The EU's 19th Sanctions Package

1. Blocking sanctions

Council Regulation (EU) No 269/2014 clarifies the terms related to determining and identifying ownership and control over legal entities. Accordingly, “ownership” means possession of 50% or more of the proprietary rights of an entity or having a majority interest therein. In addition to formally codifying the definition, it also changes the “50% rule.” Previously, the EU’s rule applied to ownership of more than 50%, and now it is 50% or more.

42 legal entities and 21 individuals have been added to the sanctions list, including:

• Project A7A5, a stablecoin. This marks the first instance of a ban targeting not just a company or platform, but a specific digital asset
• Maxima Legal, a law firm. These are the first blocking sanctions imposed on a Russian law firm
• Litasco Middle East DMCC, a subsidiary of Lukoil in the UAE
• PJSC “Dalnyevostochnoye morskoye parakhodstva” (FESCO) – parent company of the FESCO group

117 sea vessels were also added to the list as part of the prohibition on insuring ships of the shadow fleet. Also for the first time, sanctions were imposed on the ship registries under the flags of Aruba, Curaçao, and Sint Maarten.

2. Sanctions on Special Economic Zones

Restrictions have been introduced on activities within Special Economic Zones (SEZs). A total of 11 SEZs, divided into two sections, have been added to the list:

Section А

• SEZ Alabuga
• SEZ Technopolis Moscow

Section B

• SEZ Lipetsk
• SEZ Togliatti
• SEZ Lyudinovo
• SEZ St. Petersburg
• SEZ Dubna
• SEZ Innopolis
• SEZ Ulyanovsk
• Skolkovo Innovation Center
• Free Port of Vladivostok

The EU’s 19^th sanctions package introduced amendments to Council Regulation (EU) No 833/2014 by supplementing it with Article 5ah. According to this article, the following is prohibited in relation to the SEZs listed above:

• acquiring any new or extend any existing participation in ownership or control of any legal person, entity or body in the SEZs
• creating any new joint venture, branch, or representative office in the SEZs
• entering into any new contract or arrangement for the supply of goods or services, or of related intellectual property rights or trade secrets to, from, or for use in the SEZs

Note that, based on the adopted wording, the regulation does not require foreign participants to take any action to divest from assets involving SEZs in Section B. Nevertheless, we do not rule out that the scope of restrictions on the listed SEZs could be expanded in subsequent amendments.

A more heavy-handed approach was taken in relation to the SEZs in Section A (SEZ Alabuga, SEZ Technopolis Moscow). Starting from 25 January 2026, the following additional restrictions will enter into force:

• it will be prohibited to maintain any existing participation in ownership or control of any legal person, entity or body in these SEZs
• it will be prohibited to maintain any existing joint venture, branch, or representative office in the SEZs
• it will be maintain any existing contract or arrangement for the supply of goods or services, or of related intellectual property rights or trade secrets to, from, or for use in the SEZs

Consequently, EU persons who are participants in (or stakeholders of) companies residing in the two specified SEZs will be required to terminate their involvement with such assets.

Please note that, from a Russian regulatory perspective, the countries of the EU are viewed as unfriendly jurisdictions. Complying with the requirements of the 19^th sanctions package will necessitate the performance of transactions on the sale of participatory interests in companies residing in the SEZs. Such transactions on the sale and purchase of shares fall under the restrictions established by presidential decrees (in particular, Decree No. 81 dated 1 March 2022, Decree No. 618 dated September 2022) and require the prior approval of the Subcommission of the Government Commission for Control over Foreign Investment (and for certain assets – the approval of the President of the RF). Obtaining such approval is contingent upon compliance with a host of formal and substantive requirements. Particular attention should be paid to the commercial issues surrounding finding a suitable buyer, conducting negotiations with them and structuring the asset exit transaction.

Furthermore, Russian regulations do not stipulate any maximum timeframes for the procedure for obtaining such approvals and can, in practice, take an average of 4 to 6 months, or even longer in some cases. This timeline is not fully aligned with the deadlines set by the European legislator for residents of the Section A SEZs. Securing timely approval for a transaction will require thorough preparation and precise navigation of the applicable rules and established practices for interacting with Russian regulators.

The new Article 5ah allows the competent EU authorities to issue permits for activities in the listed SEZs in a number of cases, including for the alienation of assets for the purposes of complying with the new requirements on exiting the SEZs or for winding down activities in Russia. We believe that for companies affected by the new requirements due to their participation in SEZ residents, obtaining such licenses – whether to maintain their current involvement or for actions related to market exit transactions – will become one of their most immediate priorities.

Additionally, these types of transactions often require the approval of the FAS of Russia in terms of economic concentration control. This process, however, is more clearly regulated, and the antimonopoly authority’s approval can be obtained within a maximum of 3 months.

3. Sectoral sanctions

A prohibition has been introduced regarding the provision of services to Russian persons in several sectors:

• services related to the development and functionality of artificial intelligence
• commercial aerospace services to Russian legal entities and authorities
• high-performance and quantum computing
• tourism

A requirement for prior authorization from the competent authority has been introduced for the provision of any services to the Russian government that are not already subject to the restrictive measures set out in Regulation 833/2014 (effective from 1 January 2026 for the performance of existing contracts).

Several types of goods banned from export to Russia, including several types of flowers and children’s toys, have been added.

4. Energy

The 19^th sanctions package introduces a ban on transactions with liquefied natural gas (LNG) if it originates or is exported from Russia:

• for short-term contracts, the ban will take effect after 6 months, from 25 April 2026
• for contracts longer than 1 year, concluded before 17 June 2025, the ban will take effect on 1 January 2027

The ban also covers the provision of technical assistance, brokerage, financial services and any other services related to the import of Russian LNG.

Also, there are new restrictions on transactions involving oil:

• previously existing exemptions for transactions with Rosneft and Gazprom Neft were cancelled
• blocking sanctions were also imposed upon several large Chinese oil refining companies: Liaoyang Petrochemical Company and Shandong Yulong Petrochemical

5. Finance

The EU previously issued a press release focusing on the financial sector and alternative means of payment. This makes the financial sector one of the most discussed parts of the 19^th sanctions package.

5 Russian banks were hit with sanctions restrictions:

• MTS-Bank
• Alfa-Bank
• Zemsky Bank
• Bank “Absolyut”
• NPO “Istina”

Sanctions were also imposed on eight foreign banks from Tajikistan, Kyrgyzstan, Belarus, and Kazakhstan for facilitating sanctions evasion using crypto-assets.

Payments through the Russian National Payment Card System (in Russian, “Mir”) and the Fast Payments System (“SBP”) were banned.

A ban was imposed on any transactions with crypto-assets listed in Regulation 833. Currently, the only sanctioned token is A7A5.

A ban was imposed on the direct or indirect provision of the following crypto-asset services to Russian individuals and legal entities:

• crypto-asset services
• payment instrument issuance, payment transaction acquiring, or payment initiation services
• electronic money issuance

From 25 January 2026, a ban on connecting to any system for transfer of financial messages (“SPFS”) of the Central Bank of the Russian Federation (“Central Bank of Russia”) or to other systems that include the function of transmitting financial messages will be introduced.