EU adopts 21st package of sanctions against Russia

On Thursday, the European Commission welcomes the adoption by EU Member States of the 21st package of sanctions against Russia. The package further restricts Russia’s ability to fund its illegal war and to carry out attacks on Ukrainian civilians and civilian infrastructure. Russia’s economy is slowing sharply, and EU sanctions have effectively cut Russia off from the global financial system. Russia’s budget is under growing pressure, with more than two-thirds of the liquid assets of its sovereign wealth fund depleted since the start of the war.

The measures focus on the sectors with the greatest impact: energy; financial services, including crypto; trade; and the Russian military-industrial complex. In addition, Member States reached an agreement that paves the way for a ban on the entry of Russian combatants into the European Union following the adoption of necessary implementing measures and a decision by the Council.

The 21st package contains the following key elements:

ENERGY MEASURES
Oil price cap adjustments: The EU has decided to suspend the adaptation of the price cap agreed in the 18th sanctions package for a full year until, July 2027. This will keep strong downward pressure on Russian crude exports to ensure that Russia does not benefit from the closure of the Strait of Hormuz. There remains the possibility to review the price cap earlier in case of exceptional market developments.

Infrastructure ban: The EU continues to target critical infrastructure that bolsters Russia’s military and economic war machine. First, a number of Russian ports and airports are designated under the transaction ban. In addition, the ban is expanded to cover refineries that process Russian oil, with one refinery, the Kulevi refinery, listed. This listing will enter into force with a six-month delay to give the refinery time to diversify away from Russian crude oil. Following an assessment by the Commission, the Council will then decide whether it is still necessary to list the refinery.

Resale of liquified natural gas (LNG) tankers: The package introduces a notification obligation for LNG tanker sales to third countries. Following a Commission assessment in three months, the Council must decide whether a full ban on tanker sales to Russia should be introduced.

LNG transfers to third countries and purchases linked to the transfers: a temporary exemption valid for one year, subject to renewal, is introduced to ensure legal certainty. The exemption is subject to strict reporting and volume requirements. LNG terminal services ban: The package clarifies that the LNG terminal services ban introduced in the 20th sanctions package covers not only Russian and EU operators but also non-Russian, third-country operators that are controlled by Russian companies.

Shadow fleet: 41 more vessels on top of the 632 already sanctioned that will be subject to a port access ban and a ban on receiving services. The criteria for vessels listings are expanded to target for the first time ships that provide services to these vessels. Five bunkering vessels that have regularly refuelled already-designated tankers are also designated.

Oil traders: the package broadens the list of oil traders subject to a transaction ban, given their role as intermediaries for Russian oil trade in frustration of EU sanctions.

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Source: European Commission