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July 2026 was an extraordinarily active month in EU sanctions, capped by the long-awaited 21st Russia package. In short:

• Russia sanctions. The Council acted across six distinct sanctions regimes in a single month, including chemical weapons listings tied to Alexei Navalny’s death, a coordinated EU-UK cyber package (a first), new human rights listings on Russian surveillance and the torture of Ukrainian POWs, and the 21st package itself — the largest round of individual listings in four years.

• Other regimes. New Sudan gold-sector measures, six new Iran human rights listings, and a Global Human Rights Regime action against Southeast Asian scam-centre networks.

• EU Courts. Eight developments in a single month, including the CJEU extending the RT broadcasting ban to private individuals, the General Court’s first substantive interpretation of the anti-circumvention facilitation criterion, and three further rulings on the “leading businessperson” and “benefits from or supports” criteria.

• Export controls. The Commission published its updated compilation of national control lists (Dutch, Spanish and Finnish notifications, including on AI chips) and opened its formal evaluation of the Dual-Use Regulation.

• Looking ahead. The Informal meeting of Foreign Affairs Ministers (Gymnich), 1-2 September 2026; the Council has already added five more individuals to the military-industrial complex listings as this edition was published early August 2026.

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  Russia

  Chemical Weapons Regime

  On 3 July 2026, the Council imposed restrictive measures on six Russian individuals involved in the development of chemical weapons, notably epibatidine — a toxin found in samples taken from Alexei Navalny’s body after his death, leading to the conclusion that poisoning with epibatidine was highly likely the cause of his death, amending the EU’s chemical weapons framework (Council Decision (CFSP) 2026/1542 and Council Implementing Regulation (EU) 2026/1541).

  The individuals listed are scientists and researchers within the military sphere, some of whom worked for the Signal Scientific Centre, where they researched and published on the synthesis of epibatidine, including Igor Babkin, head of the Centre’s laboratory. Also listed are Irina Derevyagina, a chemical research analyst at Russia’s State Research Institute of Organic Chemistry and Technology, and Mikhail Gutsalyuk of the Military Academy of Radiological, Chemical and Biological Defence. The chemical weapons regime now applies to 31 individuals and six entities.

  Cyber, Human Rights and Detainees

  The Council adopted three distinct sets of measures on 13 July 2026.

  • First, under the Russia human rights regime, the Council listed four individuals and five entities responsible for abusive state surveillance, including VK Company (VKontakte) and its subsidiary Communication Platform LLC, developer of the FSB-supervised MaxApp pre-installed on Russian mobile devices, alongside Citadel, VAS Experts and Norsi-Trans, manufacturers of Russia’s SORM interception infrastructure (Council Decision (CFSP) 2026/1709 and Council Implementing Regulation (EU) 2026/1708, amending Decision (CFSP) 2024/1484 and Regulation (EU) 2024/1485).

  • Second, in what HR/VP Kallas described as the largest EU cyber sanctions package ever adopted — coordinated for the first time with simultaneous UK action — the Council listed nine individuals and four entities spanning bullet-proof hosting providers, hacktivist groups, and GRU-linked malware developers, including Media Land LLC and its owner Alexander Volosovik, the CARR (“Cyber Army of Russia Reborn”) leadership, and the developers of LummaC2 and Trickbot malware (Council Decision (CFSP) 2026/1713 and Council Implementing Regulation (EU) 2026/1714, under the cyber regime, together with Council Decision (CFSP) 2026/1707 and Council Implementing Regulation (EU) 2026/1710, under the Russia destabilising activities regime, listing GRU Unit 29155 deputy commander Ivan Kasyanenko). The same day, HR/VP Kallas issued a statement on behalf of the EU denouncing Russia’s malicious cyber ecosystem, exposing the FSB’s 16th Centre as controlling a range of cyber threat groups including TURLA, and confirming that France, Germany, Poland, Cyprus, the Netherlands, Austria, Slovakia, Romania and Finland had all been targeted.

  • Third, under both the Global Human Rights and Russia human rights regimes, the Council listed 15 individuals and one entity responsible for systematic torture and killing of Ukrainian prisoners of war and civilian detainees, including officers at the Olenivka prison camp (site of the July 2022 mass killing of POWs), Penal Colony No. 10 in Udarny, and the Taganrog pre-trial detention centre where journalist Viktoriia Roshchyna died in custody (Council Decision (CFSP) 2026/1723 and Council Implementing Regulation (EU) 2026/1720, together with the Russia human rights regime acts cited above).

  Military-Industrial Complex

  On 17 July 2026, following Russia’s deadly missile and drone strikes on Kyiv on the nights of 1 and 5 July, the Council listed one individual and five entities of the ABS Electro Group, which develops and manufactures electronic and radio-electronic components enhancing the resistance of Shahed and Geran drones to electronic warfare (Council Decision (CFSP) 2026/1780 and Council Implementing Regulation (EU) 2026/1779).

  21st Sanctions Package Adopted

  On 23 July 2026, the Council adopted the 21st package of restrictive measures against Russia, comprising 218 individual listings (48 individuals and 170 entities, including 94 banks and financial institutions) alongside a substantial set of new economic measures spanning energy, financial services, crypto, trade and dual-use export controls, with comparable measures extended to Belarus.

  Among new measures, the Council introduced the suspension of the automatic oil price cap adjustment mechanism until 15 July 2027; a new tool enabling transaction bans on named refineries processing Russian crude; expansion of the shadow fleet list to include, for the first time, vessels providing bunkering and support services; a new possibility to impose a full third-country ban on crypto-asset service providers; and the legal basis for a visa ban on combatants and ex-combatants of the Russian armed forces, whose entry into force the Council will decide separately (Council Decision (CFSP) 2026/1845, Council Implementing Regulation (EU) 2026/1843, Council Regulation (EU) 2026/1844, Council Decision (CFSP) 2026/1849 and Council Regulation (EU) 2026/1848, together with the parallel Belarus measures). A detailed summary of the 21st package is available here.

  Further Military-Industrial Complex Listings

  On 7 August 2026, the Council adopted restrictive measures against five additional individuals holding senior positions in Russian companies active in the defence and military technology sectors, following the European Council’s conclusions of 18-19 June 2026 calling for continued pressure on Russia and in response to intensified Russian strikes on civilian infrastructure. Those listed include Ramil Nailevich Badgutdinov, General Director of JSC Serpukhov Plant Metallist, a producer of precision electromechanical components including systems used in the Iskander-M ballistic missile, and Aleksandr Yurevich Dyukarev, General Director of JSC Krasnoyarsk Machine-Building Plant, involved in the production of ballistic missiles including the RS-28 “Sarmat” system, alongside directors of companies producing military communication systems and software for unmanned aerial vehicles and space-related military technologies (Council Decision (CFSP) 2026/1939 and Council Implementing Regulation (EU) 2026/1940).

  Sudan

  On 13 July 2026, the Council introduced sectoral trade measures into the EU’s autonomous Sudan sanctions regime for the first time — a ban on the purchase, import or transfer of Sudanese gold, and a ban on the export to Sudan of mercury and cyanide used in gold mining, both with targeted humanitarian exceptions (Council Decision (CFSP) 2026/1705 and Council Regulation (EU) 2026/1724, amending Decision (CFSP) 2023/2135 and Regulation (EU) 2023/2147).

  Iran

  On 24 July 2026, the Council listed six individuals under the Iran human rights regime, including five judges of Iranian Revolutionary Courts who imposed death sentences and long prison terms on dissidents — among them Nobel Peace Prize laureate Narges Mohammadi — in connection with the 2022 “Woman, Life, Freedom” protests, and Nima Salehi, founder of the Ashiyane Digital Security cyber group, which cooperates with the EU-listed Cyber Police (FATA) and IRGC in cracking down on domestic opponents (Council Implementing Decision (CFSP) 2026/1850 and Council Implementing Regulation (EU) 2026/1851). The regime now applies to 269 individuals and 53 entities.

  Global Human Rights Regime

  On 30 July 2026, the Council listed seven individuals and three entities responsible for human trafficking, torture and forced labour connected to cryptocurrency scam centres in Cambodia and Myanmar (Council Decision (CFSP) 2026/1896 and Council Implementing Regulation (EU) 2026/1895). The listings target the Prince Holding Group and its chairman Chen Zhi, the Jin Bei Group and its chairman Zhu Zhongbiao, and the Democratic Karen Benevolent Army, a Burmese armed group controlling territory around Myawaddy on the Myanmar-Thailand border where scam compounds operate under its protection.

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  Policy Developments

  Foreign Affairs Council, 13 July 2026

  At the FAC, HR/VP Kallas described the day’s cyber and human rights actions as reflecting an “unprecedented speed and scale” of Russia sanctions activity — the ninth consecutive FAC to impose new measures — while confirming that work on the 21st package continued in parallel, which was adopted later in the month. Ministers also discussed a Commission Options Paper on further EU action regarding the Strait of Hormuz, given the deteriorating state of the US-Iran memorandum of understanding, and a separate Commission paper on trade measures targeting goods from illegal Israeli settlements in the West Bank, which received majority support though the legal basis (qualified majority versus unanimity) remains disputed between the Council Legal Service and the Commission. Ministers approved a new EU Partnership Mission for Armenia to counter hybrid threats, and agreed a €120 million European Peace Facility package for Moldova.

  HR/VP Statement on Houthi Threats Against Saudi Arabia

  On 23 July 2026, HR/VP Kallas condemned Houthi threats to blockade Saudi Arabia and an attack on an oil tanker in the Red Sea as “unacceptable, illegal” and a “dangerous escalation,” calling for compliance with UNCLOS and reaffirming Operation ASPIDES’s mandate to protect freedom of navigation — explicitly linking the Red Sea and the Strait of Hormuz as a single navigational security challenge.

  Commission and HR/VP Propose New Sanctions Regime Against Organised Crime

  The Commission and HR/VP jointly proposed a new thematic EU sanctions framework targeting migrant smuggling, human trafficking, firearms trafficking, drug trafficking and money laundering, delivering on President von der Leyen’s 2025 State of the Union commitment. The proposal targets:

  • illicit activities originating outside the Union which, by reason of their widespread, systematic or organised nature, pose a serious threat to the Union’s values, to the security of the Union and its Member States, or to international security;

  • conduct related to migrant smuggling, trafficking in human beings, trafficking and other activities linked to illicit drugs, illicit manufacture and trafficking of firearms and money laundering;

  • identified individuals and entities involved in these activities, including those who lead, direct or support them by introducing and establishing a clear framework for restrictive measures.

  The proposal introduces the standard restrictive measures toolkit — asset freezes and travel bans, against identified individuals and entities, and requires unanimous Council approval.

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  EU Courts Developments

  July 2026 saw eight significant Courts developments, spanning the Court of Justice, the General Court and an Advocate General Opinion — including the General Court’s first substantive interpretation of the anti-circumvention facilitation criterion and a notable cluster of cases addressing the “leading businessperson” criterion (g).

  Donation-Funded Website Operators Fall Within the RT Broadcasting Prohibition — Case C-67/25, Traugott Ickeroth

  On 2 July 2026, in Case C-67/25, Traugott Ickeroth, the Court of Justice (Fourth Chamber) ruled that Article 2f(1) of Regulation (EU) No 833/2014 covers natural persons who broadcast RT content via a website financed solely by voluntary donations, finding, among other things, that neither the commercial nature of the activity nor its financing method is relevant to whether a person qualifies as an “operator.”

