The 18th package of EU-Russia sanctions

After lengthy negotiations, the EU further tightened its sanctions against Russia in response to its war of aggression in Ukraine last week, with what is now the 18th package of sanctions. These negotiations dragged on, particularly due to national interests in long-term gas supply contracts with Russia.

1. Measures to limit Russia’s revenues from the energy sector

Further restricting Russia’s revenues from the energy sector is one of the most notable objectives of the 18th package of sanctions, which is once again comprehensive and multi-layered in its design.

Back in December 2022, the EU adopted the so-called oil price cap, which prohibits the sale, the provision of certain services—in particular insurance and brokering services—for the sale, brokering, or transport of crude oil originating in Russia if this crude oil was traded above the price cap (Article 3n of EU Regulation 833/2014). The EU has now tightened the oil price cap by reducing the maximum permissible price per barrel of crude oil from USD 60.00 to USD 47.60 (Annex XXVIII of EU Regulation 833/2014). The price cap for crude oil is to be adjusted regularly so that it is at least 15% below the world market price for crude oil.

The oil price cap is now accompanied by a ban on importing or purchasing petroleum products into the EU that have been produced in a third country from Russian crude oil. It should be noted that Nayara Energy Limited, which operates a refinery based in India and is 49% owned by Rosneft, Russia’s state-owned oil company, is now listed under No. 639 on the sanctions list. However, it should also be noted that there is a notable exemption in the energy sector. For example, coal from Kazakhstan is exempt from the transaction ban in certain cases on the grounds that this could otherwise have a negative impact on energy security in third countries. Similar regulations can be found in the field of civil nuclear energy use.

A potentially lucrative business area is subject to the transaction ban and deserves special mention because it has also received media attention: Natural gas supplies via the Nord Stream and Nord Stream 2 pipelines will not simply be possible because the pipelines, which are currently not operational, may not be repaired. All transactions relating to the completion, operation, maintenance, or use of the pipelines or parts thereof are prohibited.

2. Various shadow fleet operators listed

As with the 17th package of sanctions, the 18th package again focused on Russia’s shadow fleet and maritime economy. In total, the European Union has added 14 individuals and 40 companies or organizations to the list under the 18th package of sanctions. Various actors in the shadow fleet were listed in particular:

First, the listed fleet was expanded by 105 ships that have since been identified as belonging to the fleet of ships involved in trade in violation of sanctions. The number of ships listed by the EU has now risen to 444. In particular, it is prohibited to grant these ships access to ports or locks, either directly or indirectly, to provide services to these ships, or to acquire, sell, charter, or operate these ships (Art. 3s EU Regulation 833/2014).

In addition, LLC Volgotrans, a tanker operator in Russia, and various service providers in the United Arab Emirates, Twister Shipmanagement LLC-FZ alias Starfish Ship Management LLC-FZ, Tarabya Logistics Ltd, Monolink Group FZCO, 2Rivers DMCC and 2Rivers PTE Ltd, both owned by Vetus Investments, Milavous Group Ltd, alias Milavous Group or Milavus Group, Admiral Group, alias Admiral Group Shipping Company.

We have already reported on the sensational incident involving the ship “JAGUAR”, IMO No. 9293002. The ship has since been renamed “ARGENT”. Its Indian captain is now also on the sanctions lists. The reason given for this listing is that the ship he commands is sailing without reliable liability insurance coverage. It is also the only ship managed by Sapang Shipping Inc as owner and ship manager and Zhu Jiang Shipmanagement Co., Ltd as technical manager, which indicates that it is under non-transparent corporate management. Sapang Shipping Inc, a company based in Mauritius, is also listed, as are its service provider Redbird Corporate Services Ltd and Zhu Jiang Shipmanagement Co., Ltd, registered in Hong Kong.

Also based in Hong Kong and now listed is Bellatrix Energy Limited, alias Bellatrix Energy or BX Energy Ltd. The reason given for the listing was that this company is part of a network of companies that facilitate the delivery and export of Russian oil, in particular from Rosneft, and are organized around the aforementioned 2Rivers Group. Shareholders have the same address in Dubai, and it can be assumed that sanctions are being circumvented through ship-to-ship transfers.

Looking at the reasons for the listings, it becomes clear how much investigative work goes into preparing the sanctions packages. This is particularly welcome given that it is the only way to design effective regulations. On the other hand, the scope of the findings also highlights the expectations that are likely to be placed on EU economic operators in terms of due diligence and compliance.

The United Arab Emirates had already made a name for itself as a haven for Russian luxury yachts. In this respect, it is not surprising that it is also a hotspot for companies that can be linked to oil transactions that violate sanctions.

The large number of nationalities now on the sanctions lists is worrying because it highlights how ineffective EU sanctions law is when there are ways to get around them. On the other hand, the number of countries friendly to Russia is not so large that Russia has a particularly comfortable operational matrix for pushing through its interests in breaking the oil price cap. As we already pointed out in our article on the 17th sanctions package, the position of oil-importing countries is crucial, with the so-called BRIC countries deserving particular attention.

