In significant parallel actions this week, the EU and US imposed new sanctions on Russia. While the EU’s 19th sanctions package is much broader in scope, the measures overlap in their focus on the Russian energy sector, with the US imposing full blocking sanctions on Russia’s two largest oil majors, OJSC Rosneft Oil Company (“Rosneft”) and Lukoil OAO (“Lukoil”) and the EU imposing a full ban on Russia-origin liquified natural gas (“LNG”), among other energy sector measures.
The measures represent a notable escalation given, in the case of the EU, that the 19th sanctions package following the 18th package in fairly quick succession, and in the case of the US, the absence of additional US sanctions targeting Russia since the new Trump Administraion took office in January. The EU and US measures also follow recent UK designations of Rosneft, Lukoil and various other parties connected to Russia’s energy sector.
We summarize these developments in more detail below.
EU’s 19th Sanctions Package
On 23 October 2025, the Council of the European Union adopted Decision (CFSP) 2025/2032 (“Decision”), comprising its 19th package of Russia sanctions. This package significantly expands the EU’s sanctions framework with the measures aiming to further constrain Russia’s military-industrial complex, financial infrastructure, energy exports, and third-country enablers of sanctions circumvention. Among the key sanctions adopted and changes made by the 19th package are the following:
- Energy Sector and LNG Prohibitions
The 19th package imposes a comprehensive prohibition (as of 25 April 2026 or, in certain cases of existing contracts, 1 January 2027) on the purchase, import, or transfer of LNG originating or exported from Russia. This also includes:
- A ban on technical and financial assistance related to Russian LNG; and
- A prohibition on transshipment of Russian LNG in EU ports.
- New Export and Import Controls
The 19th package expands the list of items subject to EU export controls as follows:
- Annex VII of Regulation (EU) 833/2014 now captures additional goods, including certain electronic components, rangefinders, propellant chemicals, military-grade metals, oxides, and alloys, among others; and
- Annex XXIII of Regulation (EU) 833/2014 now captures additional goods enhancing Russian industrial capacity, including, salts and ores, rubber articles, tubes and tyres, and millstones and construction materials.
- In addition, the Decision imposes EU import controls in respect of acyclic hydrocarbons products.
The Decision also adds 45 entities to Annex IV of Regulation (EU) 833/2014, subjecting them to enhanced export restrictions on: (i) dual-use goods and technologies; and (ii) items contributing to Russia’s defense and security sector (e.g., Computer Numerical Control (“CNC”) machine tools, CNC machine tools, microelectronics and advanced technology components).
- Services Restrictions
The Decision expands restrictions on services under Article 5n of Regulation (EU) 833.2014 to include:
- Commercial space-based services
- AI services
- High-performance and quantum computing services
Additionally, services directly related to tourism activities in Russia are prohibited. The 19th package also introduces a prior authorization requirement for any services provided to the Russian Government not already covered by Regulation (EU) 833/2014.
- Divestment
The Decision introduces technical amendments to Regulation (EU) No 833/2014, including the extension of the deadline to 31 December 2026 for derogations related to divestment from Russia. Such derogation requests are granted by EU Member States on a case-by-case basis to facilitate orderly market exit.
- Financial Messaging and Payment Systems
The Decision expands the financial messaging and payment systems ban in Article 5ac, as from 25 January 2026, involving systems provided by any Russian legal person that include a financial messaging functionality, SBP (Fast Payments System) and Mir (National Payment Card System).
- Shadow Fleet and Maritime Restrictions
The Decision designates additional vessels and amends the criteria for vessel designation. It prohibits:
- Insurance and reinsurance services for designated vessels; and
- Use of third-country ports and locks for transferring UAVs, missiles, or circumventing the oil price cap.
Designations are without prejudice to insurance payouts for claims arising prior to designation.
- Crypto-Asset and Payment Service Restrictions
The Decision imposes restrictions on:
- Provision of crypto-asset services to Russian nationals and entities.
- Issuance of electronic money to Russian persons.
- Provision of payment services under Directive (EU) 2015/2366, with certain exceptions for basic payment execution.
These restrictions apply to providers under the transitional regime of Regulation (EU) 2023/1114 and aim to prevent circumvention of asset freezes and transaction bans.