  Advocate General Proposes Dismissal of Khan’s Appeal on the “Influential Businessperson” Criterion — Opinion in Case C-530/25 P, Khan v Council

  On 2 July 2026, in Case C-530/25 P, Khan v Council, Advocate General Biondi proposed dismissing the appeal against the General Court’s judgment upholding Mr Khan’s listing under criterion (g). Building on the Court of Justice’s ruling in Pumpyanskiy, the Advocate General proposed that “influence” retains the same meaning under the amended criterion as under the original, rejecting the argument that the 2023 amendment required a link to the Russian government.

  General Court Dismisses Belarus Potash Transit Challenge — Case T-261/24, Birių Krovinių Terminalas v. Council

  On 15 July 2026, in Case T-261/24, Birių Krovinių Terminalas v Council, the General Court dismissed a Lithuanian terminal operator’s challenge to the EU’s prohibition on Belarusian potash transit, finding it lacked jurisdiction over the sectoral measure and that the challenge to the underlying Regulation was time-barred.

  General Court Delivers First Interpretation of the Anti-Circumvention Facilitation Criterion — Case T-492/24, Beloglazov v Council

  On 15 July 2026, in Case T-492/24, Beloglazov v Council, the General Court, sitting in an extended formation of five judges, dismissed a challenge to the listing of Mr Beloglazov under the criterion targeting persons who “facilitate breaches of the prohibition of circumvention.” The Court held the criterion is not excessively vague and produces no extraterritorial effect, since its consequences are confined to EU-located assets even where the facilitating conduct occurs abroad. On the merits, the Court found Mr Beloglazov had facilitated a scheme substituting himself for Oleg Deripaska as beneficial owner of frozen Strabag SE shares, and held that a later unwinding of the transaction did not retroactively cure the listing.

  General Court Upholds Relistings Under the “Leading Businessperson” Criterion — Case T-588/24, OT v Council

  On 15 July 2026, in Case T-588/24, OT v Council, the General Court dismissed a Russian-Cypriot businessman’s challenge to three successive relistings under criterion (g), holding that where an applicant alleges he has transferred shareholdings relied on by the Council, the burden shifts to him to prove the transfer was effective — a burden not discharged through unverifiable Luxembourg corporate registry extracts alone.

  CJEU Dismisses Three Appeals

  On 16 July 2026, in Cases C-39/25 P, Karić v Council and C-363/25 P, Dana Astra v Council, the Court of Justice dismissed companion appeals concerning the Belarus “benefits from or supports” criterion, both linked to the Minsk World development project. In Karić, the Court held the General Court had not unlawfully extended the criterion by finding “common economic interests” between the appellant and two Belarusian companies. In Dana Astra, the Court found an error in the General Court’s admissibility reasoning on notification but held it immaterial, since the merits had properly been examined regardless. In Case C-400/25 P, Timchenko v Council, the Court of Justice dismissed Gennady Timchenko’s appeal against his March and September 2023 relistings, upholding the General Court’s finding that his shareholding in Bank Rossiya satisfied criterion (d) and confirming that this alone was sufficient to sustain the listing — rendering his remaining grounds concerning criterion (g) and his EU citizenship-based free movement arguments ineffective.

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  Compliance Guidance

  On 6 July 2026, the Financial Intelligence Unit of Latvia published updated guidelines on assessing control exercised by designated public officials over non-listed legal persons, prompted by recent amendments to Regulation (EU) No 269/2014 introducing statutory definitions of “owning” and “controlling” a legal person.

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  Export Controls Developments

  National Dual-Use Control Lists Compilation Published

  On 3 July 2026, the Commission published the updated compilation of national control lists under Article 9(4) of the Dual-Use Regulation, comprising national lists notified pursuant to Article 9(2). The compilation includes substantial Dutch notifications covering advanced semiconductor manufacturing equipment, alongside Spanish additions on energetic materials, counter-drone systems and quantum computers, and a Finnish notification on advanced AI chips.

  Commission Launches Public Consultation on Overall Evaluation of the Dual-Use Regulation

  On 23 July 2026, the Commission opened its formal public consultation and call for evidence on the Article 26(4) evaluation of Regulation (EU) 2021/821, with a deadline of 15 October 2026. Three consultation streams are open — general public/civil society, a call for evidence, and a targeted survey for business and academia — with an Export Control Forum scheduled for 20 November 2026 in Brussels.

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  The Podcast

  Catch up with the latest episodes of the podcast (available on all platforms).

Looking Ahead

• Informal meeting of Foreign Affairs Ministers (Gymnich) — 1-2 September 2026

Welcome to This Month in EU Sanctions—briefings and podcasts at the intersection of EU law, foreign policy, and business. 🔔Subscribe to this newsletter be notified of new content.

The latest episode of the podcast takes a step back with two EU sanctions scholars — Celia Challet (Université Catholique de Lille) and Francesca Finelli (University of Luxembourg) — for a mid-year review of what’s been happening before the EU courts since January 2026.

Topics include:

• The Pumpyanskiy appeal and the Court of Justice’s ruling on criterion (g), the “leading businesspersons” listing criterion

• Why Russian oligarchs remain the core litigants — and the new categories of applicants now reaching Luxembourg: shadow fleet operators, third-country companies, the Russian Central Bank, and even Hungary and Slovakia

• The Global 8 Airlines case and the pending appeal that could reshape a key element of the EU’s sanctions architecture

• Euro Asia Cargo and what the ruling means for third-country operators’ compliance obligations and the anti-circumvention logic behind EU sanctions

• EM System and T Trust: how the Court has expanded the scope of asset freezes to reach 50%-owned companies and trust structures, and the cross-fertilisation between sanctions law and anti-money laundering law

• Traugott Ickeroth: the broadcasting ban, personal blogs, and why the Court broke from the Commission’s FAQ guidance

• Pending cases to watch: Reibel (arbitration and the no-claim clause) and Inter Rao Lietuva (Member States’ power to list additional targets)

This Month in EU Sanctions is available wherever you get your podcasts.

• 🎧YouTube

• 🎧 Spotify

• 🎧Apple

On 9 July 2026, the European Commission proposed a new horizontal EU sanctions regime targeting migrant smuggling, human trafficking, and other forms of serious organised crime, including firearms, drug trafficking, and money laundering.

It is the first time the EU has proposed a sanctions framework against those who profit from these forms of organised crime. The proposal is structured as a response not only to security threats but also to threats against the EU’s core values, alongside the undermining of the rule of law, democracy, and economic stability.

The proposal targets illicit activities originating outside the EU, and aims to disrupt the financial infrastructure and actors that keep criminal networks operating across borders, primarily through asset freezes and travel bans, rather than relying solely on law enforcement.

The EU has separately been considering a corruption-focused sanctions regime since 2023. The latest proposal now goes to the Council, where, as with any sanctions regime, adoption requires unanimity among member states.

With over 40 geographic and thematic sanctions regimes now in place, spanning Russia’s war in Ukraine, global human rights abuses, chemical and biological weapons proliferation, terrorism, cyber and hybrid threats, illicit finance, among others, and now serious organised crime, this latest proposal is another salient illustration of the diversity of goals pursued by EU sanctions.

This is a short update from This Month in EU Sanctions. If you haven't already, subscribe below to get the full monthly roundup of EU sanctions and export control developments. The newsletter is also available on LinkedIn.

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Welcome to This Month in EU Sanctions — briefings and podcast episodes at the crossroads of EU law, foreign policy, and corporate compliance. Stay ahead in a fast-evolving EU sanctions and export control landscape by subscribing to the newsletter and podcast. For June 2026, here are the main updates.

New EU Sanctions

“Mini” Russia Sanctions Package and Renewal

On 15 June 2026, delivering on prior announcements to move to a rolling sanctions approach operating in parallel to broader packages, the Council of the European Union (the “Council”) adopted a new round of sanctions against Russia spanning three legal regimes, namely, the main asset-freeze regime, the Russia destabilising-activities regime, the Russia human rights regime (Decision 2014/145/CFSP; Decision (CFSP) 2024/2643; Decision (CFSP) 2024/1484).

• The Council listed 34 individuals and 47 entities overall, including 7 individuals and 21 entities supporting Russia’s military-industrial complex (including third-country suppliers in China) and 2 individuals and 24 entities involved in shadow fleet shipping of Russian crude oil and petroleum products, including Lukoil-Western Siberia and companies in Russia, Liberia, Turkey, the UAE, Azerbaijan and Hong Kong. As part of the same action, the Council extended the Crimea and Sevastopol sanctions regime for a further year, until 23 June 2027.

• Separately, a nine-month derogation was introduced for dealings with Yangzhou Yangjie Electronic Technology Co., the Chinese semiconductor manufacturer listed under the 20th package. The derogation allows EU operators, principally European automakers reliant on Yangjie as a supplier, to transition to alternative sources; the company remains formally listed and full restrictions are expected to take effect 31 December 2026 for existing contracts and 15 March 2027 for critical component purchases.

• In light of the joint statement of 16 February 2026 by the UK, Sweden, France, Germany and the Netherlands on the poisoning of Alexei Navalny, the Council listed one entity and 15 individuals — including Russian judges, prosecutors, law enforcement, FSB and medical personnel — for their role in his persecution, poisoning and death.

On 25 June 2026, the Council renewed its sanctions regime against Russia for 12 months, until 31 July 2027, departing from the customary six-month renewal cycle (Decision 2014/512/CFSP). The decision follows the European Council’s conclusions of 18–19 June 2026, in which EU leaders agreed to the longer renewal period.

Iran - Strait of Hormuz

On 8 June 2026, the Council made its first individual designations under the framework extended on 22 May 2026 to target those threatening freedom of navigation in the Strait of Hormuz, listing two individuals and one entity.

The Council listed the Hormozgan Provincial Command of the Islamic Revolutionary Guard Corps Navy (IRGCN), which it states implemented a toll system requiring vessels transiting the Strait to provide documentation and pay fees for safe passage. Also listed are Mohammad Akbarzadeh, IRGCN Deputy Commander for Political Affairs, accused of publicly threatening missile and drone strikes against transiting vessels, and Hamid Hosseini, an Iranian oil and gas industry representative who promoted compliance with Iran’s transit toll procedures.

Moldova

As part of the 15 June package, the Council listed six individuals under the Moldova destabilisation regime, established in April 2023 in response to actions threatening Moldova’s sovereignty, democracy and stability (Decision (CFSP) 2023/891 and Regulation (EU) 2023/888). The regime now applies to 29 individuals and five entities.

Libya

On 12 June 2026, the Council amended its restrictive measures in view of the situation in Libya to implement UN Security Council Resolution 2819 (2026) of 14 April 2026 (Council Regulation (EU) 2026/1332, amending Regulation (EU) 2016/44). The amendments introduce no new designations but make significant changes to the management of the frozen reserves of the Libyan Investment Authority (LIA), of direct relevance to financial institutions acting as global custodians or sub-custodians of those assets.

The amended Regulation authorises, subject to UN Sanctions Committee approval, the use of LIA’s frozen cash reserves for investment in low-risk time deposits or fixed-income instruments depending on the applicable UNSCR recommendation, and introduces a new Article 11b permitting the transfer of LIA’s global custodian role between institutions within the same jurisdiction, provided the assets remain frozen and their value is preserved throughout the transfer.

