EU's 17th Sanctions Package against Russia - and the Implications for Businesses

One of the most notable measures in the 17th package is the systematic targeting of Russia’s so-called “shadow fleet” - a collection of primarily older oil tankers operating under opaque ownership structures and flags of convenience to evade oil export restrictions. The EU has added 189 such vessels to its sanctions list, bringing the total number of listed ships to 342. These vessels are now subject to a port-access ban and a prohibition on the provision of key services, including insurance, maintenance, and technical assistance, in EU jurisdictions. With these new sanctions, the EU aims to limit Russia’s ability to circumvent the G7/EU price cap on oil and to choke off a significant source of revenue feeding the war. Notably, this action - undertaken in tandem with similar efforts by partners like the US and UK - represents the largest single sanctions move by G7 states against maritime sanction evasion to date.

At the same time, the EU has expanded its sanctions to include major players in the Russian energy sector, including both Russian companies and foreign subsidiaries extending into thirdcountries, such as Eiger Shipping DMCC in Dubai. By targeting such entities - including a non-Russian subsidiary - the EU demonstrates a marked shift toward sanctioning third-country actors who directly or indirectly support Russia’s energy exports. This approach underlines that corporate structures or offshore hubs used to bypass restrictions will not shield companies from EU sanctions. In practical terms, these energy-related listings aim to cut off capital streams that fund Russia’s military operations by restricting the entities’ access to European markets, assets, and services.

The 17th sanctions package significantly broadens the list of individuals and organizations under EU restrictions. In total, approximately 75 additional designations have been made, including key figures and entities across several sectors.

These new listings are subject to asset freezes and prohibitions on making funds or economic resources available to them. A large portion of the additions focuses on Russia’s military and defense industrial base - for example, arms manufacturers and technology firms supporting the Russian army - as well as the network of suppliers that furnish critical components and know-how. Crucially, many of the newly listed companies are based outside Russia in third countries such as Turkey, Vietnam, the United Arab Emirates, Uzbekistan, and Israel. This reflects a growing recognition that sanctions circumvention often involves complex international supply chains and overseas intermediaries. The EU is thereby sending a clear signal that it will also target non-Russian entities that facilitate Russia’s war machine.

In the technological sphere, the package broadens sectoral bans and export controls to cut off Russia’s access to crucial dual-use goods and advanced technology. Dozens of additional items have been added to the export restriction lists. By expanding these controls, the EU aims to further hinder Russia’s access to critical components and technologies, including through third countries, necessary to maintain its military capacity.

In addition, the package’s individual listings also encompass those responsible for what the EU deems “hybrid threats” and human rights abuses. Among the newly sanctioned are individuals implicated in domestic repression (for example, judicial officials involved in the persecution of opposition figures, such as the late Alexei Navalny’s associates) and entities engaged in cyber warfare and disinformation campaigns against EU member states. Furthermore, the EU imposed sanctions on actors linked to destabilizing activities in occupied Ukrainian territories. This broad sweep of designations - ranging from military suppliers to cyber operatives and propaganda coordinators - illustrates the EU’s increasingly integrated approach to security, treating cyber and information warfare threats on par with conventional military targets.

A recurring theme in the 17th sanctions package is the fight against circumvention. The EU has substantially extended the reach of its sanctions regime to include actors in third countries suspected of helping Russia evade restrictions - whether by rerouting trade or supplying sanctioned goods indirectly. This implies that seemingly arm’s-length transactions, such as sales to intermediaries or distributors in third countries, can be sanctionable if the end benefit accrues to Russia.

Companies are therefore subject to a strict liability standard to ensure that funds or resources are not - either directly or indirectly - made available to sanctioned parties. This places significant demands on companies’ internal compliance programs, including ongoing risk assessments, enhanced due diligence, and systematic screening of customers, suppliers, and business partners, including those in jurisdictions not themselves under EU sanctions.

In this context, EU authorities have developed lists of particularly high-risk or sensitive goods and are urging increased vigilance to prevent their diversion via third countries. For example, the EU (together with G7 partners) has identified a “Common High Priority” list of sanctioned or dual-use items (such as certain electronics, machinery, and rare materials) for which companies should exercise extra due diligence to ensure these are not re-exported to Russia through intermediaries.

The 17th package also boosts the EU’s enforcement tools to tackle circumvention. A new EU regulation (Regulation (EU) 2025/964) was adopted alongside this sanctions package, introducing novel legal mechanisms to strengthen compliance. Notably, this framework is configured to allow the targeting of specific assets of entities involved in sanctions evasion, and it does not require that those entities be Russian. In other words, the EU has given itself the ability to list or penalize third-country individuals, companies, or even financial institutions that knowingly facilitate the circumvention of EU sanctions.

At the national level, Denmark is moving to significantly increase the penalties for sanctions violations and export-control breaches. A legislative proposal has been introduced to raise the maximum penalties under Danish law up to 5 years’ imprisonment for intentional violations (from the current 2-year maximum), and up to 8 years in particularly aggravating cases.

The proposal also explicitly addresses negligent non-compliance - making even serious negligent breaches punishable by up to 3 years in prison (where previously negligence might have led to lesser penalties). This underscores that even simple negligence can result in substantial criminal consequences, necessitating a proactive and systematic approach to sanctions management in all companies engaged in international activities.

The economic consequences for Russia are significant. According to the EU’s own assessments, the sanctions have led to a marked decline in Russian oil and gas revenues, rising inflation, and a growing budget deficit. At the same time, Russia has been forced to draw heavily on its national wealth fund to finance the budget shortfall.

Geopolitically, the sanctions continue to demonstrate the EU’s resolve to support Ukraine, but they also introduce complexities. The involvement of third countries - whether as sanction targets or as potential weak links - has added new dimensions to international diplomacy. The EU and G7 partners have largely maintained a united front, coordinating on measures to isolate Russia. However, there is some uncertainty about future transatlantic coordination. The U.S. has, for instance, considered trade measures (such as hefty tariffs on nations still buying Russian energy) alongside financial sanctions, whereas the EU’s approach remains centered on comprehensive economic sanctions and listings. These differing tactics, while sharing the same strategic goal, could create compliance challenges for companies navigating both U.S. and EU regimes.

Work on an 18th sanctions package is already underway, and further measures are expected, focusing on financial institutions, hybrid warfare, and potentially new sector-specific restrictions. Companies should therefore prepare for a continuously dynamic and complex sanctions landscape, where ongoing adaptation of compliance programs and risk management is crucial to avoid both economic and criminal sanctions. Engaging in regular sanctions audits and updating internal guidance to reflect the latest rules will be essential to mitigate the risk of inadvertent breaches.

The EU’s 17th sanctions package against Russia represents a significant tightening and expansion of the existing regime. For companies with international exposure, it is essential to understand these new measures and adjust accordingly. The inclusion of hundreds of additional vessels and numerous foreign-based entities on the sanctions lists means that exposure can arise in unexpected ways, as even indirect engagement in trade that benefits a sanctioned Russian entity may trigger violations.

Accordingly, companies must carefully consider this shift and continuously take appropriate steps to ensure compliance with EU sanctions. This includes checking vessel registries and ownership structures, enhancing supply chain transparency, and ensuring that any business involving dual-use goods or sensitive technologies is subject to thorough due diligence. The cost of non-compliance - including substantial fines, criminal penalties, and reputational harm - far outweighs the cost of precautionary compliance measures.

Moalem Weitemeyer continuously monitors developments in EU sanctions and is available to assist with the interpretation of, and compliance with, the EU sanctions regime.

If you have any questions or require further information regarding any of the above, please do not hesitate to contact us.