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

Since 2022, the EU has progressively tightened its sanctions against Russia — with increasing intensity and legal complexity. At the latest, since the 14th sanctions package, a new phase has begun: Compliance requirements, risk management, and contract design have been substantially expanded.

The sanctions packages 14 to 17 not only brought new listings and trade restrictions. More significantly: new compliance requirements, far-reaching due diligence and risk management obligations, 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 increasingly tangible.

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

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

14th Sanctions Package: New Compliance Requirements

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

Especially relevant:

1. "Best Effort" Obligation of EU Companies to Prevent Sanctions Evasion by Their Non-EU Subsidiaries

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

   The implementation of this Best Effort obligation is a challenge: Companies should expand their Compliance Management Systems with appropriate control mechanisms and awareness measures, e.g., through

   • corporate/group-wide (export control) guidelines,

   • compliance clauses in internal policies and intercompany agreements,

   • training for subsidiaries,

   • contractual protection against joint venture partners/shareholders,

   • monitorable and auditable control systems.

   
   

2. Extended Due Diligence on "Common High Priority" Goods ("CHP Goods")

   The CHP goods according to Annex XL of the Russia Regulation, including, but not limited to, electronic integrated circuits, semiconductor devices, and ball bearings, are particularly in focus.

   Since December 26, 2024, EU companies dealing with such goods or indirectly contacting them must comply with special due diligence obligations under Art. 12gb of the Russia Regulation.

   EU companies must then take appropriate measures to

   1. identify, assess, and document the risks of a possible 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 do not directly export the affected goods but collaborate with suppliers or subsidiaries outside the EU. Even without a direct Russia connection, scenarios where these goods could reach Russia through third parties and detours must be considered.

   EU companies must ensure that these requirements are also met by their non-EU subsidiaries.

   
   

3. "No Russia" Clause — Clarification and Extension

   The obligation for EU companies to include a so-called No Russia clause in contracts concerning the distribution or export of CHP goods was already introduced in Art. 12g of the Russia Regulation with the 12th sanctions package (for more on this, refer to our Insight from April 27, 2024).

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

   2. Extension
      The obligation to include a "No-Russia" clause has also been extended to intellectual property, know-how, or trade secrets related to goods in Annex XL:
      When selling, licensing, or transferring such rights to non-EU contractual partners, EU companies must

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

      • commit their contractual partners to pass on corresponding usage restrictions to sublicenses and report any violations, and

      • foresee contractual remedies in the event of violations.

   
   

4. Ban on Using the Russian System for Financial Communications ("SPFS")

   Since June 25, 2024, EU companies are 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 Evasion Combating, Shadow Fleet, and Global Supply and Procurement Networks

With the 15th to 17th sanctions packages, the EU has significantly expanded its focus on preventing evasion scenarios. The core includes third countries, global supply networks, and the "shadow fleet" to circumvent price caps on oil.

Key measures:

• Targeted Sanctions Against Third Country Actors
  Companies, individuals, and organizations, including in China, the UAE, Turkey, Serbia, Vietnam, and Hong Kong, have been listed — especially with connections to CHP goods or military technology.
  
  

• Massive Expansion of Sanctions Lists
  Over 260 additional ships of the "shadow fleet" have been listed — accompanied by port access bans and service prohibitions.
  
  

• New export and import bans, including:

  • comprehensive import bans on Russian aluminum (with transition periods and quota mechanisms);

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

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

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

Companies should review their global logistics and supply chain processes as well as urgently review, update, and, if necessary, optimize their procedures for sanction list checks, business partner due diligence (KYC processes) — beyond classical export control requirements.

Outlook: 18th Sanctions Package

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

• Energy & Oil Price Cap

  • Transaction ban for the Nord Stream 1 and 2 pipelines

  • Lowering the oil price cap to USD 45 per barrel
    
    

• Shadow Fleet
  Listing of around 77 additional 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.

Action Recommendations for Companies

• Review and Adjust Compliance Management System: Check, reassess, and document export control, subsidiaries, and third-country relationships.

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

• Update Sanction List Screening and KYC Processes

• Revise Contracts/General Terms and Conditions: Systematically integrate No Russia clauses, intellectual property rules, and sanction clauses.

• Involve Subsidiaries: Implement directives, training, responsibilities, and controls.

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

• Monitor Upcoming Packages: Track developments, identify the need for adjustments early.

INN.LAW – Your Partner for Sanctions Compliance

The legal demands are growing – we help you keep an overview and act purposefully. Whether export processes, contract clauses, or compliance structures: We provide clear, well-founded advice with a focus on what matters.

Please feel free to contact us – we look forward to the exchange.