EU-Russia sanctions: From the 14th to the 18th sanctions package

Since 2022, the EU has progressively intensified its sanctions against Russia, with increasing intensity and growing legal complexity. By the 14th sanctions package at the latest, a new phase has begun: The demands on compliance, risk management, and contract design have been substantially expanded.

The 14th to 17th sanctions packages brought not only new listings and trade restrictions. Far more significant: new compliance requirements, far-reaching due diligence and risk management guidelines, 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 due to sanctions evasion has become 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 main developments — and specific recommendations for your company:

14th Sanctions Package: New Compliance Requirements

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

Especially relevant:

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

   According to Art. 8a Russia-VO, EU companies are obliged to ensure "to the best of their ability" that their non-EU subsidiaries do not circumvent Russia sanctions. This applies only 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, e.g. through

   • Group-wide (export control) policies,

   • compliance clauses in internal guidelines and intercompany agreements,

   • training for subsidiaries,

   • contractual assurances with joint venture partners/shareholders,

   • monitorable and verifiable control systems.

   
   

2. Expanded Due Diligence for "Common High Priority" Goods ("CHP-Goods")

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

   Since December 26, 2024, EU companies that trade with such goods or come into contact indirectly must adhere to special due diligence obligations according to Art. 12gb of the Russia-VO.

   EU companies must take appropriate measures to

   1. identify, assess, and document the risks of potential redirection 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 also apply if EU companies do not export the affected goods themselves but work with suppliers or subsidiaries outside the EU. Even without direct reference to Russia, scenarios must be considered in which these goods could reach Russia through third parties and detours.

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

   
   

3. "No Russia" Clause – Clarification and Expansion

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

   1. Clarification

      The 14th sanctions package clarified that there is no obligation to include a No Russia clause in contracts over CNC machining centers, lathes and milling machines, and corresponding spare parts (Art. 12g Paragraph 2 lit. a Russia-VO).
      
      

   2. Expansion

      The obligation to include a "No Russia" clause was also extended to intellectual property, know-how, or business secrets relating to goods in Annex XL:

   When selling, licensing, or transferring such rights to contracting partners from non-EU countries, EU companies must

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

   • require their partners to pass on corresponding usage restrictions to sublicensees and report any violations, and

   • provide contractual remedies in case of violations.

   
   

4. Ban on the Use of the Russian System for Financial Messages ("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 Combatting Evasion, Shadow Fleet, and Global Supply and Procurement Networks

With sanctions packages 15 to 17, the EU significantly expanded its focus on preventing evasion offenses. The focus is on third countries, global supply networks, and the "shadow fleet" to evade oil price caps.

Core measures:

• Targeted Sanctions Against Third Country Actors
  Companies, individuals, and organizations in countries such as China, the UAE, Turkey, Serbia, Vietnam, and Hong Kong were listed, especially in connection to CHP goods or military technology.

• Massive Expansion of Sanction Lists

• More than 260 additional ships of the "shadow fleet" were listed, accompanied by port access bans and service bans.

• New export and import bans, including:

  • comprehensive import bans on Russian aluminum (with transitional period and quota mechanism);

  • export bans for 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 business secrets can no longer be licensed or transferred to Russian recipients.

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

Outlook: 18th Sanctions Package

The EU Commission has already 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 US$ 45 per barrel

• Shadow Fleet
  Listing about 77 more ships of the shadow fleet and 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 for technology, machinery, metals, plastics, and chemicals totaling approximately EUR 2.5 billion

Recommendations for Companies

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

• 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 Contractual Agreements/Terms and Conditions: Systematically integrate No Russia clauses, intellectual property provisions, and sanctions clauses.

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

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

• Monitor Upcoming Packages: Follow developments, early identification of adaptation needs.

INN.LAW – Your Partner for Sanctions Compliance

The legal requirements are growing — we help you keep track and take targeted action. Whether export processes, contractual clauses, or compliance structures: We provide clear, well-founded advice with an eye for the essentials.

Feel free to contact us — we look forward to the exchange.