The European Union’s 21st Sanctions Package Against Russia

With its 21st package of sanctions, the EU has once again tightened its sanctions against Russia, with a particular focus on the financial and energy sectors, export controls and the circumvention of existing sanctions. At the same time, the legal remedies available to European companies have been strengthened. We provide an overview of the key changes and explain what companies should now be aware of.

On 23 July 2026, the European Union adopted the 21st sanctions package in response to Russia’s war of aggression against Ukraine. The adopted package tightens sanctions, particularly in the areas of the financial, energy and cryptocurrencies sectors, as well as export controls and measures to combat circumvention. However, it also contains several adjustments and relaxations compared to the measures originally announced.

From the Commission’s proposal to adoption 

On 9 July 2026 the Commission had already announced a far-reaching set of measures. The adoption of the 21st sanctions package was therefore originally expected by 15 July 2026, which was the deadline for recalculating the price cap on Russian oil. However, due to significant differences among the EU Member States, Brussels granted itself an additional week for negotiations and postponed the adjustment of the oil price cap until 23 July 2026.

The wrangling over the new sanctions package was primarily shaped by national interests. Discussions focused particularly on measures in the LNG sector, comprehensive import bans on certain Russian fishery products, and stricter entry restrictions for Russian combatants, both former and current. However, in the adopted package, some of the measures fall significantly short of the proposals originally discussed: The planned comprehensive import bans on certain fishery products were not included, and the entry restrictions for (former) combatants were scaled back from an immediately applicable EU-wide ban to a mechanism that merely facilitates EU Member States in implementing such measures.

This shows that the EU is increasingly caught between the effectiveness of further sanctions and their simultaneous tangible impact on EU economic actors when enacting additional measures.

An Overview of the Key Measures in the 21st Sanctions Package

New Designations of Individuals and Organizations, as well as Additional Transaction Bans and Exemptions

The 21st sanctions package adds the largest number of individuals and organisations to the sanctions lists in the last four years. A total of 48 individuals and 170 organisations are affected, including 14 cryptocurrency platforms based in third countries.

Sanctions in the area of critical infrastructure have also been expanded. The EU has extended the transaction ban to two Russian ports and four Russian airports. Additionally, four narrowly defined exemptions to the asset freeze and the prohibition of providing funds and economic resources have been introduced in the areas of insurance services, put options, rail transport, and the Hungarian Paks II nuclear power project. This is to avoid adverse effects of the financial sanctions on the EU economic operators.

Significant Expansion to Financial Services and Cryptocurrencies

The Union has also significantly strengthened its sanctions against the Russian financial sector.

A total of 94 banks and major financial institutions are now subject to additional measures, and the transaction ban has been expanded to include an additional 33 Russian credit and financial institutions, as well as four non-Russian banks. The latter also includes exclusion from the SWIFT international payment system. 

The 21st package also targets numerous crypto exchanges and payment platforms outside Russia that are accused of facilitating Russian circumvention schemes. Among the newly listed entities are four parties with ties to the A7 network, a cross-border payment company with links to Russia, whose ruble-linked stablecoin A7A5 had already been banned in the 19th sanctions package. Furthermore, for the first time, the EU is establishing a general legal basis to prohibit future transactions with crypto service providers in third countries, provided that they facilitate the circumvention of European sanctions.

Companies that use digital assets or rely on payment service providers outside the EU, in particular, should expand their compliance processes accordingly.

Further Measures Against the Energy Sector and the So-Called Shadow Fleet

The EU had already addressed the transport of Russian oil via the so-called shadow fleet in previous sanctions packages. Under the 21st sanctions package, the adjustment of the oil price cap has been suspended until 15 July 2027, and the oil price is now fixed at $44.10 per barrel. This is intended, in particular, to ensure that profits from the sale of Russian oil remain limited, especially in connection with closures of the Strait of Hormuz. In addition, 41 more vessels have been added to the list of the shadow fleet. Furthermore, the EU is enhancing its Member States’ ability to act against vessels used to circumvent the oil price measures.

The 21st sanctions package provides for temporary exemptions from the ban on directly or indirectly purchasing, importing, or transferring Russian LNG. This allows companies to adjust their existing business relationships in an orderly manner and to phase out such activities gradually.  On the one hand, the exemptions apply to the supply of Russian LNG under CN code 2711 11 00 originating from the Sakhalin-2 project to Japan and the Republic of Korea until 31 March 2028. On the other hand, exemptions are provided, subject to certain conditions, for deliveries to third countries to fulfil contracts concluded before 24 February 2022. This exemption is valid for one year, subject to extension, and is accompanied by a review procedure designed to ensure that the 2025 transfer volumes of Russian LNG into and through EU Member States are not exceeded. 