- Financial Institutions
The EU also imposed a transaction ban on eight financial institutions and oil trading entities based in Tajikistan, Kyrgyzstan, the United Arab Emirates, and Hong Kong, due to their involvement in activities that facilitate the circumvention of EU sanctions. Additionally, the transaction ban was expanded to cover five Russian banks, (Istina Bank, Zemsky Bank, Commercial Bank Absolut Bank, MTS Bank, and Alfa-Bank).
The Decision further extends the transaction ban to four financial institutions located in Belarus and Kazakhstan, based on their operational ties to Russian financial messaging and payment systems, SPFS, SBP, and Mir. These measures are intended to disrupt financial channels that support Russia’s sanctioned entities and to reinforce the EU’s commitment to closing avenues of indirect support for the Russian economy.
- Prohibitions Related to Russia Special Economic Zones
The Decision targets Russia’s special economic, innovation, and preferential zones, including Far Eastern and Arctic Zones and innovation clusters and industrial parks, prohibiting the following:
- New participation in the ownership or control, or joint ventures with, entities established in such zones;
- Creation of a new joint venture or representative offices in such zones;
- Entering into new contracts for the supply of goods or service or related IP rights for use in such zones;
- Maintenance of any of the foregoing as of 25 January 2026; and
- Financing of entities in such zones.
Certain exemptions are available.
- Aviation and Maritime Reinsurance
The Decision prohibits reinsurance for Russian-used aircraft or vessels for five years following any sale or lease arrangement entered into after entry into force of the Decision.
- Belarus
The EU also added five new listings targeting the Belarusian military-industrial complex and aligned Belarus trade restrictions with those on Russia. The EU also expanded bans on the provision of crypto payment services and the provision of specific software in financial, commercial, AI, and quantum computing fields.
US SDN Designations of Rosneft and Lukoil
On Wednesday, 22 October 2025, a day before the EU 19th sanctions package was adopted, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated Rosneft and Lukoil, Russia’s two largest oil majors, as well as several of their subsidiaries, to OFAC’s Specially Designated Nationals and Blocked Persons List.
The designations were made pursuant to Executive Order 14024. OFAC stated that the designations result from “Russia’s lack of serious commitment to a peace process to end the war in Ukraine,” and that the action was taken to “increase pressure on Russia’s energy sector and degrade the Kremlin’s ability to raise revenue for its war machine and support its weakened economy.”
OFAC simultaneously amended one general license and issued three new general licenses, including General License No. 126 which authorizes transactions that are ordinarily incident and necessary to the wind down of any transactions involving Lukoil and Rosneft and entities 50 percent or more owned by them until expiration of General License No. 126 at 12:01 a.m. eastern standard time, November 21, 2025.
Dealings with SDNs can also trigger secondary sanctions risks (which would include, in particular, the risk of designation as an SDN themselves) for providing “material support.” In addition, US and non-US parties are separately prohibited from exporting, reexporting, or transferring to Rosneft and Lukoil entities that are SDNs any goods, software, or technology subject to the Export Administration Regulations, unless authorized by an OFAC general license.
UK Designations of Rosneft, Lukoil and Other Companies
On 15 October 2025, the UK designated Rosneft and Lukoil, as well as Nayara Energy Limited (the Indian refinery in which Rosneft is a 49% shareholder), and various other companies. The UK Government’s press release for these measures is available here.
In parallel with these designations, the UK Office of Financial Sanctions Implementation (“OFSI”) issued two General Licences, as follows:
- General Licence INT/2025/7539056 authorises wind-down of transactions involving Rosneft and Lukoil, and entities owned or controlled by these entities. This licence currently expires at 23:59 on 28 November 2025.
- General Licence INT/2025/7538856 authorises wind-down of transactions involving certain energy entities, including Nayara Energy Limited. This licence currently expires at 23:59 on 13 November 2025.
OFSI also updated two existing General Licences to reflect the designations of Rosneft and Lukoil. Importantly, General Licence INT/2025/5635700 (Russian Oil Exempt Projects) was updated to list a number of energy projects that are exempted from the UK’s restrictions, subject to the terms of the licence.
On 22 October 2025, OFSI also issued General Licence INT/2025/7598960, which authorises continuation of business with Rosneft’s named German subsidiary entities (Rosneft Deutschland GmbH, RN Refining and Marketing GmbH, and entities owned or controlled by these entities), subject to the terms of the licence.
