EU adopts 18th sanctions package against Russia

On 19 July 2025, the EU published its 18^th package of sanctions against Russia. The package introduces several new measures and updates in relation to the energy, financial, and defence sectors. Key changes include new and expanded measures concerning Russian oil and petroleum products transactions, a new transaction ban targeting certain natural gas pipelines, expanded export restrictions and the replacement of the current SWIFT ban on Russia-related banks by a transaction ban. Also, 55 parties were added to the EU's asset freeze list. On the same day, the EU published additional measures against Belarus for further alignment with the sanctions against Russia.

We provide an overview of the key 18^th package measures¹ below.

New and Expanded Measures Targeting the Energy Sector

Revision of the oil price cap

• The current price cap of USD 60 per barrel of crude oil (i.e. for Russia-related products exempt from the EU's maritime transport services ban) will be lowered to USD 47.60 as of 3 September 2025. Pre-existing contracts under the current price cap can be executed until 18 October 2025. Of the G7 members that agreed to apply the original USD 60 price cap, only the EU and the UK² have so far lowered the crude oil price cap to USD 47.60.
• The EU has also introduced a mechanism to adjust the oil price cap every six months to ensure it remains 15% below the market price for Russian crude oil. This will be calculated based on an average of the first 22 weeks of each review period, with the current period starting on 15 July 2025.

Nord Stream transaction ban

• The EU has introduced a new ban targeting transactions in connection with the Nord Stream 1 and 2 pipelines, with regard to the completion, operation, maintenance or use of the pipelines. The transaction ban includes carve-outs and derogation grounds covering, among others, settlements or judicial/arbitration proceedings in connection with the pipelines, or regular maintenance services which are strictly necessary to prevent environmental and safety risks or a negative impact on the fisheries sector.

New import ban on third country petroleum products obtained from Russian crude oil

• Starting on 21 January 2026, the EU is expanding the existing import ban in relation to Russian crude oil and petroleum products to also prohibit the direct or indirect purchase, import, or transfer of petroleum products under tariff heading 2710 obtained in any third country from Russian crude oil, as well as certain related assistance/services (e.g. financing, insurance and brokering).
• Importantly and similarly to what it is currently in place for the import of restricted iron/steel products, EU importers of relevant third country products will from such date need to provide evidence of the country of origin of the crude oil used for refining of the product imports; this is unless the imports are from certain partner countries (currently Canada, Norway, Switzerland, UK and US).
• Also, third country petroleum products imported from countries that are net exporters of crude oil will be presumed as not being obtained from Russian crude oil, unless a Member State authority has indications to the contrary.

Shadow fleet listings

• Existing EU restrictions, including on port access and certain services, have been extended to 104 additional vessels of Russia's so-called shadow fleet while three vessels have been removed, bringing the total number of targeted vessels to more than 400.

Derogation to import ban on Russian LNG

• With respect to the existing EU import ban on Russia-related LNG, the EU has introduced a new derogation ground in relation to restricted LNG for any Member State not directly connected to the EU's interconnected natural gas system, where restricted activities are to ensure such Member State's energy supply.

New Restrictions Targeting the Financial Services Sector

Bank transaction bans

• The EU has changed the existing SWIFT ban targeting listed Russia-related banks into a transaction ban, and targeted more banks under the new ban. This means in addition to 23 listed Russian banks that were targeted by the SWIFT ban, another 22 Russian banks have been added to the list (for which the new transaction ban will apply as of 9 August 2025), and direct or indirect transactions with these listed banks and certain of their affiliates will generally be prohibited. Certain carve-outs (e.g. for certain Russian residents who are Member State nationals) and derogation grounds are available.
• The EU has expanded the existing transaction bans in relation to third country financial and credit institutions and crypto-asset service providers that use Russia's SPFS system and/or provide services frustrating certain EU sanctions against Russia, including by widening the grounds for listing of targeted entities. In addition, the EU has listed two Chinese banks as targeted by the transaction ban as of 9 August 2025.

RDIF transaction ban

• The EU has introduced a new transaction ban targeting the Russian Direct Investment Fund (RDIF) and certain linked companies, including listed non-EU RDIF-related significant investments and investment/financial service providers. Four Russian companies considered to involve significant RDIF investments have been listed, but no service providers.