Sudan

On 22 June 2026, following the UN Sanctions Committee’s designation on 28 April 2026 of a fourth individual under UNSC Resolution 1591 (2005), the Council added that individual to the UN-implementing Sudan regime and, correspondingly, removed the parallel entry for that same individual from the EU’s autonomous Sudan regime, to avoid duplicate listing across the two instruments (Council Implementing Regulation (EU) 2026/1393, implementing Article 15(1) of Regulation (EU) No 747/2014; and Council Implementing Regulation (EU) 2026/1394, implementing Regulation (EU) 2023/2147).

Haiti

On 26 June 2026, the Council renewed the EU’s autonomous framework for restrictive measures against those threatening the peace, stability and security of Haiti, or undermining democracy and the rule of law in the country, for one year, until 29 July 2027. The Council reiterated the EU’s status as a long-standing political and development partner of Haiti and its continued engagement alongside regional partners in addressing the country’s humanitarian crisis.

Policy Developments

Commission Proposes 21st Sanctions Package Against Russia

On 9 June 2026, Commission President von der Leyen presented the Commission’s proposals for a 21st package of sanctions against Russia, focused on energy, financial services and crypto, and trade, including fisheries for the first time.

The proposed measures include suspension of the oil price cap adjustment mechanism until January 2027 (citing market disruption from the Strait of Hormuz crisis); listing of 170 individuals and entities, including asset freezes on approximately 90 banks; designation of 30 additional shadow fleet vessels and, for the first time, vessels supporting the shadow fleet through bunkering services; new transaction bans on ports, airports and refineries handling Russian oil; a potential full ban on crypto-asset services from third countries; expanded export controls on aerospace, defence and drone-related technologies; new import bans on goods worth approximately €60 million; and a ban on EU entry for individuals who have served in the Russian armed forces since the war began.

European Council Conclusions, 18–19 June 2026

The European Council reaffirmed its continued support for Ukraine’s independence, sovereignty and territorial integrity, and its support for a comprehensive, just and lasting peace. On sanctions specifically, it agreed to extend the Russia economic sanctions regime for twelve months rather than the customary six, reiterated the importance of further reducing Russia’s energy revenues, curbing its shadow fleet, and constraining its banking system, and called for the swift adoption of the 21st sanctions package.

G7 Leaders’ Statement on Geopolitical Issues, 17 June 2026

At the G7 Summit in Évian-les-Bains, leaders issued a statement on geopolitical issues reaffirming unwavering support for Ukraine and committing to increase deliveries of air defence capabilities and long-range systems, with leaders ready to consider extending licences to boost Ukraine’s own military production capacity. Leaders separately committed to increasing pressure on the Russian war economy, including by strengthening sanctions on the oil and gas sectors, and welcomed the US-brokered deal reopening the Strait of Hormuz and the prospect of a follow-on diplomatic agreement covering the wider region, including Lebanon and Gaza.

Compliance Guidance

On 15 June 2026, the Commission published a new FAQ on the import ban on refined petroleum products obtained from Russian crude oil, addressing the prohibition on the purchase, import or transfer of such products, including where imported via third countries (Article 3ma). The latest version of the consolidated FAQ is dated 15 June 2026.

EU Courts Developments

June 2026 was an exceptional month for EU sanctions litigation, with three CJEU judgments four General Court judgments delivered the previous day, and an Advocate General Opinion.

CJEU Confirms Broad Interpretation of “Support” to the Russian Government — Case C-801/24 P, NSD v Council

On 11 June 2026, in Case C-801/24 P, NSD v Council, the Court of Justice (Fourth Chamber) dismissed the appeal brought by NKO AO National Settlement Depository (NSD), Russia’s central securities depository, against its listing under Article 2(1)(f) of Decision 2014/145/CFSP, which targets persons “supporting, materially or financially, ... the Government of the Russian Federation.” NSD argued the criterion should be read narrowly, covering only direct financing.

The Court held that “support” must be interpreted broadly, covering any support capable, by its quantitative or qualitative importance, of providing the Russian Government with material or financial resources or facilities allowing it to pursue its actions to destabilise Ukraine — without any need to show a direct link between that support and those actions. A narrower reading would create an artificial distinction between entities that finance the government and those that merely facilitate that financing.

CJEU Rules a Third-Country Sanctions Listing Alone Cannot Justify Refusal of a Basic Payment Account — Case C-81/24, Jenec

On 11 June 2026, in Case C-81/24, Jenec, the Court of Justice (Fourth Chamber) ruled on a Slovenian reference concerning a bank’s refusal to open a basic payment account for a consumer listed by the US Office of Foreign Assets Control (OFAC), despite his never having been convicted of any offence or sanctioned by the EU, UN or Slovenia. The Court held that Directive 2014/92/EU, read with the AML Directive (EU) 2015/849, does not permit Member States to require banks to refuse a basic account for the sole reason that the applicant appears on a third-country sanctions list.

Inclusion on such a list may be a relevant risk factor within the AML Directive’s risk-based approach but cannot trigger automatic refusal; the bank must conduct an individual risk assessment and, if warranted, apply enhanced due diligence rather than blanket refusal.

CJEU Confirms Limited Review and Rebuttable Presumption Under the Syria “Family Membership” Criterion — Case C-760/24 P, Sharif v Council

On 11 June 2026, in Case C-760/24 P, Sharif v Council, the Court of Justice (Sixth Chamber) dismissed the appeal of Ammar Sharif, brother-in-law of Rami Makhlouf, against his Syria-regime listing under the “family membership” criterion, which presumes association with the Syrian regime for members of the Assad or Makhlouf families. Mr Sharif argued the presumption was, in practice, irrebuttable.

The Court confirmed the presumption is rebuttable, through evidence calling into question the Council’s evidence or demonstrating the absence of a genuine risk of circumvention — without requiring proof that the family tie itself no longer exists — and confirmed that judicial review of such general listing criteria remains limited, given the Council’s broad discretion in defining them.

General Court Upholds Ignatova’s Successive Relistings, Clarifies “Immediate Family Member” Criterion — Case T-601/24, Ignatova v Council

On 10 June 2026, in Case T-601/24, Ignatova v Council, the General Court (Tenth Chamber) dismissed in full the action of Anastasia Ignatova, stepdaughter of Rostec CEO Sergei Chemezov, against three successive listings under the “immediate family member” criterion. The case turned principally on the 85-metre yacht Valerie. The Court found sufficient evidence linking the vessel to Mr Chemezov and held that it is enough if the benefit, or its proceeds, persisted at the time of listing, regardless of whether a later sale of the holding company was genuine.

On the central legal question, the Court held that “immediate family member” covers any person whose family ties are close enough that they could be used to disperse assets to evade sanctions, irrespective of whether the tie is by blood, adoption or marriage — rejecting reliance on unrelated EU instruments (the Citizens’ Rights Directive, Dublin Regulation, ECHR family-life case law) to import a narrower test.

General Court Upholds Elena Timchenko’s Listing, Clarifies the “Associated Person” Criterion — Case T-602/24, Elena Timchenko v Council

On 10 June 2026, in Case T-602/24, Elena Timchenko v Council, the General Court (Eighth Chamber) dismissed the action of Elena Timchenko, wife of Gennady Timchenko, listed as a person “associated” with her husband. The Court reaffirmed that “association” requires a link going beyond marriage itself, but does not require proof that any benefit derived was undue.

The Court found that Mrs Timchenko’s continued status as co-founder of the Timchenko Foundation — even after resigning from its board, and despite a charter amendment removing certain founder powers — still conferred residual rights and a continued public role going beyond ordinary marital activity, reinforced by evidence that Volga Group had previously supported the Foundation’s COVID-19 relief work.

General Court Dismisses Gennady Timchenko’s Challenge and Damages Claim — Case T-603/24, Timchenko v Council

On 10 June 2026, in Case T-603/24, Timchenko v Council, the same panel dismissed Gennady Timchenko’s challenge to his September 2024 and March 2025 relistings, together with a €1,000,000 damages claim. The Court confirmed, consistent with the Court of Justice’s prior ruling in his case (C-702/23 P), that his indirect 10.323% shareholding in Bank Rossiya — making him the bank’s second-largest shareholder — establishes financial support to Russian decision-makers.

The Court also found he benefits from those decision-makers, citing a 2017 law granting him personal tax exemptions and substantial Russian government support received by companies in which he holds large stakes. The damages claim failed for want of any established unlawfulness.

General Court Upholds Iran Air’s Listing Over UAV Transfers to Russia — Case T-676/24, Iran Air v Council

On 10 June 2026, in Case T-676/24, Iran Air v Council, the General Court (Eighth Chamber) dismissed Iran Air’s challenge to its listing for allegedly transferring Iranian-made drones to Russia. The Council’s evidence — 22 items spanning press reporting, think-tank analysis and an open-source flight-tracking investigation — was found reliable due to its geographic diversity and internal corroboration, with several sources independently identifying the same Iran Air Cargo flights between Tehran and Moscow via Armenian airspace in 2022.

The Court held this constituted a sufficiently specific, precise and consistent body of evidence, rejected arguments that the Council was required to detail individual flight cargo manifests, and confirmed that pre-listing notice is not required for asset-freeze measures given their need for a surprise effect.

Advocate General Proposes Tightened Standard for “Violent Demonstrations” Criterion in Moldova Regime — Opinion in Case C-179/25 P, Tauber v Council

On 4 June 2026, in Case C-179/25 P, Tauber v Council, Advocate General Spielmann proposed that the Court of Justice set aside the General Court’s judgment upholding the listing of Marina Tauber, former deputy leader of Moldova’s ȘOR party, under the Moldova regime’s “violent demonstrations” criterion. He found the General Court had erred by treating evidence of “violent intentions” as sufficient on its own, holding the criterion instead requires proof of an objective, material element — that demonstrations planned or directed were themselves violent.

EU Export Controls Developments

Commission Publishes Second Annual Dual-Use Export Control Report

On 25 June 2026, the Commission’s Directorate-General for Trade and Economic Security published its second annual report evaluating dual-use export patterns from EU member states, covering 2024 data.

EU member states authorised dual-use exports amounting to €77.6 billion in 2024 — 3% of total extra-EU goods exports, up from €71 billion in 2023 — with 487 transactions denied on security grounds. The top five destinations by value were China (25%), the United States (21%), the United Kingdom (7%), South Korea (7%) and Ukraine (3%).

The report highlighted a 41% rise in reported infringements (from 192 in 2023 to 270 in 2024) and a corresponding rise in penalties imposed (122 to 144), alongside data of direct relevance to the Human Rights Watch report covered in the May edition: 320 applications were received for cyber-surveillance item exports, with the denial rate falling year-on-year (20 denials in 2023 to 13 in 2024) even as application volumes held broadly steady. The Commission confirmed its mandatory Article 26(4) evaluation of the Dual-Use Regulation is under way, with a public consultation due in the first half of July 2026.

Other Economic Security Developments

Council Adopts Revised Foreign Investment Screening Regulation

On 8 June 2026, the Council formally adopted a revised Regulation on the screening of foreign direct investments, replacing the framework in force since October 2020. The regulation mandates screening mechanisms with a common minimum scope across all member states, extends coverage to investments made through EU subsidiaries, and introduces new tools to facilitate information exchange and prevent circumvention.

