On 18 July 2025, the European Union adopted its 18th package of sanctions against Russia, including by amending Regulation (EU) 833/2014 and Regulation (EU) 269/2014. The EU also mirrored a number of measures and introduced additional designations in its Belarus sanctions by amending Regulation (EC) 265/2006.
Adopted just two months after the 17th package, this latest round of measures reflects the EU’s continued strategic shift toward more dynamic, extraterritorial, and asset-specific sanctions and reinforces the EU’s focus on enforcement, anti-circumvention, and hybrid threats. It introduces new tools aimed at disrupting Russia’s war economy and its global support networks. See our previous blog post on the EU’s issue of the 17th sanctions package in May 2025.
In summary, the main measures of the 18th package include:
- the lowering of the price cap for crude oil from USD 60 to USD 47.6 per barrel and introduction of an automatic and dynamic mechanism to modify the oil price cap,
- the listing of numerous additional individuals and entities including shadow fleet vessels, persons connected with Russian crude oil operations and other entities based in third countries (including China, Hong Kong, India, and the UAE) selling goods to Russia used on the battlefield,
- the introduction of an import ban on refined petroleum made from Russian crude oil and coming from any third country (subject to some limited exceptions) and additions to the ban on third country operators that circumvent oil-related prohibitions,
- a full transaction ban on Nord Stream 1 and 2, the Russian Direct Investment Fund, additional Russian banks and additional third countries’ financial and credit institutions and crypto-asset providers,
- a ban on the export, supply, or provision of banking and financial sector software to Russia (and associated services),
- enhanced export control restrictions on 26 new entities concerning dual-use goods and technology, 11 of which are based in third countries such as China, Hong Kong and Turkey,
- additions to the lists of items restricted for sale, export and supply to Russia (and ancillary services prohibitions) including certain chemicals (e.g., used for propellants), and computing machines,
- A ‘catch-all provision’ has also been introduced aiming at addressing the risk of circumvention via third countries of exports of advanced technology items. As a consequence, an authorization is required for exports of advanced technology items (Annex VII items) to any third country other than Russia, if the exporter has been informed by the competent authority of the Member State where the exporter is resident or established that the items in question are or may be intended, in their entirety or in part, for any natural or legal person, entity or body in Russia, or for use in Russia. This provision was also introduced with respect to Belarus.
- additional transit ban on the transit via Russia of certain economically critical goods used for construction and transport, and
- new measures targeting Belarus aiming at more closely mirroring Russia measures.
We provide additional detail on these measures below. Please get in touch with your usual Baker McKenzie international trade compliance contacts for support as needed.
1. Oil Price Cap and Nord Stream Transactions
The EU has revised the G7 oil price cap on Russian crude exports from $60 to $47.6 per barrel, applicable from 3 September 2025 and subject to review in 6 months time. This adjustment, aligned with current global oil prices, is part of a broader effort to tighten compliance and reduce circumvention. The cap now includes an automatic and dynamic adjustment mechanism to ensure continued effectiveness. The package also confirms a notable element that had been anticipated following the 17th package: a full transaction ban on Nord Stream 1 and 2. While no gas currently flows through these pipelines, the new ban preempts any future resumption of Russian energy exports via this route and blocks any maintenance or operational activity, or purchase of natural gas transported via either pipeline.
2. Targeted Sectors: Energy, Banking and Military Industry
The 18th package expands restrictions across several critical sectors, including banking, energy, and the military-industrial complex.
In the energy sector, 105 additional vessels linked to Russia’s shadow fleet are now banned from EU ports, and are subject to a ban on the receipt of maritime and other services, bringing the total to 444. The EU has also imposed an import ban on refined petroleum products made from Russian crude, even if processed in third countries—excluding Canada, Norway, Switzerland, the UK, and the US. This is subject to a 6 months transitional period with the prohibition to apply from 21 January 2026.
Refined petroleum products processed in other third countries will require evidence of the country of origin of the crude for import into the EU. Further guidance from the Commission is expected, in particular on evidence businesses importing these products will need to provide. The package notably leaves open the possibility of transaction bans on third-country entities found to have circumvented oil-related provisions.