Export ban on software management systems

• The EU has introduced a new ban on any direct or indirect sale, supply, transfer, export or provision to the Russian government or Russian companies of listed software used for banking and financial services, i.e. for online and mobile banking, loan management, automated teller machines (ATM) and point of sale (POS) integration, regulatory reporting, and investment banking. There is a wind-down period in relation to pre-existing contracts until 30 September 2025, and certain derogations apply.

New and Expanded Export Restrictions

Export ban on goods that might be used by the Russian defence industry

• Under the existing EU export ban targeting items which might contribute to Russia's military/technological enhancement or the development of the defence and security sector, the list of restricted items has been expanded to include, for example, computer numerical control (CNC) machines and constituent chemicals for propellants.
• The EU has introduced a "catch-all" clause allowing Member State authorities to require an authorization for export of items listed in Annex VII to any third country if the exporter has been informed by the competent authority that such items are or may be intended for a person or entity in Russia or for use in Russia.
• The EU has added 15 Russian entities, 4 Turkish entities and 7 entities in China (including Hong Kong) to the list of entities subject to tighter export restrictions regarding dual-use items and Annex VII items.

Export/transit ban on industrial goods

• Under the EU's existing export ban targeting items which could contribute to the enhancement of Russian industrial capacities, the list of restricted items has been expanded to include a significant number of additional goods, including minerals such as molybdenum ore, chemical products such as fluorine, sulphur and carbon, as well as compounds used in the production of consumer goods such as glycosides and sugars, and certain enzymes. It also now includes additional plastics, iron and steel, aluminium, and machinery items. Along with certain exceptions and derogations, a transition period applies in relation to newly listed items, allowing pre-existing contracts to be executed until 21 October 2025; for some items this period applies until 21 January 2026.
• The EU has expanded the existing transit bans targeting certain restricted industrial goods that must not transit through Russian territory when exported from the EU; this involves a range of restricted items used in the construction, transport, and energy sectors, including iron/steel structures, heat-exchange units, certain machinery, plant and laboratory equipment and certain trailers, road tractors and semi-trailers or parts thereof.

Dispute Protections

• Concerning certain investor-to-state dispute settlement (ISDS) proceedings/claims related to the EU sanctions against Russia (e.g. brought by EU listed persons under bilateral investment treaties), Member States have been given new protections under EU law; this includes the right not to recognize, give effect or enforce certain related non-EU injunctions, orders, reliefs or judgments and the ability to recover damages incurred as per such claims.

Asset Freeze Restrictions

• The EU has designated 41 entities and 14 individuals in relation to Russia on the EU asset freeze list, with entry into force on 19 July 2025. The new listings include, for example, various individuals or entities deemed to be involved in transport of Russian crude oil or petroleum products, and development, production or supply of military and technology equipment supporting Russia's military and industrial complex. They also include the Indian entity Nayara Energy Limited, which operates a crude oil refinery and is part-owned by Russia's Rosneft.

Belarus

• The sectoral sanctions against Belarus have also been amended, and they are mainly intended to ensure alignment with the sectoral sanctions against Russia. The key measures are:
  • The existing SWIFT ban targeting listed Belarus-related banks has been changed into a transaction ban.
  • Under the existing EU export bans targeting items that might contribute to Belarus's industrial and military/technological enhancement, the lists of restricted items have been expanded, and more items are subject to Belarus transit restrictions. The EU has also introduced a "catch-all" clause allowing Member State authorities to require an authorization for export of certain restricted items to any third country.
  • New Member State protections regarding ISDS proceedings/claims related to certain EU sanctions against Belarus.

In addition, the EU has designated eight new entities operating in the Belarusian military and defence sectors on the EU asset freeze list.

Kate Malone (Trainee, Brussels) and Ruth Benbow (Knowledge Manager, London) contributed to the development of this publication.

_{1 The key measures described below were published in the EU's Official Journal on 19 July 2025, and are available here. The legal amendments introduced through the 18^th EU sanctions package entered into force on 19 July (asset freezes) or 20 July (sectoral measures) in relation to EU Regulation 833/2014 (sectoral sanctions against Russia) and EU Regulation 765/2006 (Belarus), and EU Regulation 269/2014 (Russia-related asset freezes).
2 UK's Foreign and Commonwealth & Development Office, "UK tightens Oil Price Cap in blow to Putin's war machine," 18 July 2025, available here.} 

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_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}

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