Of particular relevance to sanctions practitioners, the underlying cooperation mechanism requires host member states to share an FDI filing with other member states and the Commission within 15 calendar days where the foreign investor, or any related party, is subject to EU sanctions — creating a direct operational link between the sanctions and FDI screening regimes. The regulation enters into force 20 days after publication, with the new rules applying 18 months thereafter.

The Podcast

Catch up with the latest three episodes of the podcast (available on all platforms).

This Month in EU Sanctions welcomes Dawson Law, founder of Conseil Global Advisors and former Senior Sanctions Policy Advisor at OFAC and US Treasury Representative to the United Kingdom, for a wide-ranging conversation on US sanctions policy and its implications for the EU. Topics include:

• What the US-Iran MOU actually commits to, what it doesn’t, and what it means for business and compliance

• What US sanctions relief on Iran’s nuclear program would mean for the EU, given that the MOU leaves human rights, ballistic missiles, and Iran’s regional proxies — including support for Russia — entirely unaddressed

• The G7’s explicit linkage between Hormuz de-escalation and intensified Russia pressure — and whether US action will follow the rhetoric

• How US perceptions of the EU as a sanctions actor have evolved, and how the EU has become more disruptive through sophisticated network-based targeting

• Findings from a new report on the A7 network, a Russia-linked sanctions evasion network moving over $25 billion through SWIFT, including the use of AI-generated fake invoices

• Emerging EU-UK-US convergence on sanctions targeting migrant smuggling, and the secondary sanctions exposure created by US cartel designations in Mexico, Venezuela and Brazil

All of this as the EU extended the Russia sanctions for one year and the 21st package is on the horizon. Listen wherever you get your podcasts.

Welcome to This Month in EU Sanctions — briefings and podcast episodes at the crossroads of EU law, foreign policy, and corporate compliance. Stay ahead in a fast-evolving EU sanctions and export control landscape by subscribing to the newsletter and podcast.

New EU Sanctions

Russia - Deportation of Ukrainian Children

On 11 May 2026, on the occasion of the high-level meeting of the International Coalition for the Return of Ukrainian Children co-hosted by the EU, Ukraine and Canada, the Council of the European Union (the “Council”) imposed sanctions on 16 individuals and seven entities responsible for the systematic unlawful deportation, forced transfer, and forced assimilation, including indoctrination and militarised education, of Ukrainian minors, as well as their unlawful adoption and removal to Russia and within temporarily occupied territories (Council Decision (CFSP) 2026/1072 and Council Implementing Regulation (EU) 2026/1073).

Russia is estimated to have deported or forcibly transferred nearly 20,500 Ukrainian children since the start of its full-scale invasion. The Council described these actions as grave breaches of international law and a violation of the fundamental rights of the child, aimed at erasing Ukrainian identity and undermining the preservation of Ukraine’s future generations.

• Listed entities include federal state institutions linked to the Russian Ministry of Education: the All-Russian Children’s Centres Orlyonok, Scarlet Sails and Smena, which organise programmes for Ukrainian children in coordination with occupation authorities, exposing them to pro-Russian ideological education, patriotic events and military-oriented activities. Also listed are the DOSAAF Centre in Sevastopol, the Nakhimov Naval School and the Military-Patriotic Club “Patriot” in Crimea. All those listed are subject to an asset freeze; natural persons are additionally subject to a travel ban.

• The individual listing reasons in the legal act highlight three distinct categories of actor: operators of camps and youth facilities in occupied Ukrainian territory (including branches of the International Children’s Centre “Artek” and the state-backed “Warrior” paramilitary training centre in Kherson); regional Children’s Rights Commissioners and Ombudsmen within Russia proper who coordinate the reception, placement and “integration” of transferred children through guardianship bodies; and heads of military-patriotic clubs operating under programmes such as Yunarmia (the Russian Youth Army) in Crimea. The listing typology reflects the Council’s focus on the full chain of actors involved in the deportation and assimilation infrastructure, from frontline camp operators to the administrative reception network within Russia.

Russia - Human Rights Regime Extended

On 26 May 2026, the Council extended for a further year, until 28 May 2027, the framework for restrictive measures against those responsible for serious human rights violations and abuses, the repression of civil society and democratic opposition, and the undermining of democracy and the rule of law in Russia. The framework was first established in May 2024 in response to the accelerating and systematic repression in Russia, including following the death of Alexei Navalny (Council Decision (CFSP) 2024/1484).

The regime currently applies to 72 individuals and one entity. In addition to individual designations, this sanctions regime entails trade restrictions on the export to Russia of equipment that could be used for internal repression and on equipment, technology or software intended primarily for use in the monitoring or interception of internet and telephone communications.

Iran - Sanctions Framework Extended to Cover Strait of Hormuz Actions

On 22 May 2026, the Council extended the scope of the EU’s existing sanctions framework to target individuals and entities involved in Iran’s actions and policies that threaten freedom of navigation in the Middle East, including in the Strait of Hormuz. The framework was originally established to address Iran’s military support for Russia’s war of aggression against Ukraine and for armed groups in the Middle East and the Red Sea region, and delivers on the political agreement reached by EU foreign ministers at the Foreign Affairs Council on 21 April 2026 (amending Council Decision (CFSP) 2023/1532 of 20 July 2023).

The Council stated that Iran’s actions against vessels transiting through the Strait of Hormuz are contrary to international law, infringing upon established rights of both transit and innocent passage through international straits as reflected in the United Nations Convention on the Law of the Sea (UNCLOS). The amended framework enables the EU to impose travel bans and asset freezes on individuals and entities responsible for such actions. No individual designations were made at the time of the framework extension.

The decision was adopted in the context of the ongoing Strait of Hormuz crisis, which began on 28 February 2026. The European Council in its conclusions of 19 March 2026 called for the full implementation of UNSC Resolution 2817 (2026), condemning any acts that threaten navigation or prevent vessels from entering and exiting the strait. On 9 April 2026, following a ceasefire agreed between the United States and Iran, HR/VP Kallas issued a statement urging all parties to ensure freedom of navigation and safe passage through the Strait of Hormuz in line with international law.

Hamas and Palestinian Islamic Jihad — Politburo Expanded

On 28 May 2026, the Council expanded both the scope and the list of the existing sanctions regime against Hamas and the Palestinian Islamic Jihad (PIJ), formally adding members of Hamas’s Political Bureau (Politburo) as a designated category subject to restrictive measures — specifically those who promote, defend, or justify violent actions. The political agreement among EU foreign ministers had been reached on 11 May 2026 (Council Decision (CFSP) 2026/1173, Council Implementing Regulation (EU) 2026/1174, and Council Regulation (EU) 2026/1175, all amending Decision (CFSP) 2024/385 and Regulation (EU) 2024/386).

Ten Politburo members were listed: Nizar Mohammed Awadallah, Mohammad Nazzal, Husam Badran, Khaled Mashal, Khalil Al-Hayya, Muhammad Ismail Darwish, Zaher Jabarin, Abu Khalil Al-Quds, Fathi Hamad, and Moussa Abu Marzouk. According to the Council, in their capacity as decision-makers within the organisation, these individuals have knowledge of the planning, preparation and execution of violent actions by Hamas. The total number of listed individuals and entities under the regime now stands at 21 individuals and three entities.

West Bank — Sanctions on Extremist Israeli Settlers

On 28 May 2026, the Council imposed sanctions on four entities and three individuals responsible for serious and systematic human rights abuses against Palestinians in the West Bank, including violations of the right to physical and mental integrity, the right to property, the right to private and family life, freedom of religion or belief, and the right to education. The decision delivered on the political agreement reached at the Foreign Affairs Council on 11 May 2026 and was adopted under the EU’s Global Human Rights Sanctions Regime (Council Decision (CFSP) 2026/1176 amending Decision (CFSP) 2020/1999, and Council Implementing Regulation (EU) 2026/1177 implementing Regulation (EU) 2020/1998).

The four entities listed are: Regavim, Hashomer Yosh, the Nachala Settlement Movement, and the cooperative association Amana. The three individuals listed are:

• Meir Deutsch, director of Regavim, cited for the demolition of Palestinian property with the aim of expanding Israeli control over the whole of the West Bank.

• Daniella Weiss, director of the Nachala Settlement Movement, cited for planning, directing and publicly supporting coercive acts that lead to the forced displacement of Palestinians. Nachala’s outposts obstruct access to Palestinian agricultural and grazing land and have been persistent sources of settler violence, several having been built on privately owned Palestinian land.

• Avichai Suissa, former president of Hashomer Yosh, cited for facilitating and encouraging serious human rights abuses in the West Bank. The organisation offers material support, coordinates volunteers on herding farms, supports at least 28 violent outposts and settlements, and recruits armed volunteers and guards involved in violent attacks.

The measures had been subject to prolonged political deadlock, previously blocked by Hungary; their adoption on the same day as the Hamas Politburo listings reflects the political agreement reached at the Foreign Affairs Council on 11 May 2026, under which the two sets of measures were linked.

Syria - al-Assad Regime Sanctions Renewed; Seven Entities De-listed

On 18 May 2026, the Council renewed the EU’s restrictive measures targeting individuals and entities linked to the former al-Assad regime in Syria for a further year until 1 June 2027, following its annual review of the regime. Seven entities were simultaneously de-listed, including the Syrian Ministries of Defence and Interior, which now operate under transitional president Ahmed al-Sharaa (Council Decision (CFSP) 2026/1105 amending Decision 2013/255/CFSP, Council Implementing Decision (CFSP) 2026/1106, and Council Implementing Regulation (EU) 2026/1107 implementing Regulation (EU) No 36/2012).

The Council justified the renewal on the basis that networks linked to the former al-Assad regime continue to retain influence and pose a risk of undermining the transition process and hampering efforts towards national reconciliation and accountability, notwithstanding the fall of the regime in December 2024. The de-listings reflect the EU’s broader engagement with Syria’s new transitional authorities and are consistent with the EU’s progressive approach to Syria sanctions since the fall of the regime, which included the lifting of all economic sanctions in May 2025 and the restoration of the full EU–Syria Cooperation Agreement on 11 May 2026. Individual asset freezes and travel bans targeting Assad-era figures remain in place.

Cyber Sanctions Regime - Individual Listings Extended to May 2027

On 11 May 2026, the Council extended the individual listings under the EU’s horizontal cyber sanctions regime until 18 May 2027, updating the statements of reasons for four individuals and one entity to reflect the evolving nature of their activities. The legal framework itself had already been extended until 18 May 2028 in May 2025; the present decision concerns the renewal of individual listings only (Council Decision (CFSP) 2026/1079 amending Decision (CFSP) 2019/797).

The regime currently applies to 19 individuals and seven entities, all subject to an asset freeze and travel ban, with EU citizens and companies prohibited from making funds or economic resources available to those listed.

Policy Developments

HR/VP Statement on Airspace Violation and Sanctions

On 29 May 2026, HR/VP Kaja Kallas issued a statement on behalf of the EU strongly condemning the incident in which a Russian drone, carrying explosives as part of an overnight attack against Ukraine, crashed into a residential building in Galați, Romania, injuring two people. The EU described the incident as a “grave” and reckless act and held Russia fully responsible for the consequences of its escalatory behaviour and its military actions, which it stated threaten the security of EU citizens, regional stability and international peace.

