Overview of the EU's 16th sanctions package

What you need to know

• The new package expands restrictions on Russia, makes corresponding alignments to the Belarus sanctions, and strengthens measures against Crimea / Sevastopol and the non-government-controlled areas of Ukraine.
• Expanded "best efforts" obligations require EU companies to ensure that their non-EU subsidiaries do not participate in activities that undermine any of the EU's key Russia sanctions, including asset freezing measures.
• The EU has targeted 34 additional entities located in third countries with restrictions relating to dual-use and advanced technology items. Other trade measures include a ban on the import of Russian primary aluminium and new restrictions on provision of construction services and assistance relating to oil exploration projects.
• The European Commission has new powers to exchange information with sanctions authorities in the US, UK and other partner countries. This is a potential game-changer in cross-border cooperation on enforcement of Russia sanctions.

On 24 February 2025, three years after Russia's invasion of Ukraine, the EU adopted its 16th package of sanctions against Russia. The new measures target Russia's energy, transport, infrastructure, and financial services sectors, and introduce new anti-circumvention provisions. 

Certain measures of the 16th package are also mirrored in the updated sanctions regime against Belarus. At the same time, the EU has also strengthened the measures against Crimea and Sevastopol, and the non-government-controlled areas of Donetsk, Kherson, Luhansk and Zaporizhzhia Oblasts (the Russia-Controlled Territories). 

Expanded "best efforts" obligation

For better alignment between the Russia related sanctions regulations, the EU has replicated the "best efforts" obligation in Council Regulation (EU) No 269/2014 (Regulation 269/2014) as well as the sanctions regulations concerning the Russia-Controlled Territories. 

First introduced in Council Regulation (EU) No 833/2014 (Regulation 833/2014) with the 14th sanctions package, this provision requires EU persons to use their "best efforts" to ensure that the non-EU entities that they own or control do not participate in activities that "undermine" the EU's Russia sanctions in relation to the war in Ukraine, including the asset freezing sanctions in Regulation 269/2014. See our July 2024 update on the 14th sanctions package, which provides details on the scope and interpretation of this obligation.

Asset freezing sanctions

The new package imposes asset freezing measures on 48 individuals and 35 entities. The updated measures also expand the listing criteria to include persons that form part of Russia's shadow fleet or that support Russia’s military and industrial complex.

Trade sanctions

Aluminium imports 

In addition to the existing import ban for processed aluminium goods, the EU has banned imports of primary aluminium from Russia and Belarus. The measure against Russia is set to apply from 26 February 2026 following a 12‑month transition phase. During this period, a quota of up to 275,000 tonnes will be allowed to ensure a smoother adjustment for businesses. In addition, there is an exemption between 26 February 2026 and 31 December 2026 to allow the wind-down of contracts concluded before 25 February 2025, provided the volume imported does not exceed 50,000 tonnes. There is a three-month wind-down exemption for imports from Belarus.

Export restrictions 

The EU has imposed targeted export restrictions in relation to dual-use and advanced technology items on 53 additional entities, including 34 entities based in China, India, Kazakhstan, the UAE, Uzbekistan, Türkiye, and Singapore. 

The new package also adds five additional categories to the list of restricted advanced technology items, including: 

• dual-use chemical precursors to produce chloropicrin and other riot control agents used in chemical weapons by Russia;
• software related to Computer Numerical Control (CNC) machine tools used to manufacture weapons, and video-game controllers used by the Russian army to pilot drones on the battlefield; and
• chromium ores and compounds due to their military applications.

The package also expands export restrictions on certain industrial chemicals and materials (for example, steel, glass, and fireworks).

Expanded due diligence obligations for exporters of battlefield goods

The EU previously introduced a requirement on exporters of common high priority list items to implement sanctions compliance measures to prevent (and ensure that their non-EU subsidiaries prevent) the re-exportation of such items to or for use in Russia and Belarus. The EU has now extended this requirement to cover certain electrical generating sets and electrical switches listed in a newly added Annex XLVIII to Regulation 833/2014. 