For the first time, the EU has listed a shadow fleet captain and a private flag registry operator. A major Indian refinery with Rosneft as its key shareholder has also been sanctioned for its role as a major customer of the shadow fleet. The Council also ended the exemption allowing Russian oil imports to Czechia, closing one of the last remaining loopholes in the EU’s energy sanctions. The expanded shadow fleet sanctions now target vessels not only circumventing the oil price cap but also those transporting military equipment and looted Ukrainian grain—broadening the scope of maritime enforcement.
In the banking sector, 22 additional Russian banks are now subject to a full transaction ban including Bank Saint Petersburg, Yandex Bank, Metcom Bank and Bank Zenit (among others). This ban will apply from 9 August 2025. A new transaction ban also targets the Russian Direct Investment Fund and its affiliates, including sub-funds and companies receiving investment services, which applies from 20 July 2025. It is also noteworthy that the 23 banks currently subject to the restrictions on specialized messaging services are now similarly subject to a full transaction ban. The same applies for four Belarusian banks.
The EU has also lowered the threshold of imposing transactional bans on third country entities connected to Russia’s SPFS system (or equivalent systems)—its domestic alternative to SWIFT which is aimed at shielding sanctioned banks from international restrictions by removing to previous conditions for listing. Furthermore, the EU has designated two Chinese banks on account of facilitating sanctions circumvention by providing crypto assets services.
The package also introduces a ban on the export of software management systems used in the banking and financial sector, including online and mobile banking, loan management, ATM and point of sale integration, regulatory reporting and investment banking, further limiting Russia’s access to critical digital infrastructure.
In the military-industrial sector, the EU has listed three Chinese companies supplying battlefield-use goods to Russia, underscoring the EU’s willingness to target third-country enablers. Eight Belarusian military-industrial companies supporting Russia’s war effort have also been sanctioned. 26 new entities are also now subject to tighter export and associated services restrictions on dual-use goods and technologies, including 11 located in third countries (China, Hong Kong, and Türkiye). The EU has also imposed export bans worth over €2.5 billion on items such as hand tools, additive manufacturing machines, computer numerical control machines and chemicals used in propellants.
3. Transit Ban Expansion
The existing transit ban through Russian territory has been expanded to include economically critical goods used in construction and transport, such as certain hand and machine tools, additive manufacturing machines and milling machines, among others.
4. Sanctions on Belarus
The EU has mirrored several additional Russian sanctions measures into its sanctions on Belarus, including a full transaction ban on entities using SPFS and an embargo on arms imports.
The EU has imposed a further export ban on the export of Common Military List items to Belarus and the provision of associated services. The EU has also expanded the list of items restricted for transit via Belarus (to include, among others, additional machinery and trailers). The EU has also imposed additional export bans on certain chemicals (such as fluorine, chlorine sulphur bromine and iodine), oxides (such as iron oxides, cobalt oxides and titanium oxides), and additional iron and steel products, among others.
Finally, eight Belarusian entities supporting Russia’s military efforts have been added to the sanctions list.
5. Additional Designations
One individual involved in the military indoctrination of Ukrainian children has been designated as part of the 18th package, bringing the total to over 90 individuals sanctioned for such actions. Additional listings target Russian proxies in occupied Ukrainian territories, including those involved in cultural manipulation and propaganda dissemination. In parallel with the 18th package, the EU also listed multiple individuals and entities under other regimes in its Russia sanctions framework.
The EU designated 5 individuals in connection with human rights abuses and repression of civil society and democratic opposition in Russia, under the internal repression sanctions regime first introduced on 27 May 2024. The EC press release on this can be found here and our previous blog on the introduction of this regime can be found here.
The EU also designated 9 individuals and 6 entities in connection with activity threatening stability in Ukraine or a third country, or activity relating to information manipulation and interference impacting Union Member States, under the destabilising activities sanctions regime first introduced on 8 October 2024. The EC press release on this can be found here and our previous blog on the introduction of this regime can be found here.
6. Going Forward
The 18th package reflects the EU’s growing readiness to impose sanctions against parties in third countries (as well as Russia) seen to be supporting strategic aspects of the Russian economy
With over 2,500 individuals and entities now listed, the EU’s sanctions regime is becoming increasingly comprehensive and adaptive.
As enforcement becomes increasingly central for the EU, future packages are expected to focus even more on circumvention, maritime surveillance, and global coordination—particularly with G7 partners and allies in Asia and the Global South. The EU’s outreach to these regions reflects a growing recognition that sanctions enforcement must be global to be effective.