The statement confirmed the EU’s commitment to the security of Romania and all member states and referenced the Eastern Flank Watch initiative and broader efforts to consolidate European Defence Readiness. From a sanctions perspective, the statement stressed that Russia’s continuing serious violation of European airspace “only reinforces our resolve to support Ukraine” and that the EU “will further raise the cost for Moscow and disrupt its war machine by ramping up sanctions.” The statement came on the same day as an informal meeting of EU foreign ministers in Cyprus at which ministers had agreed to step up pressure on Russia, increase support for Ukraine, and boost investment in European defence.

Select EU Courts Developments

CJEU Confirms Asset Freezes Can Extend to Trust-Held Assets

On 21 May 2026, the Court of Justice delivered three judgments — in Case C-483/23, T Trust; Case C-428/24, FZ AR; and Case C-476/24, SX — all concerning the interpretation of Article 2 of Council Regulation (EU) No 269/2014, and raising the question of whether the concepts of ‘belonging to’ and ‘control’ in the asset-freeze regime can extend to the settlor or beneficiaries of a trust, even where the trustee formally holds legal title and the trust documentation bars any transfer to sanctioned persons.

The three cases arose from the following facts.

• In T Trust (C-483/23), companies B, A, C and D are controlled by a Bermuda company held by a Bermuda-law trust with a Swiss trustee. The settlor was removed from the list of beneficiaries before being designated in 2022; the Italian authorities nonetheless froze the companies and their assets, finding them substantially attributable to the settlor.

• In FZ AR (C-428/24), an Italian company was held indirectly by a Bermuda trust whose original beneficial owner, ZU, had been replaced by his spouse TU, both of whom were designated in 2022; the Italian authorities froze the company on the basis that it remained attributable in practice to TU.

• In SX (C-476/24), the yacht ‘Sailing’, located in Italy, belongs to a company itself controlled by a trust of which TU is the sole beneficiary; the authorities froze the yacht on the same basis.

In its judgments, the Court found that Article 2 of Regulation 269/2014, across its various language versions, covers a range of legal relationships, from full legal ownership to situations of de facto power or influence. In order to ensure the effectiveness of EU law, the concepts of ‘belonging to’ and ‘control’ must be interpreted so as to encompass all forms of power or influence exercised over assets, including in the absence of any formal legal link between the assets and the sanctioned person. Assets may therefore be regarded as belonging to or controlled by the settlor or beneficiary of a trust where those persons have the power to use, benefit from or dispose of the assets, or to influence the decisions made by the trustee in relation to them.

The Court held that such power or influence may be inferred from factual circumstances, including the relationships between the settlor or beneficiary and others involved in the trust and the allocation of trust assets to activities primarily serving the sanctioned person, or from the presence of needlessly complex legal structures. Specific indicators include the sanctioned person holding a majority of the capital or voting rights in the trustee; entities being set up or changing identity shortly before sanctions come into force; and the relationships between the directors of frozen companies and the settlor or beneficiary. The interpretation is grounded in the purpose of asset freezes, namely to limit as far as possible transactions with the assets concerned, and in the broader objective of protecting Ukraine’s territorial integrity and preventing circumvention.

The judgment follows the Court’s March 2026 rulings in EM System (C-84/24), which confirmed that a 50% shareholding creates a rebuttable presumption of control, and SBK Art (C-465/24), which held that the freezing of funds prevents a listed person from exercising voting rights through depositary receipts. Together, these rulings reflect a consistently functional, reality-based approach to ownership and control, focused on the economic substance of a person’s relationship to assets rather than their formal legal title.

Compliance Guidance

Throughout May 2026, the European Commission (the “Commission”) published updated compliance guidance, including:

• on the asset freeze and prohibition to make funds and economic resources available under Council Regulation (EU) No 269/2014, incorporating references to the Court’s recent judgments in EM System (C-84/24) and SBK Art (C-465/24);

• concerning tanker sales (Article 3q) and targeted vessels (Article 3s). The updated guidance clarifies that “transfer of ownership” should be interpreted broadly, covering arrangements including sale, barter, inheritance, and corporate restructuring.

The latest version of the consolidated FAQs is dated 22 May 2026.

On 18 May 2026, the EU’s Anti-Money Laundering Authority (AMLA) published its 2025 Roadshow Report, based on engagement with supervisors, financial intelligence units, and private sector representatives across all 27 EU member states.

• The report identifies sanctions circumvention as a growing enforcement priority, with risks particularly pronounced in Baltic, Nordic, and Eastern European member states.

• It notes that evasion techniques are becoming increasingly sophisticated and are linked to cyber-enabled criminal activity, and identifies a compliance gap between large financial institutions and non-financial businesses, the latter generally having fewer resources and lower awareness of their sanctions obligations.

EU Sanctions Enforcement

Infringement Proceedings Against Spain, France and Austria Over Directive 2024/1226

On 19 May 2026, as part of the June 2026 infringements package, the European Commission decided to send reasoned opinions to Spain (INFR(2025)0217), France (INFR(2025)0221) and Austria (INFR(2025)0194) for failing to notify measures fully transposing Directive (EU) 2024/1226 on the definition of criminal offences and penalties for the violation of Union restrictive measures.

• The reasoned opinion is the second stage of the EU infringement procedure and represents an escalation from the letters of formal notice sent to 18 member states in July 2025. In September 2024, the Commission had already sent letters of formal notice to 26 member states for failing to fully transpose the Directive. Cyprus received a reasoned opinion in February 2025 for the complete absence of any transposition measures. Following examination of the transposition measures notified thereafter, three member states (Spain, France and Austria) have been found still to have failed to fully transpose the Directive and have now received reasoned opinions. If they do not take the necessary steps within two months, the Commission may refer the cases to the Court of Justice of the European Union.

Directive (EU) 2024/1226, adopted in April 2024 with a transposition deadline of 20 May 2025, establishes EU-wide minimum rules harmonising the definition of criminal offences and penalties for the violation and circumvention of EU restrictive measures. It covers asset freeze breaches, arms embargo violations, and circumvention schemes, and provides for penalties including prison sentences of up to five years for natural persons and fines of up to 5% of worldwide turnover or €40 million for legal persons. Serious negligence in relation to military or dual-use goods may also give rise to criminal liability.

Dutch FIOD Publishes 2025 Annual Report

In May 2026, the Dutch Fiscal Intelligence and Investigation Service (FIOD) published its 2025 Annual Report. The report notes that sanctions violations fall within the FIOD’s theme of “terrorist financing and sanctions,” which accounted for 5.4% of direct investigation hours in 2025. In total, the FIOD completed 424 investigations (956,525 hours), seized €152.5 million in assets, and achieved a 91% prosecution rate across all themes.

The central theme of the report is cooperation, including with Europol and Baltic counterparts, reflecting the FIOD’s increasingly international approach to sanctions enforcement. The report notes that the FIOD adjusted its organisational structure in 2025 to transition to national-level management, enabling faster knowledge-sharing and more targeted deployment of investigation capacity across themes.

BaFin Publishes 2025 Annual Report: Iran Sanctions Warning and Supervisory Priorities

On 12 May 2026, the German Federal Financial Supervisory Authority (BaFin) published its Annual Report 2025 at its annual press conference in Frankfurt, chaired by President Mark Branson. The report is of interest to the EU sanctions compliance community principally for two reasons.

First, in the context of Iran-related sanctions risks, BaFin expressly warned supervised entities of increased risks associated with structures designed to conceal beneficial ownership or disguise the actual country nexus of transactions, for example, by routing payments through intermediary jurisdictions. BaFin noted that institutions maintaining business relationships with high-risk jurisdictions are under especially close supervisory scrutiny following the reintroduction of Iran sanctions in September 2025.

Second, the report notes that while obliged entities in Germany are now comparatively well prepared for traditional anti-money laundering requirements, combating terrorist financing, which encompasses sanctions compliance, often still does not receive the same level of attention. This finding is consistent with the AMLA Roadshow Report published in the same month and reflects a broader pan-European compliance gap identified by supervisors across multiple jurisdictions.

BaFin announced 151 supervisory measures on its website during 2025. Financial sanctions enforcement at the asset-freeze level remains primarily the responsibility of the Deutsche Bundesbank’s Financial Sanctions Service Centre, export-related sanctions of BAFA, and asset investigation of the Central Office for Sanctions Enforcement (Zentralstelle für Sanktionsdurchsetzung, ZfS).

FIU Latvia 2025 Annual Report: Shadow Fleet Identification and Rising Sanctions Reports

On 5 June 2026, the Financial Intelligence Unit of Latvia (FIU Latvia) published its 2025 Annual Report, the first full-year report since the FIU Latvia assumed the function of competent authority for sanctions implementation in Latvia. The report is of particular relevance to the EU sanctions enforcement landscape for two reasons.

First, on shadow fleet identification: the FIU Latvia states that nearly 10% of the vessels added to the EU sanctions list in 2025 were identified by FIU Latvia, underscoring the significant contribution of Baltic financial intelligence capacity to the EU’s efforts to disrupt Russia’s shadow fleet operations. By the end of 2025, the FIU Latvia sanctions database contained information on 156 sanctioned persons and entities with frozen assets in Latvia, including funds amounting to €153 million.

Second, on sanctions reporting: the number of reports concerning potential sanctions violations received by the FIU Latvia increased by approximately 80% in 2025 compared to the previous year. This significant increase is consistent with the broader pattern of rising tip volumes observed across EU enforcement authorities, including the ZfS in Germany. Sanctions violations were identified as one of the primary themes of the FIU Latvia’s financial intelligence activities in 2025, alongside fraud, cybercrime, and tax evasion.

EU Export Controls Developments

Human Rights Watch Report Calls for Stronger Implementation of the Dual-Use Regulation

On 12 May 2026, Human Rights Watch published a 54-page report titled “Looking the Other Way: EU Failure to Prevent Surveillance Exports to Rights Violators” assessing how Regulation (EU) 2021/821 (the 2021 Recast Dual-Use Regulation) is functioning in practice. The report concludes that the regulation’s objective of preventing the export of commercial surveillance technology to destinations where it is likely to be used to violate international humanitarian or human rights law is not being achieved, owing to inconsistent implementation across member states.

The report is relevant to the mandatory evaluation of Regulation (EU) 2021/821 under Article 36, which the Commission is required to carry out between 10 September 2026 and 10 September 2028. In its response appended to the report, the Commission’s Directorate-General for Trade and Economic Security confirmed that it intends to begin the evaluation process as early as May 2026. The evaluation will cover, among other things, the implementation of the cyber-surveillance catch-all controls introduced by the 2021 recast and the consistency of member state licensing decisions.

The Podcast

Catch up with the latest three episodes of the podcast (available wherever you get your podcasts).

Looking Ahead

The following meetings in June 2026 are likely to produce developments relevant to EU sanctions:

• Foreign Affairs Council, 15 June 2026 (Luxembourg). The next FAC will address Russia’s war of aggression against Ukraine, including an exchange with Ukrainian Foreign Minister Andrii Sybiha, the situation in the Middle East in light of the latest developments of the war in Iran and its effects across the region (including Lebanon, Gaza and the West Bank), and the state of play of EU–China relations. Further sanctions decisions or political guidance on upcoming packages may follow.

• G7 Summit, 15–17 June 2026 (Évian-les-Bains, France). France hosts the 52nd G7 Summit in Évian-les-Bains. Coordinated action on Russia sanctions, including price cap enforcement, shadow fleet measures, and anti-circumvention, has been a standing item at recent G7 summits.

