EU-Russia Sanctions: From the 14th to the 18th Sanctions Package

Since 2022, the EU has gradually intensified its sanctions against Russia - with increasing intensity and increasing legal complexity. At the latest since the 14th sanctions package, a new phase has begun: The requirements for compliance, risk management, and contract design have been substantially expanded.

The sanctions packages 14 to 17 brought not only new listings and trade restrictions. Much more serious: New compliance requirements, far-reaching due diligence and risk management specifications, as well as extraterritorial effects - especially for export-oriented companies with non-European subsidiaries. At the same time, the risk of fines and criminal proceedings for sanctions evasion is becoming more concrete.

The 18th sanctions package has already been announced. Companies are well advised to make their processes and structures resilient and legally secure now.

Below we provide you with a compact overview of the most important developments - and concrete recommendations for action for your company:

14th sanctions package: New compliance requirements

On 24 June 2024, the 14th sanctions package further tightened the EU regulations VO (EU) No. 833/2014 ("Russia Regulation") and VO (EU) No. 269/2014.

Particularly relevant:

1. "Best Effort" obligation of EU companies to prevent sanctions evasion by their non-EU subsidiaries

   According to Art. 8a Russia Regulation, EU companies are obliged to use their "best efforts" to ensure that their subsidiaries not based in the EU do not circumvent the Russia sanctions. This only applies to subsidiaries that are at least 50% owned or under the legal/factual control of an EU company.

   Implementing this best effort obligation is a challenge: Companies should expand their Compliance Management Systems with appropriate control mechanisms and awareness measures, such as through

   • Group-wide (export control) policies,

   • Compliance clauses in internal policies and intercompany agreements,

   • training for subsidiaries,

   • contractual safeguards against joint venture partners/shareholders,

   • monitorable and auditable control systems.

   
   

2. Extended due diligence for "Common High Priority" (CHP) goods

   The CHP goods according to Annex XL of the Russia Regulation, including, among others, electronically integrated circuits, semiconductor components, and ball bearings, are particularly in focus.

   Since 26 December 2024, for EU companies dealing with such goods or indirectly coming into contact with them, special due diligence obligations apply according to Art. 12gb of the Russia Regulation.

   EU companies must then take appropriate measures to

   1. identify, assess, and document the risks of a potential diversion of these goods to Russia or for use in Russia (risk analysis),

   2. minimize identified risks and establish effective risk mitigation strategies (risk management).

   These obligations apply even if EU companies are not exporting the affected goods themselves but are working with suppliers or subsidiaries outside the EU. Even without a direct link to Russia, constellations must be considered where these goods could reach Russia through third parties and detours.

   EU companies must ensure that these requirements are also met by their subsidiaries outside the EU.

   
   

3. "No Russia" clause – clarification and extension

   As early as the 12th sanctions package, Art. 12g of the Russia Regulation introduced the obligation for EU companies to include a so-called No Russia clause in contracts for the distribution or export of CHP goods (see our Insight from 27 April 2024).

   1. Clarification
      The 14th sanctions package clarified that there is no obligation to include a No Russia clause in contracts for CNC machining centers, lathes and milling machines, and corresponding spare parts (Art. 12g paragraph 2 letter a Russia Regulation).
      
      

   2. Extension
      The obligation to include a "No Russia" clause was extended to cover intellectual property, know-how, or trade secrets related to goods in Annex XL:
      In the sale, licensing, or transfer of such rights to contract partners from non-EU countries, EU companies must

      • contractually prohibit the use of these rights concerning goods in Annex XL that are directly or indirectly intended for the Russian market,

      • obligate their contract partners to pass on corresponding usage restrictions to sublicensees and to report any violations and

      • provide contractual remedies in the event of breaches.

   
   

4. Prohibition of using the Russian financial messaging system ("SPFS")

   Since 25 June 2024, EU companies have been prohibited from connecting to the payment system SPFS operated by the Russian Central Bank or similar services. Transactions with users of such systems are also prohibited.

15th to 17th sanctions package: Focus on circumvention prevention, shadow fleet, and global supply and procurement networks

With the sanctions packages 15 to 17, the EU has significantly expanded its focus on preventing circumvention scenarios. The focus is on third countries, global supply networks, and the "shadow fleet" for circumventing oil price caps.

Key measures:

• Targeted sanctions against third-country actors
  Companies, individuals, and organizations in, among others, China, the UAE, Turkey, Serbia, Vietnam, and Hong Kong were listed - especially with connections to CHP goods or military technology.
  
  

• Massive expansion of sanctions lists
  Over 260 additional ships of the "shadow fleet" were listed - associated with port access bans and service prohibitions.
  
  

• New export and import bans, including:

  • Comprehensive import bans on Russian aluminum (with transition period and quota mechanism);

  • export bans on CNC software, components and spare parts for CNC machines, special chemicals, chemical precursors, glass;

  • software for oil and gas exploration as well as construction services for Russian energy infrastructure are now prohibited;

  • IP rights and trade secrets may no longer be licensed or transferred to Russian recipients.

Companies should review their global logistics and supply chain processes as well as urgently review, update, and if necessary, optimize their procedures for sanctions list screening, business partner due diligence (KYC processes) - even beyond the classic export control requirements.

Outlook: 18th sanctions package

The EU Commission presented its proposals for the upcoming 18th sanctions package on 10 June 2025. The key contents:

• Energy & Oil Price Cap

  • Transaction ban for the Nord Stream 1 and 2 pipelines

  • Reduction of the oil price cap to USD 45 per barrel
    
    

• Shadow Fleet
  Listing about 77 more ships of the shadow fleet and a transaction ban in connection with these ships
  
  

• Banking Sector
  Complete transaction ban with over 22 Russian banks
  
  

• Further Export Restrictions

  • Sanctioning the Russian Direct Investment Fund and associated actors

  • new export bans on technology, machinery, metals, plastics, and chemicals amounting to approximately EUR 2.5 billion.

Recommendations for action for companies

• Review and adjust compliance management system: Check, reassess and document export control, subsidiaries, and third country relations.

• Strengthen risk management: Identify CHP goods, review supply chains, conduct risk analyses, anchor risk mitigation, and monitoring strategically.

• Update sanctions list screening and KYC processes

• Revise contract terms/General Terms and Conditions: Systematically integrate No Russia clauses, protection regulations, and sanction clauses.

• Involve subsidiaries: Implement instructions, training, responsibilities, and controls.

• Communication & Training: Introduce guidance notes and training for affected company areas (procurement, sales).

• Monitor upcoming packages: Follow developments, identify adaptation needs early.