to third countries is now subject to a notification obligation to the competent authority. Following a Commission assessment within three months, the Council will decide whether to implement a full ban on such sales to Russia. This aims to control the export and prevent the resale of such vessels to Russia.

Additionally, the LNG terminal services ban, introduced in the 20th sanctions package, has been refined to clarify that it also covers non Russian third-country operators that are controlled by Russian companies, not only Russian and EU operators. A temporary, renewable one-year exemption is introduced in Article 3ra for the transfer of Russian LNG to third countries (and related purchases), subject to a review mechanism ensuring that 2025 historical volumes are not exceeded, preventing any increase in Russia’s export revenues from such transfers.

Critical infrastructure transaction ban
The package introduces new transaction bans targeting critical infrastructure nodes that enable Russia’s military and economic resilience. There are two transaction bans on Russian ports, the port of Olya in the south of Russia for its role in the transfer of military equipment, and the Port of Vystosyk, located in the Baltic Sea area, for its role in the maritime transport of Russian crude oil and petroleum products. New transaction bans are also implemented with respect to four airports (Sheremetyevo in Moscow, Ulyanovsk-Vostochny, Rostov-on-Don Platov Airport, and Mineralnye Vody Airport), used for the transport of defence and security
related goods and technology; and an expanded ban on refineries that process Russian oil. The package proposes listing the Kulevi refinery in Georgia over its reliance on Russian crude while continuing to export petroleum products to the EU. Although the EU considered listing the refinery in the 20th package, it deferred action after assurances from Georgian authorities. The refinery is now included in the 21st package, with
a six-month grace period to diversify before the Council reviews whether the listing remains necessary. Georgia has criticised the decision, insisting there has been no sanctions circumvention on its territory and arguing that information provided to the European Commission demonstrated there were no factual or legal grounds for the listing. Georgia, which was granted EU candidacy in December 2023, finds itself in a position shared
by several countries neighbouring Russia: the geographical, historical and economical ties with Russia sit in tension with the EU’s expectations of candidate and partner countries. Across multiple sectors, the EU is increasingly targeting entities in countries that neighbour Russia and have been identified as countries with a heightened circumvention risk, such as Kyrgyzstan, Georgia, Uzbekistan.

Financial measures: further pressure on Russian and third-country banks and crypto platforms

The EU has strengthened the financial sanctions framework with new restrictions targeting Russian banks, third-country financial institutions, and crypto-asset entities, and has for the first time created a dedicated instrument for a jurisdiction-wide crypto-asset services ban. The package imposes a new transaction ban on 33 additional Russian financial institutions, bringing the total number of sanctioned Russian banks to more than 100. A transaction ban is imposed on one bank in Mongolia, a Kyrgyz bank, and two Indian branches of Russian banks. Crypto platforms In an attempt to further prevent circumvention of the sanctions, new transaction bans were established on fourteen crypto platforms and crypto-linked firms located in Georgia, Panama, El Salvador, the UAE, the Marshall Islands, and Belarus. Article 5bc adds a new third-country transaction ban targeting crypto-asset services. The provision allows the EU to prohibit transactions between EU operators and crypto-asset service providers or platforms established in listed third countries that systematically and persistently fail to prevent the circumvention of EU sanctions through crypto-assets. While no countries have been designated under this mechanism to date, the measure is intended to serve as a deterrent. The existing prohibition on Russian nationals owning, controlling, or serving on the boards of MiCA-regulated crypto services companies (e.g. exchanges, trading platforms) is extended. A derogation on the transaction ban for newly listed Russian and third-country banks and crypto platforms allows EU nationals to withdraw their own funds, to prevent sanctioned institutions from using the ban as a pretext to retain client funds.

Trade & anti-circumvention: updated goods lists and expanded entity listings

Exports
New export restrictions cover additions to Annex VII, and now include, nickel powders, metal and alloys used in corrosion-resistant coating of jet engines; beryllium powder used in propellants;
and self-adhesive films, tapes, and strips used in the aerospace and defence sectors. The EU has also aligned its UAV/drone-related export controls with the control text used in the Iranian Missile and UAV Regime, covering ground support equipment, jamming/interception systems, launch systems, flight termination systems, and servomotors for UAVs and missiles. Imports The package expands the import restrictions under Article 3i by introducing new import bans covering goods that accounted for approximately EUR 60 million in EU imports in 2025, compared with around EUR 285 million before the invasion in 2021. The following goods
are added to Annex XXI: copper ores, nickel ores, lead ores and precious-metals ores; unwrought zinc, alkali and alkaline-earth metals; certain inorganic chemicals (zinc oxides and chromium oxides); tall oil; glassware; imitation pearls; and car parts.

Anti-circumvention
The package also adds 51 new entities to Annex IV, comprising 24 entities established in Russia and 27 in third countries (14 in China, including 4 in Hong Kong; 4 in Türkiye; 3 in Kyrgyzstan; 2 in India; 2 in Kazakhstan; and 2 in the United Arab Emirates), on the basis that they support Russia’s military-industrial complex or enable circumvention of EU sanctions. Tighter export restrictions apply to these entities. The fact that more new Annex IV additions are located outside Russia than within it reflects the EU’s growing focus on third-country circumvention networks.

Belarus alignment
The package mirrors the trade measures, and, where necessary, certain financial measures and legal-protection provisions, in the Belarus sanctions regime. Four additional Belarusian entities are added to the list of entities supporting Belarus’s or Russia’s defence and security sector, with tighter export restrictions applying to them.

Legal protection for EU operators
The 21st package further strengthens legal protection for EU operators against abusive litigation brought by Russian parties in response to compliance with EU sanctions. EU persons may now seek damages, including legal costs, from contractual counterparties in the EU where they have incurred losses as a result of claims brought before courts in third countries by the persons, entities or bodies referred to in Article 11(1), in connection with contracts or transactions affected by Regulation 833/2014. This right applies where the EU person does not have effective access to remedies in the relevant foreign jurisdiction.
In practice, this means that EU businesses facing litigation in Russia or other third countries—for example, where compliance with EU sanctions is not recognised as a valid defence or force majeure event—may now be able to recover their losses through proceedings before EU courts.

A Chinese Response?
China has imposed export restrictions on 14 entities in the European Union, barring them from receiving Chinese dual-use items. The move follows the 21st package’s expansion of Annex IV export controls to 51 additional entities accused of supporting Russia’s military-industrial complex. Several of the Chinese companies subject to the 21st package’s own Annex IV additions were listed precisely because the EU accused them of helping Moscow obtain restricted dual-use technologies in circumvention of Western sanctions on Russia.

The Chinese countermeasures illustrate that the EU’s expanding practice of listing third-country entities, particularly those based in China, is now generating direct reciprocal friction. EU operators dependent on Chinese dual-use supply chains should monitor this development closely.

The road ahead
The 21st package extends the EU’s dual-track approach of maintaining maximum pressure on Russia’s energy revenues while keeping the focus on closing circumvention routes through third-country banks, crypto platforms, and shadow fleet logistics. The suspension of the price cap adaptation mechanism until July 2027, taken against the backdrop of Middle East-driven oil price volatility, signals that the EU intends to hold the line on energy revenue pressure even as market conditions shift in Russia’s favour elsewhere.