• European Council, 18–19 June 2026. Heads of state or government will meet in Brussels. Based on recent European Council practice, conclusions on Russia’s war against Ukraine, including guidance on sanctions policy and the upcoming renewal of the economic sanctions regime ahead of the 31 July 2026 deadline, are expected.

Following the recent adoption of the EU’s 20th Russia sanctions package — and what may prove to be a broader turning point in EU sanctions policy — the latest episode of This Month in EU Sanctions welcomes Maria Demertzis, Professor of Economic Policy at the Florence School of Transnational Governance.

The discussion explores the evolving role of EU sanctions, the economics of coercion, and why the future of EU economic statecraft may depend as much on reducing vulnerabilities, finding leverage, and speaking with one voice as on the sanctions themselves.

Available wherever you get your podcasts.

The 20th package of European Union (“EU”) sanctions against Russia, adopted by the Council of the European Union (the “Council”) on 23 April 2026, marks a turning point in the EU’s sanctions response to Russia’s invasion of Ukraine, with significant implications for EU sanctions law, compliance, and policy.

Comprising a bundle of measures across seven legal acts, the 20th package is one of the most structurally integrated rounds of EU sanctions to date. It extends restrictions (some of them to Belarus as well) across energy, finance, trade, and circumvention networks in a more systemic manner than previous packages, reflecting a continued shift away from isolated listings toward a framework that targets interconnected supply chains, facilitation networks, and enforcement gaps. This evolution serves as a reminder that traditional list-based compliance models and standard due diligence approaches are becoming less sufficient in this regulatory environment.

The 20th package can be analysed through three central questions. First, to what extent does the 20th package confirm a shift toward a network-oriented sanctions architecture aimed at structural disruption? Second, how does this approach reshape risk allocation and due diligence expectations for EU and non-EU operators? Third, does the package signal greater coherence and strategic autonomy in EU sanctions policy despite the constraints under the Common Foreign and Security Policy (“CFSP”)?

As this article argues, the 20th package reflects a broader evolution in EU sanctions practice away from primarily actor-based designation toward measures targeting structural dependencies. It combines sectoral prohibitions, network-oriented restrictions, and selective incentives for behavioural change. Whether this momentum can be sustained will depend on a range of internal and external political and enforcement factors.

Political Resilience: Overcoming Unanimity Challenges

Nearly six months had passed since the adoption of the 19th package. Blocked for months by Hungary’s veto and, to a lesser extent, Slovakia’s objections, the extended delay in adopting the 20th package, initially presented in February 2026, revives a familiar critique of the EU CFSP architecture: that the unanimity requirement in the Council makes the EU structurally vulnerable to obstruction by individual member states.

Hungary’s use of its veto as a negotiating tool over EU funding and assistance to Ukraine, its relationship with Moscow, and Viktor Orbán’s increasingly isolated position within the EU have imposed real opportunity costs since 2022. With the outcome of the April 2026 elections, however, Hungary’s capacity to sustain a unilateral block on EU sanctions appears materially diminished. The delay ultimately revealed less about structural incapacity within the CFSP framework than about the extent to which a single member state could temporarily weaponise unanimity.

The speed with which the 20th package moved from deadlock to adoption once that shift occurred is instructive. The implications for the 21st package, which is reportedly already in preparation, are significant. The EU may enter a phase of accelerated Russia sanctions development. Political deadlock, rather than substantive design, appears to have been the principal limiting factor, absent new obstacles emerging from other member states.

Energy Sanctions

System-level disruption is most visible in energy sanctions. These measures reflect a broader tendency in EU energy sanctions design to extend targeting beyond discrete flows toward upstream and downstream actors, as well as intermediaries connecting them, a trend that became more apparent from the 17th and 18th packages onwards.

Expanding the Net: Shadow Fleet, Ports, and Facilitators

The 20th package—among the most comprehensive to date—targets evasion infrastructure rather than discrete flows. Russia’s shadow fleet has been the principal instrument for evading energy sanctions. A total of 632 vessels are now listed, with 46 new additions spanning tankers linked to Russian military logistics, stolen Ukrainian grain transport, and shadow fleet management and insurance operations.

The listing of the Karimun Oil Terminal in Indonesia is the first time the EU has imposed a transaction ban on a third-country port, alongside the listings of Murmansk and Tuapse. It also serves as a warning to port operators and commodity traders: facilitators of Russian oil evasion now face significant exposure to EU sanctions risk. For instance, a Russian insurance company has been designated as a shadow fleet insurer. The listing criteria have also been expanded. It now captures persons providing material, technical, or financial support to vessels transporting mineral products, in addition to crude oil and petroleum products, through high-risk shipping practices. At the same time, a new derogation allows competent authorities to authorise services to listed vessels destined for recycling.

LNG, Price Caps, and Tanker Sales

On LNG, a prohibition effective 1 January 2027 covers EU operators providing terminal services to Russian entities or EU entities more than 50 percent Russian-controlled. All pre-existing contracts must be wound down by that date. The oil price cap mechanism has also been restructured so that a full ban on maritime services would enter into force automatically if the price cap is discontinued. Tanker sales to third countries are now subject to mandatory risk assessments, a contractual “no Russia” resale clause with cascading obligations on subsequent buyers, and immediate notification requirements to competent authorities.

From Drones to Propaganda: Individual Accountability

Individual accountability complements this approach through functional targeting based on roles in relevant sectors or networks. The package adds 37 individuals and 80 entities to the Russia asset freeze and travel ban list, plus three entities under the Belarus regime, bringing the total to 120 new designations spanning a wide range of Russian and non-Russian actors, marking, according to the Council, the largest round of listings in two years.

The designations cover a broad range of profiles. In the military-industrial sphere, they include the director of a special economic zone that serves as Russia’s primary production site for Shahed and Geran-2 attack drones built with Iranian technical assistance; the head and deputy head of the Russian troops responsible for systematic chemical weapons use in Ukraine; and senior figures in the defence electronics, missile design, and unmanned systems sectors. Among the more legally significant listings is the head of a Russian pharmaceutical company that benefited directly from the Kremlin’s expropriation of a major European pharmaceutical group’s Russian subsidiary, one of the first designations explicitly targeting a beneficiary of Russia’s temporary management regime.

On circumvention, the designations include individuals and entities involved in routing EU-produced dual-use chemicals to Russia’s semiconductor industry through Central Asian intermediaries, operators of machine tool circumvention networks, and suppliers of military drone components through front company structures, alongside businesspersons deriving substantial revenues from sectors financing the Russian state.

On the propaganda side, senior editorial leadership at Russia’s principal state-controlled international broadcasters has been sanctioned. Cultural figures involved in the archaeological exploitation of occupied Ukrainian territory have also been listed.

Disrupting Financial Networks

Banking Restrictions: 70 Russian Banks and Beyond

In financial sanctions, the package targets critical segments of transaction systems, disrupting alternative settlement, banking, and crypto channels. Twenty Russian banks have been added to a transaction ban, bringing the total to 70 banks excluded from the EU financial system, effective 14 May 2026. Financial institutions based in Azerbaijan, the Kyrgyz Republic (“Kyrgyzstan”), and Laos have additionally been added to the relevant transaction ban annexes. The package also introduces transaction bans on non-financial intermediaries facilitating sanctioned transactions through netting, set-off, or settlement via accounts held outside Russia under a new annex.

Crypto Crackdown: From Entity to Sectoral Bans

On cryptocurrency, rather than continuing to designate individual platforms, a strategy the Council found had been repeatedly circumvented through successor entities, a new article introduces a blanket sectoral prohibition on all transactions with crypto-asset service providers or exchange platforms established in Russia, effective 24 May 2026. The prohibition extends to the digital rouble and the RUBx stablecoin. Together with the earlier ban on A7A5, the EU has now targeted several key crypto-based circumvention channels within a single framework. This shift from entity-level designation to sector-level prohibition reflects an evolution in sanctions design methodology.

Expanding Trade Restrictions

Export Bans

The package adds an estimated €360 million worth of goods to the EU export ban list, including rubber products, steel fasteners, industrial tractors over 130 kilowatts, detonating equipment, organo-inorganic compounds, and laboratory glassware, alongside new controls on energetic materials such as amatol and nitroglycol, as well as high-performance lubricants. A wind-down period applies until 25 July 2026 for contracts concluded before 24 April 2026. The prohibition on professional services has also been extended to managed security services, effective 25 May 2026.

Sixty new entities are subject to enhanced export restrictions, including 28 based outside Russia across the People’s Republic of China (“China”), Hong Kong, the United Arab Emirates (“UAE”), Kazakhstan, Uzbekistan, and Kyrgyzstan. Among the designated entities are a Chinese semiconductor manufacturer whose products have reportedly been identified in Russian drones and ammunition; a UAE-based aviation parts supplier that channelled Czech military-grade aircraft instrumentation to a Russian military repair facility via Russia’s state arms export agency; and a Central Asian trading company that routed EU-produced hydrogen chloride, a critical semiconductor precursor to Russian chip manufacturers.

The listings reflect the EU’s increasingly granular mapping of Russia’s global procurement networks. They are operationalised through asset freezes, transaction bans, and entity-specific export restrictions, underscoring the increasingly transnational character of EU sanctions enforcement.

Import Bans

On the import side, an estimated €570 million worth of Russian goods has been added to the prohibition list, covering metals and metal scrap, ammonia subject to an annual quota of 688,000 metric tonnes, sulphates, epoxides, nitrile compounds, tanned furskins, and platinum. As of 24 April 2026, importers of polished diamonds must provide a due diligence statement confirming that the diamonds are not of Russian origin.

The Logic of Reversibility: Incentives for Third Countries and Private Actors

The ACT in Action

In this context, the first activation of the Anti-Circumvention Tool (“ACT”), introduced in the 11th package, in relation to Kyrgyzstan is a watershed moment. As the Council noted, the EU activated the tool due to the systematic and persistent failure by Kyrgyzstan to prevent the sale, supply, transfer, or export to Russia of machine tools and telecommunication equipment imported from the EU and used in the manufacture of drones and missiles. According to data referenced by the Council, for the first ten months of 2025, imports of Common High Priority Items from the EU to Kyrgyzstan were almost 800 % higher than before Russia’s war of aggression against Ukraine. For the same period, exports of CHP items from Kyrgyzstan to Russia were 1 200 % higher than before Russia’s war of aggression.

The ACT functions as a country-level instrument targeting specific products linked to circumvention of EU sanctions. The mechanism is designed as a scalable deterrent: any third country that systematically fails to prevent re-exports of EU-sourced sensitive products to Russia can, in principle, be added. Through this precedent, the EU communicates to other governments, such as Türkiye, the UAE, Kazakhstan, and beyond, that engaging in systematic failure to prevent circumvention of EU Russia sanctions may result in the loss of certain EU trade privileges.

Deterrence and Reward

At the level of third-country private actors, the incentive framework operates through the combination of listing risk and conditional pathways to delisting. According to the European Commission, five financial institutions were removed from the relevant annexes in this package, including banks based in China and Tajikistan, following their commitments not to re-engage in the conduct for which they were initially listed. Eleven shadow fleet vessels were similarly removed.

