The European Commission has welcomed the Council’s approval of the 17th sanctions package against Russia. These new EU measures aim to increase the costs of Russia’s war and put additional pressure on its fragile economy, reinforcing the EU’s strong support for Ukraine.
The package further restricts Russia’s access to battlefield technologies and aims to cut revenue from energy imports by targeting numerous vessels associated with Russia’s shadow fleet.
It also expands the list of sanctioned individuals and entities and extends the exemption from the oil price cap for the Sakhalin-2 project to ensure Japan’s energy security.
The 17th package contains the following key elements:
ANTI-CIRCUMVENTION MEASURES
The European Union has added 189 vessels to its list of oil tankers contributing to Russia’s energy revenues, bringing the total to 342. Identified in cooperation with member states and the European Maritime Safety Agency (EMSA), these vessels are now banned from port access and service provision.
This 17th sanctions package is the most significant G7 action targeting shadow fleet vessels. EU listings, alongside the UK and US efforts, are reducing Russia’s ability to evade the oil price cap, making oil exporting more complex and costly for the Kremlin. Since the EU began listing these vessels, shipments of Russian crude oil have decreased by 76%.
Additionally, this package includes 31 new companies that provide direct or indirect support to Russia’s military-industrial complex or are involved in sanction circumvention, comprising 18 companies in Russia and 13 in third countries (6 from Turkey, three from Vietnam, one from Serbia, and one from Uzbekistan).
ADDITIONAL LISTINGS
The new package includes 75 new listings, comprising 17 individuals and 58 entities, all undermining Ukraine’s territorial integrity and sovereignty. These parties face asset freezes and economic restrictions, subjecting individuals to travel bans.
The listings primarily target the Russian military and defence sectors and utilise new criteria from the 16th package, including shadow fleet enablers. The package also highlights one key shipping company, Joint Stock Company Volga Shipping, which is essential for revenue generation.
TRADE MEASURES
Additionally, the package expands export restrictions on dual-use and advanced technology items to limit Russia’s access to critical military technologies. Chemical precursors like sodium chlorate, aluminium powder, and essential CNC machine tool parts are included. These restrictions and anti-circumvention measures like transit bans will hinder Russia’s ability to source these essential resources.
“SAKHALIN EXEMPTION”
The 17th package includes an extension of the exemption from the oil price cap. This allows for the transport of crude oil originating from the Sakhalin-2 Project in Russia by vessel to Japan, due to energy security concerns. This extension is granted for one year and will remain effective until 28 June 2026.
Impact of EU sanctions
EU sanctions are central to the EU’s response to Russia’s military aggression against Ukraine, aimed at undermining its capacity to finance the war. Economic data shows that the sanctions are effective; Russia now sells its resources at a discount while buying necessities at high premiums, damaging its economy.
“This round of sanctions on Russia is the most wide-sweeping since the start of the war, together with new hybrid, human rights, and chemical weapons-related sanctions. In this 17th package, we include Surgutneftegas – a Russian oil giant – as well as almost 200 vessels in Russia’s shadow fleet. While Putin feigns interest in peace, more sanctions are in the works. Russia’s actions and those who enable Russia face severe consequences. The longer Russia persists with its illegal and brutal war, the tougher our response will be,” explained Kaja Kallas, High Representative for Foreign Affairs and Security Policy/Vice-President of the European Commission.
The Russian economy is near full capacity and facing rising inflation above 10%, with projections of 9.3% in 2025—well above the government’s target of 4%. The government deficit is increasing, interest rates are at 21%, and significant funds have been drawn from the National Wealth Fund, which is now 65% lower than before the war.
Due to EU and G7 energy sanctions and the REPowerEU policy, Russia’s oil and gas revenues have plummeted from 100 billion euros in 2022 to 22 billion in 2024, a nearly 80% decline. Export restrictions have also limited its access to essential goods, leading to a 60% drop in trade revenue with the EU compared to pre-war levels.
The EU coordinates closely with G7 partners to enforce these sanctions, and the European Commission monitors compliance among member states. To address Russia’s attempts to evade sanctions, EU Sanctions Envoy David O’Sullivan is engaging with third countries to prevent circumvention. We’ve created a list of Common High Priority sanctioned goods that require special due diligence from businesses and a separate list of critical sanctioned goods for closer monitoring.