Smaller countries are also worth mentioning. One of these countries is Gabon. It has distinguished itself in the maritime sector as a “shadow fleet flag” country, and the 18th EU sanctions package has addressed this issue: The company that operates the international flag register of Gabon and the Comoros was listed. After the start of the war, it flagged “shadow fleet” ships, thereby contributing to the initial ineffectiveness of the listing of the Russian register and the ban on Russian-flagged ships from the EU.

In addition to the aforementioned companies from the United Arab Emirates, Iranian and Azerbaijani businesspeople and companies based in Hong Kong and Singapore were listed whose activities were also proven to extend to Russian oil deals and who were relevant to the economic success of these deals by concealing the origin of Russian crude oil and petroleum products, for example by mixing and ship-to-ship transfers.

The listing of these companies and individuals may not directly raise hopes that these individuals will immediately cease their activities in a lucrative market environment. Nevertheless, the listing certainly sends the right signal that these activities will not simply be tolerated. As it is to be expected that these individuals may develop new vehicles to continue doing business in this environment, particular caution is advised to avoid involvement in circumvention transactions with business partners who may be associated with the listed individuals.

In connection with sanctions circumvention, the EU has listed additional individuals and organizations, including Chinese nationals who were involved in circumventing sanctions. As reported in the press, the government in Beijing has therefore felt compelled to impose sanctions against the EU or at least threaten to do so. These developments once again highlight how important it is for economic operators to keep a close eye on geopolitical developments and sanctions law measures, both for strategic decisions and at the level of internal corporate compliance.

3. Measures in other areas

The measure known as SWIFT exclusion (Art. 5h EU Regulation 833/2014) has been extended to a comprehensive transaction ban. This extends to more than 20 additional financial institutions in Russia, effective August 9, 2025.For all transactions with Russian banks, such as the payment of wages to Russian seafarers, it is therefore strongly recommended to check whether any of these banks and/or a financial institution associated with these banks is receiving funds. If so, payments should be avoided. An important point of the check will not be easily identified by so-called sanction trackers. This is because, in the context of compliance and in accordance with Article 5aa of EU Regulation 833/2014, the transaction ban must also be effectively enforced against subsidiaries of listed banks.

This requires a check to be made as to whether a company within or outside Russia is a subsidiary of a listed person or entity. In order to make the correct assessment here, factors such as the direct or indirect obtaining of approvals that subsidiaries may have to obtain from a listed company in accordance with internal company agreements or other legal requirements, as well as the execution of their instructions, directly or indirectly, play an important role. In order to make this assessment, it is therefore necessary to review both corporate structures and legal requirements. These checks will likely be carried out either by in-house compliance specialists or by external lawyers.

The 18th EU sanctions package also counters Russia’s efforts to undermine sanctions measures aimed at disconnecting it from the SWIFT system by extending the transaction ban to users of the Russian Central Bank’s financial messaging system (SPFS). A company that uses SPFS is subject to the transaction ban. It should be noted here that this covers both direct and indirect transactions. This makes it more difficult to check who may be even indirectly receiving services, particularly in the financial sector.

In addition, Article 5aa of EU Regulation 833/2014 has been revised and now contains an exemption clause that allows the competent authorities to grant exemptions for organizations established in the European Union that would otherwise be subject to the extended transaction ban. The concept is designed in such a way that these companies are subject to a public trust or a similar public firewall measure, which allows them to be exempted from the transaction ban. Whether an organization meets this requirement is therefore also a relevant point for legal reviews as to whether a transaction with the organization in question is possible.

As part of the expansion of sanctions against Russia, the EU has also imposed further sanctions on Belarus. For example, the SWIFT exclusion has been extended to Belarus to a complete transaction ban. In addition, the import of military equipment originating in or from Belarus has been banned (Art. 1aa EC Regulation 765/2006) and the goods-related sanctions have been supplemented.

4. Assessment

The 18th package of sanctions is once again a comprehensive set of measures, some of which have been drafted with impressive precision, aimed at making the EU’s sanctions more effective. While the reduction of the oil price cap is aimed directly at Russia’s energy sector revenues, some other measures are more of a response to mechanisms developed by Russia to circumvent existing sanctions. This includes, in particular, the extended transaction ban, but also all measures against ships and persons and organizations operating in the maritime business environment that generate revenue for Russia through the operation of ships in the shadow fleet.

It is to be expected that pressure on Russia will grow to secure ship tonnage in new ways. Therefore, in our view, particular caution is advised in this area and when selling tonnage.

It is important – especially for companies in the maritime industry – to keep an eye on the extended transaction ban to ensure, for example, that no payments are made to a listed bank or subsidiary. For players in the maritime industry, the 18th EU sanctions package therefore means once again being particularly vigilant to ensure compliance with the sanctions regulations.

Given the detailed nature of the regulations, legal advice should be sought if a need for advice is identified. Overview publications cannot replace advice in individual cases. This also applies to this article.

Do you have any further questions on these or other topics? Our experts will be happy to support you with solutions tailored to your individual needs.