EU adopts 15th sanctions package against Russia and makes new designations relating to hybrid threats and other regimes

Alert

20 January 2025

10 min read

On 16 December 2024, the EU adopted its 15^th package of sanctions against Russia since its invasion of Ukraine in 2022. The package introduces targeted measures against vessels that have been used to circumvent sanctions, known as the "shadow fleet", and subjects more entities to tighter export controls, including several Chinese entities. It also provides for increased legal protection of EU Central Securities Depositories and extends certain existing divestment wind-down periods. The package adds 54 individuals and 30 entities to the EU's asset freeze list. On the same day, the EU adopted asset freeze measures under its sanctions regimes targeting Belarus, Haiti, Sudan and Russian so-called "hybrid threats".

Tackling the “Shadow Fleet”

The 15^th package tackles the circumvention of sanctions by the so-called "shadow fleet" of vessels engaged in illegal activities for the purposes of circumventing sanctions.¹

Fifty-two additional "shadow fleet" vessels, originating from third countries, were added to the Annex XLII list of vessels that are prohibited from accessing EU ports and locks and providing certain services related to maritime transport.² Grounds for including these vessels in Annex XLII include; being active in the transport of crude oil, petroleum products or in the transport of goods and technology used in the defense and security sector; supporting the Russian energy sector; or owned, chartered, or operated by persons or entities subject to an EU asset freeze; or a combination of these elements.³ There are now 79 vessels listed under this prohibition.

Derogations and wind-down periods extended

Derogations relating to import bans

The package includes a six-month extension, until 5 June 2025, to allow for the import and transfer into the Czech Republic, and to the sale to purchasers in the Czech Republic, of petroleum products obtained from Russian crude oil delivered by pipeline into another Member State, under certain conditions.⁴

The existing derogation for Croatian authorities to authorise the import, purchase, or transfer of vacuum gas oil falling under CN code 2710 19 71 originating in or exported from Russia if certain criteria are met has been extended by 12 months until 31 December 2025.⁵ For this derogation to apply, Croatia must notify the Commission of the grounds upon which it considers such an authorisation should be granted at least two weeks prior to the granting of the authorisation.⁶

Exemptions for Russian exits extended to 31 December 2025

Existing exemptions from the transaction ban in relation to listed State-owned entities (SOE) were extended by an additional 12 months until 31 December 2025 to allow companies to exit from Russia. This applies to:

The exception (no authorisation needed) for the wind-down of joint venture or similar legal arrangement concluded before 16 March 2022 with a legal person, entity or body established in Russia⁷; and
The derogation (requiring an authorisation) for transactions that are necessary for the divestment and withdrawal from Russia.⁸

Existing derogations from certain export and import bans where necessary for the divestment from Russia or for divestment from an EU joint venture pre-dating 24 February 2022, involving Russian entities, and operating a gas pipeline infrastructure between Russia and third countries were also extended by 12 months to 31 December 2025. This involves derogations from:

The sale, supply or transfer of certain restricted goods and technology (including dual-use goods (Article 2), goods and technology which might contribute to Russia's military enhancement (Article 2a), Annex II goods (Article 3), goods suited for oil refining and liquefaction of natural gas (Article 3b), aviation goods (Article 3c), maritime goods (Article 3f), luxury goods (Article 3h), and goods that contribute to Russian industrial capabilities (Article 3k);
The import or acquisition of iron and steel products (Article 3g) and goods which generate significant revenues for Russia (Article 3i);¹⁰ and
The provision of professional services under Article 5n.¹¹

This package also includes an extension until 31 December 2025 of the derogation for the satisfaction of certain claims brought by Russian persons, entities and bodies if satisfaction of that claim is strictly necessary for the divestment from Russia or the wind-down of business activities in Russia.¹²

Safe harbours for central securities depositories

Existing EU sanctions prohibit transactions related to the management of reserves as well as of assets of the Central Bank of Russia, including transactions with entities acting on its behalf, or at its direction, such as the Russian National Wealth Fund, established rules for the handling of immobilised assets and reserves of the Central Bank of Russia and imposed related reporting obligations.¹³

The 15^th package supplements these provisions with a ‘no liability' clause, which states that actions by central securities depositories (CSDs) carried out in good faith pursuant to those provisions shall not give rise to liability on the part of the depository, its directors, or employees unless the action was proven to be the result of negligence.¹⁴

