The EU adopts the 16th package of sanctions against Russia: expands restrictions on Putin’s shadow fleet, stricter measures against sanctions circumvention, and new restrictions on Russian ports and airports
Today, on 24 February, the EU’s Foreign Affairs Council adopted the 16th package of economic and individual restrictive measures. The package aims to maximise economic pressure on Russia by imposing new export and import restrictions, stepping up anti-circumvention measures, and expanding restrictions on Russia’s shadow fleet. Thus, it will further dismantle Putin’s war machine and limit the regime’s revenues.
For the first time since the start of Russia’s war of aggression against Ukraine, the limited derogations and exemptions for certain dual-use and advanced tech exports to Russia have been further tightened, thus comprehensively limiting Russia’s access to goods and technology critically needed to strengthen the Russian army. In addition, the Council added 53 new entities to the list of those indirectly supporting Russia’s military-industrial complex. They will be subject to tighter export restrictions concerning dual-use goods and high technologies, which might contribute to the enhancement of Russia’s defence and security sector. It should be noted that, for the first time, more than half of these entities are located in China.
Additionally, today’s decision expands the list of restricted items that contribute to the technological enhancement of Russia’s defence and security sector by adding items for the development and production of Russia’s military systems. Lastly, the EU introduced further restrictions on exports of goods, which contribute to the enhancement of Russian industrial capabilities and their transit through Russia, as well as additional restrictions on the import of primary aluminium, which generates significant revenues for Russia.
Revenues from Russia’s seaborne oil product exports account for a significant part of the federal budget, fuelling its illegal war of aggression against Ukraine. As a result, Russia has relied increasingly on vessels involved in substandard and high-risk shipping practices, such as operating with inadequate or inexistent insurance (‘shadow fleet’).
On these grounds, 74 vessels were targeted, bringing the total of designated vessels to 153. In addition, the new package of sanctions also introduces, a ban on transactions with Russian ports and airports involved in circumventing the oil price cap or transferring drone and missile components.
The EU is prohibiting the provision of construction services, including civil engineering works, in order to prevent EU economic operators from contributing to the development of Russian infrastructure.
The EU is also imposing a transaction ban on three credit or financial institutions established outside Russia that use the ‘System for Transfer of Financial Messages’ (SPFS) of the Central Bank of Russia. SPFS is a specialised financial messaging service developed by the Central Bank of Russia to neutralise the effect of restrictive measures set out in Council Regulation (EU) No 833/2014 and Council Regulation (EU) No 269/2014, thereby enhancing Russia’s financial resilience.
Furthermore, the Council decided to extend the prohibition on the provision of specialised financial messaging services to 13 regional banks that were considered necessary for the Russian financial and banking systems. The ban also prevents 13 banks from making or receiving international payments using SWIFT. These entities are Russian credit institutions or Russian subsidiaries of third-country credit institutions that facilitate cross-border payments, thereby strengthening the Russian economy and its industry.
Today, the Council agreed to list 48 persons and 35 entities responsible for actions undermining or threatening Ukraine’s territorial integrity, sovereignty, and independence.
The 16th package also adds two new criteria for listing individuals and entities owning or operating Putin’s shadow fleet oil tankers, as well as those who support or benefit from Russia’s military and industrial complex.
The Council also introduced new restrictions in Crimea and Sevastopol and in the non-government-controlled areas of Ukraine in the oblasts of Donetsk, Kherson, Luhansk, and Zaporizhzhia, with the objective of inhibiting their integration into the Russian Federation and preventing circumvention of EU sanctions. To curb the risk of sanctions being bypassed, certain provisions of the 16th package are now also mirrored in the Belarus sanctions regime.
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