Restrictions on construction services

The package includes a new prohibition on providing construction services (including civil engineering works) to Russian legal entities. The EU has also replicated all existing restrictions on provision of business and professional services in the regulations concerning Russia-Controlled Territories.

Energy-related measures

The package introduces additional restrictions relating to Russia's energy sector. In particular, the EU has imposed restrictions on the supply of goods, technology, and services for the completion of crude oil projects (similar restrictions already exist in relation to liquefied natural gas projects). 

Moreover, EU persons are prohibited from providing certain software used in oil and gas exploration (including software used in drilling processes, geological inspections, and reservoir calculation) for use in Russia. 

Finally, the EU has prohibited the temporary storage or free-zone processing of Russian crude oil and petroleum products in EU ports, irrespective of the purchase price of the oil or its final destination.

Sanctions on Russia's "shadow fleet"

An additional 74 vessels have been listed (bringing the total to 153) aimed at curbing Russia’s use of "shadow fleet" tankers evading sanctions. The listed vessels are believed to be associated with Russa's largest shipping company Sovcomflot, including SKF Arctic, Yuzhny Flot and Invest Flot. The listed vessels are subject to restrictions on a broad range of services related to maritime transport.

Expansion of the transaction ban frameworks

For the first time, the EU has imposed transaction bans on two financial institutions in Belarus and one in China that use Russia’s domestic financial messaging system, SPFS. 

In addition, the EU has expanded the legislative framework in Regulation 833/2014 for imposing transaction bans. The EU has introduced a new transaction ban framework targeting listed Russian ports, locks and airports. Five ports and six airports have already been targeted. The EU has also expanded the transaction ban framework targeting listed non-EU credit or financial institutions and crypto-asset service providers facilitating transactions that support Russia’s defence-industrial base. The expanded framework authorises listing of financial institutions and crypto-asset service providers that participate in the circumvention of the oil price cap and deal with listed "shadow fleet" vessels. 

Transport restrictions

New measures prohibit any increase in the capital structure of an EU‑based road transport company, established before 8 April 2022, if the change would result in Russian or Belarusian ownership exceeding 25%. The EU has also expanded the existing framework for imposing flight bans to authorise targeting of non-EU carriers that conduct domestic flights within Russia or provide restricted aviation goods to Russian airlines. 

Measures against Russian media outlets 

The EU has suspended the broadcasting licenses of eight Russian media outlets. However, the outlets and their staff are not prevented from carrying out other activities in the EU besides broadcasting, such as research and interviews.

Enhanced enforcement related provisions

The package recognises the role of financial intelligence units (FIUs) in enforcing sanctions and improves exchange of information concerning suspected sanctions breaches between the FIUs, other competent authorities across Member States and the European Commission. In part, this is intended to avoid double reporting which may arise where an entity regulated for anti-money laundering (AML) purposes may be required to report a suspected sanctions breach to the FIU under the applicable AML laws and, separately, to its national sanctions authority under the applicable sanctions regulations. 

To allow for more effective cross-border enforcement of Russia sanctions and prevent their circumvention, the EU has also given the European Commission significant new powers to exchange information with the sanctions authorities in the US, UK and other partner countries. 

It will be interesting to see if the EU expands these information exchange powers to other, non-Russia related sanctions regimes.

How to prepare and what's next? 

The package comes amidst the US push for negotiations over Ukraine’s future. Nevertheless, the EU's High Representative for Foreign Affairs and Security Policy has indicated that the EU "remains ready to step up pressure on Russia, including by adopting further sanctions". 

In light of the far-reaching new measures, businesses should consider their exposure and take steps to mitigate the risk of violations. Our Sanctions and Export Control team stands ready to assist our clients with any upcoming matters related to these new EU sanctions.