Also concerning CSDs, the EU Asset Freeze regulation introduces a new derogation to allow national authorities to authorise the release of frozen cash balances held by EU CSDs and attributed to certain entities designated in Annex I of Regulation 269/2014 if the release of funds by the CSD is required to meet their legal obligations under certain circumstances.¹⁵ The Council press release explains that "this is necessary in light of increasing litigation and retaliatory measures in Russia that result in the seizing of assets of CSDs in the EU. Thanks to this derogation CSDs will be able to request competent authorities of the Member States to unfreeze cash balances and use them to meet their legal obligations with their clients".

Non-recognition of litigation with Russia counterparts

EU sanctions now provide that no injunction, order, relief, judgment or other court decision, pursuant to or derived from Article 248 of the Arbitration Procedure Code of the Russian Federation or equivalent legislation in Russia (the Russian "unfriendly states" law that grants exclusive jurisdiction to the Russian courts over disputes where proceedings relate to sanctions) recognised, given effect or enforced in a Member State. This provision also extends to requests for assistance during an investigation or other criminal proceeding under that law, and punishments or other sanctions pursuant to the Russian Criminal Code based on any such injunction, order, relief, judgment or court decision.¹⁶

Entities subject to tighter export restrictions

Thirty-two entities have been added to the list of entities that face tighter export restrictions relating to dual-use goods and technology and goods and technology which might contribute to the technological enhancement of Russia's defence and security sector. These entities are considered military end-users, forming part of Russia's military and industrial complex or having commercial or other links or which otherwise support Russia's defence and security sector. This list includes entities that are located in third countries including China, India, Iran and Serbia.¹⁷

New EU Asset Freeze designations

Another 30 entities are added to the EU asset freeze list, mainly operating in the aviation, military, defence and shipping sectors, six of which are located in China. Another 54 individuals, mainly active in the Russian energy and military sectors, were also designated. All funds and economic resources in the EU belonging to or controlled by these parties must be frozen. Furthermore, no funds or economic resources may be made available – directly or indirectly (e.g. through companies owned or controlled by them) – to or for their benefit, unless authorised or exempt. There are currently 2,200 individuals and entities on the EU's asset freeze list under the Russian regime in relation to Ukraine.

Noteworthy designations include:

LLC Gumich RTK;
LLC Prime Shipping;
State Corporation "Donbass Development Corporation";
Joint Stock Company Tula Machine Building Plant;
Asia Pacific Links Ltd;
ARCLM International Trading Co. Ltd; and
Shijiazhuang Hanqiang Technology Co.

As well as the new derogation for CSDs (mentioned above), the 15th package also extends the existing derogation for the release of frozen funds where that payment is necessary for the sale and transfer by 30 June 2025 (12-month extension) of proprietary rights directly or indirectly owned by Arkady Rotenberg, Gennady Timchenko, and Igor Rotenberg in EU; on condition that the proceeds of the sales and transfer are frozen.¹⁸

First designations under the “hybrid threats” regime

Beyond the EU sanctions regime against Russia in relation to its actions in Ukraine, in October 2024, the EU adopted a new regime targeting "hybrid threats" emanating from Russia that undermine the good functioning of government and public services in the EU and elsewhere. This is contained in Council Regulation (EU) 2024/2642 (the Hybrid Threats Regulation).¹⁹

Individuals or entities may be designated under the EU asset freeze under this regime if they are "responsible for implementing, supporting, or benefitting from actions or policies by the Russian government which undermine or threaten democracy, the rule of law, stability or security" of the EU, its Member States, international organisations or third countries as well as those associated with or supporting those engaged in those activities.²⁰ The activities concerned include the direct or indirect planning, directing, or engaging in:

obstructing or undermining of the democratic political process, such as undermining elections or attempting to destabilise the constitutional order);
targeting the functioning of democratic institutions, economic activities, or services of public interest, including through cyber, hybrid or infrastructure attacks;
violent demonstrations or acts of violence which may intimidate or coerce persons critical to the actions policies of Russia;
the use of coordinated information manipulation and interference;
the encouragement or facilitation of the movement of migrants to an external border of the EU in order to destabilise the EU or a Member State (‘instrumentalisation' of migrants); or
instigating, facilitating, or exploiting an armed conflict, instability, or insecurity (including through the illicit exploitation or trade of natural resources and wildlife) in a third country.

