On 23 July, the Council of the European Union adopted the 21st sanctions package against Russia. The restrictive measures primarily target the energy, financial services, crypto-assets and trade sectors, with a particular focus on Russia’s military-industrial complex. In addition, the package establishes the legal basis for an EU entry ban on Russian combatants and adds further natural persons to the sanctions regime for war crimes and the dissemination of propaganda.
Table of Contents
The 21st sanctions package was preceded on 15 June by a separate listing package, which supplemented the number of individuals and entities listed under the 20th sanctions package.
This article outlines the key elements of the 21st sanctions package, focusing on its implications for the financial sector.
FINANCIAL AND CRYPTO-ASSET SECTOR
Like its predecessor, the 21st sanctions package further expands and strengthens restrictive measures affecting the financial and crypto-asset sectors, particularly with regard to financial intermediaries in third countries.
The package introduces transaction bans against 33 additional Russian credit and financial institutions. It also extends the transaction ban to a Kyrgyz bank after links to Russia’s SPFS financial messaging system were identified.
Furthermore, three additional third-country banks have been listed for supporting Russian companies operating in sanctioned sectors or facilitating sanctions circumvention.
The package also imposes transaction bans on four further entities involved in the A7 network. A7 is a payment platform established in 2024 that enables sanctioned Russian entities to circumvent Western sanctions through cross-border payment processing.
In addition, transaction bans now apply to 14 further crypto-asset service platforms established in Georgia, Panama, the United Arab Emirates, the Marshall Islands, Kyrgyzstan and Belarus.
For the first time, the sanctions package also establishes the legal framework for a comprehensive prohibition on crypto-asset services provided by third-country operators to EU-based entities.
RUSSIAN SHADOW FLEET / ENERGY SECTOR
The package also strengthens measures against Russia’s shadow fleet. The number of sanctioned vessels increases to 673. For the first time, sanctions also cover vessels supporting the shadow fleet through related services, as well as ships transporting military equipment for Russia or stolen Ukrainian grain. In addition to restrictions on the sale of oil tankers, the package now also limits the sale of LNG tankers to Russia.
Further sanctions target critical Russian and Belarusian infrastructure, including ports, airports and refineries. Finally, the package extends the application of the oil price cap mechanism until mid-July 2027 in order to further limit Russia’s revenues from oil exports.
TRADE IN GOODS (IMPORTS / EXPORTS)
The package introduces additional export restrictions covering military-use goods, resources and technologies, ranging from certain metals and alloys to aviation-related goods, particularly those intended for unmanned aerial vehicles.
The Council has also agreed additional import restrictions on goods generating more than EUR 60 million in revenue for Russia. The import restrictions on fisheries products announced during the legislative process were ultimately not included in the adopted package. The package also mirrors Russia-related import and export restrictions in relation to Belarus.
Finally, additional entities operating in the gold, precious stones and mining sectors have been added to the sanctions lists.
RUSSIA’S MILITARY-INDUSTRIAL COMPLEX
A further 56 individuals and entities involved in Russia’s military industry have been added to the sanctions list. In addition, 51 Russian and non-Russian organisations have been designated and will be subject to stricter export restrictions concerning dual-use goods and technologies due to their previous involvement in sanctions circumvention.
FURTHER MEASURES
- Additional individuals and entities are listed for committing serious war crimes or disseminating Russian war propaganda.
- The package strengthens legal protection for EU economic operators against Russian court decisions and their enforcement where these relate to EU sanctions.
- It also establishes the legal basis for a comprehensive visa ban on current and former combatants involved in Russia’s military aggression against Ukraine.
Implications for the Financial Sector
The 21st sanctions package clearly demonstrates that the EU is increasingly extending its sanctions regime to third countries. In the area of financial services in particular, the new measures respond to evolving methods of sanctions circumvention. Sanctioned entities are increasingly relying on alternative payment systems to facilitate international transactions involving Russia, often using third-country companies as financial intermediaries. As a result, sanctions compliance can no longer rely solely on screening customers against sanctions lists.
Instead, financial institutions should place greater emphasis on:
- analysing payment and trade structures;
- assessing the purpose of transactions, particularly where military-use goods, high-tech products or other sanctioned goods are involved;
- ensuring that crypto-asset transactions and business relationships are not connected with Russian crypto-asset service providers or related settlement structures.
Financial institutions should consider the following:
- Can existing sanctions controls identify indirect risks and complex transaction chains?
- Are documentation, governance and escalation procedures suitable for intermediary and multi-layered payment structures?
- Are transactions routed through brokers, intermediaries or accounts located in third countries?
- How high is the sanctions-related risk associated with those jurisdictions?
- Are there direct or indirect links to Russian crypto-asset service providers?
- Are digital currencies (e.g. stablecoins) or crypto-based settlement structures with connections to Russia or the Russian rouble being used?
Conclusion and Outlook
The 21st sanctions package further broadens the EU’s sanctions framework by adopting a more comprehensive approach. Rather than focusing exclusively on listed persons and entities, the EU is increasingly targeting alternative payment channels, trade structures and third-country actors involved in sanctions circumvention.
Financial market participants should therefore continuously monitor evolving circumvention techniques and adapt their sanctions compliance frameworks accordingly.