Effective sanctions regimes require not only credible escalation mechanisms but also off-ramps where compliance is achieved. By demonstrating that delisting is available to actors that change their conduct, the EU aims to create risks and incentives for third-country actors such as banks, shipping companies, trading houses, and technology firms. These two complementary dimensions underpin the compliance incentivisation model, which addresses both state and commercial dimensions of the circumvention problem through distinct instruments.

Whether this strategy will prove sufficient to change behaviour at scale, particularly in jurisdictions with substantially greater economic leverage than Kyrgyzstan, remains to be seen. The 20th package nevertheless demonstrates that the strategy is coherent, with both types of instruments operational, and that the EU is increasingly prepared to use them.

Neutralizing Judicial Weaponization: Protections for EU Operators

Protective measures add a defensive dimension to the package, aiming to neutralise legal pressure on EU operators exerted in Russia and through third-country judicial systems. Russia has increasingly weaponised its judicial system against EU companies complying with sanctions obligations. Articles 248.1 and 248.2 of Russia’s Arbitration Procedure Code assert exclusive jurisdiction over sanctions-related disputes, enabling Russian courts to issue judgments against EU operators, which the Russian parties to those disputes then seek to enforce through cooperative third-country jurisdictions.

Building on measures introduced in previous packages on non-recognition, the 20th package continues to broaden the toolkit. EU companies may now seek anti-suit injunctions from member state courts ordering Russian parties to discontinue such proceedings, with financial penalties for non-compliance. The damages recovery framework has also been expanded to permit recovery not only against parties initiating proceedings in third countries but also against those subsequently seeking to enforce such judgments outside Russia. The prohibition on the satisfaction of claims has similarly been expanded.

Three new annexes introduce transaction prohibitions against entities benefiting from Russia’s temporary management expropriation of EU assets, entities exploiting EU intellectual property without consent, and persons enforcing Russian court decisions based on sanctioned claims in third countries. The mandatory notification requirement to Member State competent authorities creates a formal reporting pipeline that will over time generate intelligence for future designation rounds.

The Road Ahead: Can the EU Sustain Its Sanctions Leadership?

As Russia’s war of aggression against Ukraine enters its fifth year, the 20th package was adopted without parallel United States involvement, reflecting both a broader shift in transatlantic sanctions coordination and the growing fragmentation of the global landscape.

Overall, these measures reflect an EU sanctions framework that is expanding in reach while becoming more enforcement-oriented and increasingly protective of EU interests. The package is significant not only for the restrictions it imposes but also for what it signals about the EU’s evolving conception of sanctions and its growing readiness to use them strategically. In that sense, the 20th package marks a turning point in both form and substance. While the reach of EU sanctions continues to grow, its financial leverage and enforcement capacity remain materially narrower than those historically exercised by the United States. Deeper coordination with like-minded partners, particularly the United Kingdom and Canada, which have already aligned on key measures, could partially bridge these gaps and reinforce the multilateral architecture that US disengagement has weakened.

Work on the 21st package is reported to be underway. Absent new obstacles arising from other member states, the EU is poised to become the principal architect of Russia sanctions policy. This is not a role the EU initially sought in 2022, but one it is progressively assuming with growing institutional confidence and technical capability.

The central question is whether the EU can sustain the political cohesion, enforcement coordination, and external leverage required to operate as an effective long-term sanctions authority in its own right. The 21st package may provide the first real indication of whether the EU can maintain that role over time. The EU’s ability to sustain this role will define not only the future of Russia sanctions but its position as a global sanctions power.

Welcome to This Month in EU Sanctions — briefings and podcast episodes at the crossroads of EU law, foreign policy, and corporate compliance. Stay ahead in a fast-evolving EU sanctions and export control landscape by subscribing to the newsletter and podcast. For March 2026, here are the main updates.

New EU Sanctions

Iran

On 16 March 2026, the Council of the European Union (the “Council”) imposed new sanctions an additional 16 persons and three entities over serious human rights violations in Iran for their involvement in serious human rights violations. The new sanctions focus on key figures and organizations responsible for the violent suppression of street protests in January 2026, which resulted in thousands of civilian casualties. The new listings include:

• Iran’s Deputy Minister of the Interior for Security and Law Enforcement Affairs;

• Commanders from local branches of the Islamic Revolutionary Guard Corps (”IRGC”), including the Mohammad Rasulullah Corps in Tehran and the Imam Reza IRGC in Khorasan Razavi Province;

• Members of the judiciary who have participated in the prosecution of peaceful protesters, civil activists, women’s rights advocates, journalists, and political dissidents;

• Naji Research and Development Company (NRDC), an IT firm behind the Nazer mobile app used by Iranian authorities for citizen surveillance, and the Head of Tehran’s Cyber Police, who plays a central role in internet censorship and the prosecution of citizens over digital content.

With these latest additions, the EU’s sanctions for human rights abuses in Iran now cover 263 individuals and 53 entities (See Council Implementing Decision (CFSP) 2026/645 and Council Implementing Regulation (EU) 2026/648). On 30 March 2026, the Council extended the Iran human rights sanctions regime until April 2027. The same day, it also updated the nuclear-related sanctions on Iran to reflect changes to the EU dual-use regulation.

Cyber Attacks

On 16 March 2026, the Council sanctioned three entities and two individuals for their involvement in cyber-attacks targeting EU member states and partners. The new listings include:

• Integrity Technology Group (China) for providing products used to compromise and access over 65,000 devices across six EU member states between 2022 and 2023.

• Anxun Information Technology (China) for offering hacking services targeting critical infrastructure in EU member states and third countries. Two of its co-founders were also sanctioned for their direct involvement in these cyber-attacks.

• Emennet Pasargad (Iran) for unlawfully accessing a French subscriber database, advertised stolen data on the dark web, compromised advertising billboards to spread disinformation during the 2024 Paris Olympic Games, and disrupted a Swedish SMS service affecting numerous EU citizens.

The EU’s horizontal cyber sanctions regime now applies to 19 individuals and seven entities (See Council Decision (CFSP) 2026/588 and Council Implementing Regulation (EU) 2026/589).

Russia Hybrid Threats

On 16 March 2026, the Council sanctioned four individuals for their involvement in Russia’s hybrid activities, specifically Foreign Information Manipulation and Interference (FIMI) targeting the EU, its member states, and partners. The new listings include:

• Sergey Klyuchenkov (Russia) for spreading disinformation to justify Russia’s war against Ukraine, advocates for violence in Ukraine (including against civilians), and promotes the occupation of Baltic states and retaliatory strikes against Ukraine’s supporters (including the US, Türkiye, Germany, France, UK).

• Ernest Mackevičius (Lithuanian-born, Russia), hosting a Russian state TV evening news programme, regularly disseminating false narratives about Russia’s war in Ukraine and the Ukrainian armed forces.

• Graham Phillips (UK) for justifying Russia’s war through disinformation, films propaganda content in Russian-occupied Ukrainian territories, and writes articles supporting Russia’s occupation.

• Adrien Bocquet (France) for amplifying Kremlin propaganda in Europe and Russia through appearances at conflict sites, interviews on Russian TV, and contributions to Kremlin-funded outlets.

The EU’s restrictive measures for Russia’s destabilising activities now apply to 69 individuals and 17 entities (See Council Decision (CFSP) 2026/646 and Council Implementing Regulation (EU) 2026/647. Relatedly, the Council adopted conclusions on advancing the EU’s capacity to counter hybrid threats.

Russian aggression against Ukraine

On 14 March 2026, the Council extended individual listings over Ukraine’s territorial integrity for a further six months. On 16 March 2026, the Council sanctioned nine individuals for their major role in the Bucha massacre (February–March 2022). EU’s sanctions under this regime now apply to around 2,600 individuals and entities (See Council Decision (CFSP) 2026/614 and Council Implementing Regulation (EU) 2026/615).

Policy Developments

Ukraine

On 19 March 2026, the European Council noted in its conclusions on Ukraine that:

The European Union remains determined to further increase pressure on Russia and continue weakening Russia’s war economy so that it stops its brutal war of aggression and engages in meaningful negotiations towards peace. The European Council looks forward to the swift adoption of the 20th sanctions package. It reiterates the importance of further reducing Russia’s energy revenues and further constraining Russia’s banking system, and took stock of efforts to curb Russia’s shadow fleet operations. Undermining the Russian shadow fleet’s business model requires a ‘whole of route’ approach, including by addressing through a common approach the significant environmental, security and maritime safety risks posed by such vessels. In this respect, the European Council calls for further efforts and coordinated action by Member States. It also stresses the importance of continued coordination with G7 and other like-minded partners on sanctions, of strengthening the enforcement of existing measures and closing loopholes, and of further reinforcing the anti-circumvention measures.

In a 31 March 2026 statement, Kaja Kallas noted, among other things:

The way to end this war is to confront Moscow, not reward it. Not to loosen sanctions, but to harden them. The 20th package is ready to go, and we will tighten the net even further, especially around Russia’s shadow fleet.

Middle East

In a 1 March 2026 statement on behalf of the European Union on developments in the Middle East, HR VP Kaja Kallas noted, in relevant parts:

The European Union has adopted extensive sanctions in response to the actions of Iranian authorities, whether their brutal repression and human rights violations against the Iranian people or threats to the region and to European and international security, through Iran’s ballistic missile and nuclear programmes, and its support for armed groups in the Middle East. We will continue to protect EU security and interests, including through additional sanctions. The European Union has consistently urged Iran to end Iran’s nuclear programme, curb its ballistic missile programme, refrain from destabilizing activities in the region and in Europe, and to cease the appalling violence and repression against its own people.

In a 9 March 2026 statement, President Costa and President von der Leyen noted, after the video conference with Leaders from Middle East countries on the war in Iran that “[...] The European Union has been consistent in its position on Iran’s activities and has repeatedly called on their leadership to end its nuclear program and curb its ballistic missile program. The European Union has also condemned the unacceptable repression and violence perpetrated by the Iranian regime against its own citizens.”

A New Doctrine?

In a 9 March 2026 speech at the EU Ambassadors Conference, Ursula von der Leyen noted, among other things, that:

Europe can no longer be a custodian for the old-world order, for a world that has gone and will not return. We will always defend and uphold the rules-based system that we helped to build with our allies, but we can no longer rely on it as the only way to defend our interests or assume its rules will shelter us from the complex threats that we face. So we need to build our own European path and find new ways of cooperating with partners.

The second is that we need a clear-eyed and hard look at our foreign policy in today’s world, both in how it is designed and how it is deployed. We urgently need to reflect on whether our doctrine, our institutions and our decision making – all designed in a postwar world of stability and multilateralism – have kept pace with the speed of change around us. Whether the system that we built – with all of its well-intentioned attempts at consensus and compromise – is more a help or a hindrance to our credibility as a geopolitical actor. I know this is a stark message and a difficult conversation to have.

A New EU Sanctions Program to Tackle Transnational Crime?

On March 9 2026, the European Parliamentary Research Service (EPRS) published a briefing titled “A new horizontal sanctions regime: Migrant smuggling, trafficking in human beings and other forms of organised crime.”

EU Courts Developments

Highlights of 2025 Annual Report

In March 2025, the Court of Justice of the European Union published its annual 2025 year in review report. The report highlighted a notable continuing increase of the Court’s docket regarding EU sanctions.

