16th EUROPEAN UNION-RUSSIA COMPREHENSIVE SANCTIONS PACKAGE

The European Commission presented its proposal for the 16th sanctions package (“Package”) in early February, and so far, there have been no significant objections from EU Member States. This suggests that the Package may be adopted before the third anniversary of Russia’s invasion of Ukraine on February 24, 2025.

In this context, a broad range of restrictions will be imposed on Russia, covering sectors such as trade, finance, energy including oil and coal, industry, technology, transportation, dual-use and luxury goods, as well as gold and diamonds. Regarding goods trade, the Package is expected to introduce additional measures on sales/export restrictions and purchase/import restrictions.

The categories for additional export restrictions are listed below, and export restrictions for certain newly added products will apply after a three-month transition period for existing contracts:
• Video game equipment
• Flight simulators
• Chromium and broader paper products
• Safety glass

New import restrictions will apply to aluminum alloys, with an exemption for the “necessary” 275,000 metric tons of imports, focused on unprocessed aluminum (CN code: 7601), and a one-year phased transition period will be allowed. Additionally, transit restrictions will be introduced for the following products:
• Certain flat-rolled products of alloy steel
• Specific machine tools
• Certain automotive parts and accessories

The Package will also include new restrictions on construction services, prohibiting EU operators from providing construction services to the Russian government and/or Russian legal entities. Furthermore, it will ban EU operators from selling, licensing, or transferring intellectual property rights or trade secrets related to banned software to the Russian government and/or Russian legal entities. The Package intends to prolong the transition period for diamond traders to adopt a compulsory blockchain tracking system for non-Russian origin diamonds, extending the deadline from March to September 2025.

NEW BULLETIN

Another new measure concerns dual-use or advanced technology products and technologies listed in Annex VII of Council Regulation (EU) 833/2014. This will introduce an independent ban on the sale or export of these products and technologies to individuals and entities listed in Annex IV of the same regulation, which are involved in supporting Russia’s defense operations. Up until now, the inclusion in this annex only limited the possibility of obtaining authorization from competent national authorities under exemptions to export restrictions, but this limitation will be expanded with the new Package.

To counter attempts to exceed the price cap imposed by the G7 on Russian oil, the Package is expected to add 73 oil tankers, known as Russia’s “shadow fleet,” to the list, prohibiting them from accessing EU ports. The Package will also impose new restrictions on the supply of software for oil and gas exploration and place limitations on the temporary storage or free zone operations for Russian-origin crude oil and petroleum products.

In the maritime sector, the Package will impose restrictions on all direct and indirect operations with specific listed ports. Although the final list of affected ports is still to be determined, it is anticipated that ports involved in facilitating or bypassing EU trade sanctions on Russia will be included.

However, it is not anticipated that the Package will impose a complete ban on Russian liquefied natural gas. Although the lists of restrictions have not been fully disclosed, it is expected that approximately 50 new entities and individuals, including several Russian regional banks, will be added to the EU sanctions list, which already includes over two thousand individuals and entities.

These are the expected and anticipated changes and restrictions, and the text has not yet been finalized. Negotiations concerning the Package are still ongoing.