The Hybrid Threats Regulation contains grounds for authorisations that mirror those normally found in similar EU sanctions legislation, such as authorisations for basic needs, legal services or pursuant to arbitral/judicial decisions or prior contracts.²¹

On 16 December 2024, the EU listed its first designations under this new regime, adding 16 individuals and three entities to the list of asset freeze under this regime. The majority of those listed are Russian with others coming from Georgia, Moldova, Ivory Coast, and Togo.²²

Notable designations include:

GRU Unit 29155;
Groupe Panafricain pour le Commerce et l'Investissement;
African Initiative;
Anatolii Prizenko; and
Tinatin Givievna Kandelaki.

Additional asset freeze designations related to Belarus, Haiti and Sudan

The EU has also added designations pursuant to its sanctions regimes targeting Belarus, Haiti and Sudan.

The EU added 26 individuals and two entities to its asset freeze list targeting Belarus.²³ These new designations target members of the judiciary, prison officials, members of boards of directors close to the Belarusian regime and transportation entities, namely Vlate Logistik LLC and Ruzekspeditsiya LLC.

Three Haitian individuals were designated in view of the escalating gang violence and serious human rights abuses occurring in the country.²⁴ Four individuals were designated in Sudan pursuant to ongoing fighting between the Sudanese Armed Forces and the Rapid Support Forces, and related human rights abuses.²⁵

Ruth Benbow (Knowledge Manager, London) and Kate Malone (Legal Trainee, Brussels) contributed to the development of this publication.

_{1 As defined by the International Maritime Organization (IMO) in its non-binding resolution of 6 December 2023 –}_{see here}_{.
2 Pursuant to Article 3s of Regulation (EU) No 833/2014 as amended by Council Regulation (EU) 2024/3192 of 16 December 2024 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine ("Regulation 2024/3192") –}_{see here}_{.
3 Annex XLII of Regulation (EU) No 833/2014 as amended by Regulation (EU) 2024/3192.
4 Revised Article 3m(8) of Regulation 833/2014 as amended by Regulation 2024/3192.
5 Revised Article 3m(6) of Regulation 833/2014 as amended by Regulation 2024/3192.
6 Article 3m(6) of Regulation 833/2014 –}_{see here}_{.
7 Revised Article 5aa(3(d) of Regulation 833/2014 as amended by Regulation 2024/3192.
8 Revised Article 5aa(3a) of Regulation 833/2014 as amended by Regulation 2024/3192.
9 Revised Article 12b (1) and (1a) of Regulation 833/2014 as amended by Regulation 2024/3192.
10 Revised Article 12b (2) of Regulation 833/2014 as amended by Regulation 2024/3192.
11 Revised Article 12b (2a) of Regulation 833/2014 as amended by Regulation 2024/3192.
12 Revised Article 11(4) of Regulation 833/2014 as amended by Regulation 2024/3192.
13 Article 5a(4)-(12) of Regulation 833/2014.
14 New Article 5a(12a) of Regulation 833/2014 as amended by Regulation 2024/3192.
15 New Article 6b (5j) of Regulation 269/2014 as amended by Regulation 2024/3189.
16 New Article 11c of Regulation 833/2014 as amended by Regulation 2024/3192.
17 Revised Annex IV of Regulation 833/2014 as amended by Council Regulation 2024/3192.
18 Revised Article 6b (5f) of Regulation 269/2014 as amended by Regulation 2024/3189 -}_{see here}_{19 Article 2 of Regulation 2024/2642 –}_{see here}_{20 Article 2 of Regulation 2024/2642
21 Article 3 of the Regulation 2024/2642
22 Council Implementing Regulation (EU) 2024/3188 of 16 December 2024 –}_{see here}_{23 Council Implementing Regulation (EU) 2024/3177 of 16 December 2024 implementing Article 8a(1) of Regulation (EC) No 765/2006 –}_{see here}_{24 Council Implementing Regulation (EU) 2024/3138 of 16 December 2024 implementing Regulation (EU) 2022/2309 –}_{see here}_{25 Council Implementing Regulation (EU) 2024/3156 of 16 December 2024 implementing Regulation (EU) 2023/2147 –}_{see here}

_{White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.}

_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}