The EU's 21st sanctions package will significantly impact Russia's energy and financial sectors

Key elements of the 21st sanctions package

Targeted financial sanctions

Annex I to Council Regulation (EU) No 269/2014 has been amended to include:

• 48 natural persons
• 168 legal entities

Inclusion in Annex entails an obligation to freeze all funds and economic resources belonging to, owned, held, or controlled by these persons, entities, or bodies. In addition, it is prohibited to directly or indirectly make funds or economic resources available to or for the benefit of these persons, entities, or bodies.

Energy sector

More than 40 additional shadow fleet vessels listed

Suspension of the amendment of the Russian crude oil price cap

To reduce Russia's revenues from oil exports, the new sanctions package suspends the price cap adjustment mechanism until 14 July 2027, maintaining the oil price cap at its current level. The price cap is currently set at USD 44.10 per barrel.

Under the previous EU sanctions framework, the price cap for Russian oil was subject to regular review based on the average global market price of oil. These amendments eliminate the risk that, due to geopolitical developments and sharp fluctuations in oil prices, the EU price cap applicable to Russian-origin crude oil and petroleum products could increase. This price cap determines the maximum price at which EU persons may provide technical assistance and other services related to the maritime transport of such oil and petroleum products.

Ban on transactions with designated oil refineries, ports, locks and airports

The 21st sanctions package adds one more third-country oil refinery to the list of designated entities. The refinery processes or blends petroleum products or mineral products of Russian origin. The list has also been expanded to include specific Russian ports, locks and airports with which transactions are prohibited.

Financial sector

Stricter restrictions on third-country crypto-asset service providers to prevent sanctions circumvention

A transaction ban has already been imposed on engaging in any transactions with legal entities based outside the EU that provide crypto-asset services or payment services to persons who are included on sanctions lists or who otherwise significantly impede the achievement of the sanction’s objectives set forth in the regulations. In this list multiple financial institutions have been added, broadening the transaction ban.

The 21st sanctions package introduces a new annex which may in the future include any legal entities from third countries that provide crypto-asset services and whose activities are used to circumvent EU sanctions or violate prohibitions established in the field of crypto-assets. This annex will include entities that have systematically and persistently failed to prevent the provision of crypto-asset services thereby frustrating the provisions of sanctions regulations.

Although no persons have been listed in the annex at this stage, the introduction of this mechanism sends a clear signal to third-country crypto-asset service providers that they may become subject to EU sanctions if they are involved in transactions that violate the EU sanctions regime.

Expanded list of credit institutions subject to the transaction ban

The list of credit institutions subject to the transaction ban has been expanded by an additional 33 credit institutions. As a result, the total number of credit institutions with which transactions are prohibited now exceeds 100.

One credit institution from Kyrgyzstan has been added to the list of third-country banks using the Central Bank of Russia's Financial Messaging System (SPFS). In addition, more than 20 financial institutions providing crypto-asset services that significantly undermine the objectives of the EU sanctions have been added to the list. It is now prohibited to engage in transactions or otherwise conduct business with these financial institutions.

Other sectoral sanctions

The EU expands sanctions against persons supporting Russia's defence and security sector

The EU has imposed sanctions on 51 legal entities which are a part of Russia’s military and industrial complex or supporting it in its war of aggression against Ukraine, on whom and on which tighter export restrictions are imposed regarding dual-use goods and technology, as well as regarding goods and technology which might contribute to the technological enhancement of Russia’s defence and security sector. The list includes legal persons established both in Russia and in third countries.

Expanded list of goods and technologies subject to export and transit restrictions

By adopting the 21st sanctions package, the list to include goods and technologies that could contribute to the enhancement of Russia’s military and technological capabilities or the development of its defence and security sectors has been supplemented. The goods and technologies included on this list are not only subject to export ban to Russia, but it is also prohibited to transport the items in transit through Russian territory. The export ban will apply to certain aviation-related products intended for use in unmanned aerial vehicles (UAVs), jamming and interception systems, as well as launch systems.

Sanctions against Belarus

In view of Belarus's involvement in Russia's war against Ukraine, the EU has also adopted new restrictive measures against Belarus. Some of these measures have been aligned with the new restrictions imposed on Russia.

The adopted measures include listing additional persons who contribute to enhancing the military and technological capabilities of Belarus or Russia. In addition, the export ban has been expanded to cover specific goods, including certain aviation-related products intended for use in unmanned aerial vehicles (UAVs).

More information on the new sanctions package in the Official Journal of the EU.

Since April 2024, FIU Latvia has been the national competent authority for sanctions implementation in Latvia, working with Latvian and international partners to strengthen the effectiveness of sanctions.