Tighter Export Controls and Expanded Import Bans

Of the 56 newly listed organisations and individuals from the military-industrial complex, 37 listings are directly related to the manufacture and supply of long-range drones. Meanwhile, export restrictions on dual-use goods and technologies have been expanded. Some of the organisations affected by these measures are based in third countries, encompassing China (including the Hong Kong Special Administrative Region), India, Kazakhstan, Kyrgyzstan, Turkey, and the United Arab Emirates. They are suspected of assisting Russia in circumventing export restrictions, particularly with regard to microelectronics, numerically controlled machine tools, and semiconductor manufacturing. 

The new export bans also cover materials and technologies that are significant for the Russian defence and aerospace industries. These include, for example, aerospace goods designed specifically for unmanned aerial vehicles (UAVs), ground support equipment, jamming and interception systems, launch equipment, servo motors and drone and missile termination systems.

Additionally, the Union has imposed import bans on copper, nickel and lead ores, precious metal ores, raw zinc, alkaline earth metals, zinc and chromium oxides, glassware, imitation pearls and automotive parts.

Strengthening Legal Protection for EU Economic Operators

Another focus of the 21st sanctions package is to further strengthen the legal protection of EU economic operators, who are increasingly facing abusive lawsuits from both their Russian and non-Russian contractual partners. To this end, the EU is introducing three key innovations and expansions: 

• The range of potential defendants against whom EU companies and certain subsidiaries can file claims for damages in EU courts has been expanded to include cases where EU companies are sued in third countries other than Russia for claims that should never have been fulfilled in the first place due to EU sanctions. Under the 21st sanctions package, companies from non-Russian third countries that sell, supply, transfer or export prohibited goods, technologies, or services to Russian individuals, organisations, and entities can also now be held liable.

• The EU is also expanding the authority of EU courts to issue preliminary injunctions against certain non-EU organisations and individuals. These injunctions will prohibit them from initiating, continuing, or enforcing proceedings before Russian courts against EU companies in connection with their compliance with EU sanctions. The same applies to the recognition of such proceedings or the reliance on decisions issued by Russian courts in this context. The 21st sanctions package extends the existing provisions geographically, allowing for injunctions that prohibit enforcement in any jurisdiction and impose financial penalties in the event of non-compliance.

• EU Member States are now also required, within the framework of targeted sanctions involving the freezing of funds and economic resources, as well as investment restrictions on certain individuals or organisations, not to recognise nor to enforce decisions issued by Russian courts and authorities in connection with EU sanctions. 

Affected companies should therefore check whether any sanctions-related legal proceedings are already pending against them or their contractual partners and should actively incorporate the new options for bringing and defending against claims into their litigation strategy.

Immediate Consequences 

Following the adoption of the 21st sanctions package, China imposed its own countermeasures against several European companies in response to the further inclusion of China and Hong Kong-based companies: The Chinese Ministry of Commerce added 14 EU companies, particularly those in the defence and chemical sectors, to sanctions lists. This generally prohibits the export of dual-use goods from China to these companies. It, in turn, may also indirectly affect EU companies that do not themselves face sanctions, but which procure affected goods from the designated companies. 

This action highlights Beijing’s increasing willingness to respond to EU sanctions with trade restrictions of its own. For European companies, this increases the risks in cross-border supply chains, particularly when procuring Chinese dual-use goods.

Conclusion

With the 21st sanctions package, the European Union is continuing its course of steadily tightening sanctions against Russia. Although certain politically controversial measures were watered down or omitted from the draft of 9 July 2026, the final package is significantly stricter than many market participants had expected, particularly with regard to the financial sector.

Against the backdrop of the 21st sanctions package, economic operators should therefore note the following:

• Companies should review all business relationships against the updated sanctions lists, considering in particular the high number of new listings as well as the newly adopted export and import restrictions.

• Companies should also promptly incorporate the increased requirements for export controls, payment transactions, and supply chain compliance resulting from the new sanctions package into their existing processes. Given the increasing inclusion of third countries and financial intermediaries, a purely formal review of direct contractual partners is often no longer sufficient. Companies should therefore always base their sanctions compliance on a comprehensive, risk-based assessment of the business relationship, including payment channels and economic context.

• With regard to China’s countermeasures, EU companies should update their supply chain risk assessments in short term. This will enable them to identify the potential impacts of China’s countermeasures at an early stage and minimize the associated economic and legal risks.

• The relief measures in the LNG sector provide legal certainty and allow for the orderly closure of operations. Extending the transition period until the complete ban on the LNG businesses takes effect highlights the legal and economic challenges that economic operators face during the phase-out process. Despite the exemption, affected companies are urged to prepare for the phase-out process professionally and diligently.

• Furthermore, companies should actively explore and make use of the expanded legal remedies available: Those affected by abusive lawsuits filed by Russian or non-Russian contractual partners should consider the possibility of filing a claim for damages as well as seeking preliminary injunctions before EU courts. At the same time, they should prepare for the possibility that conflicting Russian judgments will no longer be recognised or enforced in the EU.

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