New Russian sanctions adopted as first EU Syrian sanctions restrictions lifted

The new measures outlined coincide with the EU’s decision to begin lifting some sanctions that have applied in relation to Syria, in light of recent regime change in the country.

Sanctions experts at Pinsent Masons said the announcements come at a time when the geopolitical environment is changing – something they said could affect the global sanctions landscape in 2025 considerably.

The new EU Russian sanctions package – the sixteenth of its kind since war in Ukraine broke out in February 2022 – targets “those who supported the operations of unsafe oil tanker … and those that are part of Russia's military and industrial complex or support it, or benefit from it”, the European Commission said. 48 individuals and 35 entities were added to the list of individuals and entities subject to an asset freeze, while businesses have also been barred from making funds and economic resources available to them.

In addition, 74 vessels said to form part of Russia’s “shadow fleet” or which otherwise “contribute to Russia's energy revenues” have also been targeted by restrictive measures, including being banned from accessing EU ports, accessing a range of maritime services, as well as financing, insurance and other assistance – like cargo loading and ship supply services – in EU territorial waters.

New sanctions targeted at Russian oil and gas production also form part of the new EU Russia package, with “the sale, supply, transfer, export or provision of software used in oil and gas exploration to Russia, including software used in drilling processes, geological inspections and reservoir calculation” now prohibited, the Commission said.

Further measures prohibiting EU imports of “primary aluminium” from Russia, supplementing the existing ban on importing processed aluminium from Russia, are among the other new sanctions listed. Airlines from countries outside of the EU that operate domestic flights in Russia or supply aviation goods to Russian airlines or for domestic flights in Russia, also face potential sanctions designations in future, while civil engineering provided by EU operators to Russian infrastructure projects has also now been banned.

Additional EU sanctions have also been announced targeting Belarus, which has supported Russia in the war, while the Commission also confirmed that other sanctions applicable to Crimea and Sevastopol and the non-government-controlled areas of Donetsk, Kherson, Luhansk and Zaporizhzhia regions have now been “strengthened” too.

Andreas Haak of Pinsent Masons said: “The simultaneous adoption of the new sanctions measures on both Russia and Belarus makes EU sanctions more effective by further aligning both regimes. The EU has timed its latest package of sanctions to the third anniversary of Russia’s invasion into Ukraine. Yet, the sanctions landscape is at a turning point.”

“For the last three years, the G7 shared a commitment to adopt, implement and enforce sanctions on Russia. In consequence of the US negotiations with Russia, this could change. Differences in foreign policy approach between the US and the other G7 partners will likely emerge which will lead to divergent sanctions regimes against Russia – increasing sanctions compliance complexity,” he said.

The UK’s latest Russian sanctions has been described by the UK government as its “largest sanctions package since the early days of the invasion” and, among other things, is designed to “target funds going into Putin’s war chest and propping up Russia’s kleptocratic system”.

Similar to the EU, the UK package targets 40 ‘shadow fleet’ ships carrying Russian oil, while “producers and suppliers of machine tools, electronics and dual-use goods for Russia’s military, including microprocessors used in weapons systems” – from countries such as Turkey, Thailand, India and China – will also be impacted by the measures. Senior North Korean officials are among the individuals targeted by the UK measures, after North Korea sent servicemen to fight with Russia in Ukraine.

Stacy Keen of Pinsent Masons said: “Of note, three years after the invasion of Ukraine there is a focus on targeting those outside of Russia that are suppling critical goods for Russia’s military and deploying forces in Russia. The recent UK sanctions package targets entities in Turkey, Thailand, India, China and the North Korea. This focus is not unexpected given that post February 2022 there has been rafts and rafts of sanctions packages targeting individuals and entities within Russia, arguably leaving a limited number to target that could influence the aggression in Ukraine.”

“That being said, those considered the ‘new kleptocrats’ in Russia – those considered to seek gain at the expense of those they govern – have been targeted in the recent sanctions package, indicating that Russian designations may continue,” she said.

While fresh measures responding to Russia’s war in Ukraine have been issued, the EU has begun easing restrictive measures targeting Syria – something which was trailed by EU foreign ministers last month.

Sector-wide measures that impacted Syria’s energy and transport sectors have been suspended, while financial restrictions on four Syrian banks and a Syrian airline have also been lifted. Further exemptions have also been introduced to enable certain transactions involving EU financial institutions and Syrian banks to go ahead, including those associated to the energy and transport sectors, those to support reconstruction in Syria, and those needed for humanitarian efforts.

Haak said: “The EU notes that there is a historic opportunity to rebuild Syria. Due to the strong trade relations between Syria and Germany that have grown over many decades before the rise of Assad’s regime, German business is quite favourably positioned to participate in Syria’s reconstruction efforts. It would, however, be a fallacy to believe that all exports and other legal transactions in or with Syria are now permitted. On the contrary: the EU has merely suspended a number of sectoral and individual measures, introduced certain exemptions, as well as removed the expiry date of the current humanitarian exemption from asset freeze measures. Likewise, recent US sanctions’ relief is limited in time and scope. This means sanctions compliance needs to be a top priority.”

“EU companies considering ventures in Syria need to carefully assess the scope of the latest relief of both EU and US sanctions. Moreover, the released sanctions may ‘snap back’, so companies should also take all necessary precautions to protect their business and investments. Appropriate contractual risk provisioning is essential, especially for a long-term planned commitment,” he said.