Whereas, as of 31 December 2024, 91 out of 1,705 pending cases related to restrictive measures, by 31 December 2025 that number had increased to 125 out of 1,167 pending cases, representing an increase of 34 cases (approximately 37%), alongside a significant rise in their proportion of total pending cases from about 5.3% to 10.7%.

The 2025 report highlighted two cases:

• Judgment of 10 September 2025, Positive Group v Council (T-573/23) (interpreting the new criterion to freeze the funds and economic resources of entities operating in the Russian IT sector with a license issued by the Centre for Licensing, Certification and Protection of State Secrets of the Russian Federal Security Service (FSB) or a ‘weapons and military equipment’ licence administered by the Russian Ministry of Industry and Trade).

• Judgment of 15 January 2025, MegaFon v Council (T-193/23 (finding that the Council had provided a sufficiently precise explanation of the reasons for those sanctions and had been under no obligation to hear the undertaking beforehand, in order to preserve the element of surprise needed for the sanctions to be effective. It also held that the measures remain proportionate to and necessary for the public interest objective of restricting Russian military capacity in the context of the war in Ukraine, even though those measures affect MegaFon’s activities and reputation.)

Select Judgements Rendered in March 2025

In March 2025, several key judgements and opinions were delivered, including:

• On 30 March 2026, the Court rendered its judgement in joined cases Cases C-696/23 P Pumpyanskiy v Council, C-704/23 P Khudaverdyan v Council, C-711/23 P Rashnikov v Council, C-35/24 P Mazepin v Council and C-111/24 P Khan v Council, interpreting the notion of “leading businesspersons involved in economic sectors that generate significant revenue for the Russian government” and dismissing all actions.

• On 12 March 2026, the Court of Justice rendered its judgment in Case C‑84/24 EM System v AB SEB Bank, a request for a preliminary ruling from the Lithuanian Supreme Court on the interpretation of the notions “ownership and control” and the relevant thresholds.

• On 12 March 2026, the Court of Justice rendered its judgment in Case C‑465/24 SBK Art v Fortenova Group STAK, a request for a preliminary ruling from the Dutch Supreme Court on the meaning of “freezing of funds” in the context of voting rights.

• On 26 March 2026, the Court of Justice dismissed an appeal against the General Court’s refusal to annul a 2022 listing under the DRC sanctions regime in case Case C-455/24 UC v. Council.

• On 18 March 2026, the General Court rejected an application to annul the listings of Samer Al Dibs’ under the Syria sanctions regime in Case T-405/24 Al Dibs v Council.

• On 26 March 2026, the General Court dismissed an application to annul the listing of Xavier Moreau under the Russia hybrid threats sanctions regime in Case T-170/26 Moreau v. Council.

• On 19 March 2026, Advocate General Szpunar delivered his Opinion in Case C‑842/24, DNO Yemen AS v Petrolin Trading Ltd, a preliminary reference from the French Supreme Court (Cour de cassation).

• On 12 March 2026, Advocate General Campos Sánchez-Bordona delivered his Opinion in Case C-482/24 P, Global 8 Airlines v European Commission.

Compliance Guidance

Throughout the month of March 2026, the European Commission (the “Commission”) and several national competent authorities continued to publish compliance guidance, including:

• On 13 March 2026, the Commission published new FAQs concerning article 5(b)(2) of Council Regulation 833/2014 (Frequently asked questions on the provision of payments services concerning sanctions adopted following Russia’s military aggression against Ukraine).

• On 16 March 2026, the French Direction générale du Trésor and the Autorité de contrôle prudentiel et de résolution (ACPR) published new guidelines on asset freeze obligations (Lignes directrices conjointes de la Direction Générale du Trésor et de l’Autorité de contrôle prudentiel et de résolution sur la mise en œuvre des mesures de gel des avoirs).

• On March 23, 2026, the Italian @UAMA issued a notice to economic operators in applying for exemptions under Article 5n (10)(h) of Council Regulation 833/2014 (COMUNICATO TECNICO PER LA PRESENTAZIONE DI ISTANZE IN DEROGA EX ART. 5 QUINDECIES PAR. 10 LETT. H DEL REG. (UE) N. 833/2014).

EU Sanctions Directive

On 3 March 2026, a proposal for legislation transposing Directive (EU) 2024/1226 of 24 April 2024 on the definition of criminal offences and penalties for the violation of Union restrictive measures and amending Directive (EU) 2018/1673” was introduced in the French National Assembly, kicking off the legislative process.

The Podcast

Catch up with the latest three episodes of the podcast (available wherever you get your podcasts).

Tune in soon for the next episode. The podcast is available on all platforms.

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Looking Ahead

• 21 April 2026 - Foreign Affairs Council

🇪🇺 Thank you for reading This Month in EU Sanctions.✍️.

Thank you for your continued interest in This Month in EU Sanctions, a resource designed to help navigate the complexities of EU sanctions law, policy, and compliance.

As Russia’s war of aggression against Ukraine enters its fifth year, the EU’s sanctions framework is facing a new stress test. A conflict in the Middle East, whose trajectory remains uncertain, is now intersecting with existing sanctions regimes and exposing the complexity of managing overlapping geopolitical crises.

Against this backdrop, Commission President Ursula von der Leyen has warned that the EU can no longer rely solely on the traditional rules-based international system to safeguard its interests. Instead, the Union must “build its own path.”

This raises fundamental questions about the future of EU sanctions policy: What might a coherent EU sanctions doctrine look like? And how can sanctions compliance adapt to a world of overlapping geopolitical shocks?

Beyond policymaking and compliance, EU sanctions are also reshaping the landscape of international dispute resolution. They are increasingly driving litigation, arbitration, and complex cross-border disputes involving contracts, investments, enforcement actions, and jurisdictional challenges.

To unpack these developments and their implications for businesses and practitioners, the show welcomes Paschalis Paschalidis for an in-depth discussion on how EU sanctions are affecting transnational litigation and international arbitration.

• 00:00 - Overlapping geopolitical shocks and impact on EU sanctions

• 04:50 - Introducing Paschalis Paschalidis

• 07:59 - General impact of EU sanctions on the litigation and arbitration practice

• 08:55 -How do disputes about EU sanctions arise?

• 12:00 - Mapping sanctions-related claims

• 16:00 - Anti-suit and anti-anti-suit injunctions

• 20:08 - New attitudes towards litigation and arbitration

• 21:05 -The relationship between the EU legal order, sanctions, and arbitration

• 27:28 - Reviewing awards dealing with EU sanctions issues

• 29:13 - EU sanctions and investment-state arbitration

• 33:31 – Force majeure and sanctions clauses

• 39:34 – Looking ahead: rules-based international order and dispute resolution

Subscribe and listen wherever you get your podcasts.

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The geopolitical developments that unfolded in January 2026 underscored the importance of readiness and adaptation, both for policymakers and the EU private sector.

At a pivotal moment for the EU, the latest episode of podcast welcomed Rūta Bajarūnaitė, Head of the Sanctions Policy Team at Lithuania’s Ministry of Foreign Affairs, for a deep dive into the past, present, and future of EU sanctions law and policy. The conversation covered, among other topics:

• The EU’s agility in responding to geopolitical crises

• Exemptions and derogations for sensitive products

• Strengthening customs enforcement at the EU’s external borders

• Communicating sanctions guidance to businesses

• Preventing circumvention and the “best efforts” clause

• The evolving landscape of EU sanctions law and policy

The latest episode is available wherever you get your podcasts.

• Apple Podcasts

• Spotify

• YouTube

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January 2026 EU Sanctions Developments

Russia

Russian Gas Import Phase Out

On 2 February 2026, the European Union published the Regulation (EU) 2026/261, (which entered into force on 3 February 2026) confirming the termination of imports of Russian gas and laying the groundwork for the full phase-out of Russian oil. The Regulation introduces a phased prohibition on the import of Russian natural gas, covering both pipeline gas and liquefied natural gas (“LNG”) as outlined below:

• 18 February 2026: importers are required to obtain prior authorisation in order to temporarily import Russian pipeline gas and LNG until the following prohibitions enter into force:

• 25 April 2026: ban applies to Russian LNG under existing short-term supply contracts concluded before 17 June 2025.

• 17 June 2026: ban applies to Russian pipeline gas under existing short-term supply contracts concluded before 17 June 2025.

• 1 January 2027: ban applies to Russian LNG under existing long-term contracts.

• 30 September 2027: ban applies to Russian pipeline gas under existing long-term contracts.

• 18 March 2026: the prohibition on gas imports enters into force, except as otherwise specified above.

As part of the preparations for the full phase-out of Russian oil, Member States importing oil originating in, or exported directly or indirectly from, the Russian Federation shall establish a plan setting out the measures, milestones, and potential obstacles to diversifying their oil supplies (a “national oil diversification plan”), with a view to discontinuing all such imports by the end of 2027.

Oil Price Cap

On 15 January 2026, the new automatic and dynamic mechanism for adjusting the price cap on Russian crude oil was applied for the first time. Under this mechanism, the price cap was set at USD 44.10 per barrel, effective from 1 February 2026. From 15 January 2026, contracts concluded under the previous price cap may continue to be performed for a transitional period of 90 days.

Hybrid Threats & Human Rights

On 29 January 2026, the Council of the European Union (the “Council”) imposed restrictive measures on an additional six individuals in response to Russia’s continued hybrid activities, in particular its engagement in Foreign Information Manipulation and Interference (“FIMI”) targeting the European Union, its Member States, and partner countries. (See Council Decision (CFSP) 2026/260 and Council Implementing Regulation (EU) 2026/259).

Iran

On 29 January 2026, the Council adopted new sanctions over serious human rights violations and Iran’s continued support to Russia’s war of aggression against Ukraine.

Human Rights Violations

The Council adopted restrictive measures against 15 individuals and six entities involved in serious human rights violations in Iran, in response to the violent suppression of peaceful protests, including the use of excessive force, arbitrary detentions, and intimidation by security forces against demonstrators.

Restrictive measures in response to human rights violations in Iran now target a total of 247 individuals and 50 entities. These measures include asset-freeze obligations, travel bans within the European Union, and a prohibition on making funds or economic resources available to designated persons and entities. (See Council Implementing Decision (CFSP) 2026/265 and Council Implementing Regulation (EU) 2026/267).

Relatedly, Member States announced having unanimously agreed to designate the Islamic Revolutionary Guard Corps as a terrorist organization.

Iran’s support to Russia’s war of aggression against Ukraine

The Council also imposed restrictive measures on four persons and six entities under the EU dedicated sanctions regime, against the Iranian state-sponsored programme for the development and production of unmanned aerial vehicles (“UAVs”).

The new measures target key entities and individuals involved in Iran’s ballistic missile and UAV programmes, including major missile development entities, front companies linked to the Ministry of Defence, and private companies supplying critical components to the IRGC. The listings also cover business leaders and shareholders engaged in missile and UAV development.

With these additions, the sanctions regime now applies to 24 individuals and 26 entities and remains in force until 27 July 2026. The Council also expanded export restrictions from the EU to Iran to cover additional components, materials, and technologies used in the development and production of missiles and UAVs (See Council Decision (CFSP) 2026/263 and Council Implementing Regulation (EU) 2026/262).

Other EU Sanctions Developments

• Sudan: on 29 January 2026, the EU Council imposed restrictive measures on seven individuals in response to the continued deterioration of the situation in Sudan, including the sharp escalation of violence resulting in severe loss of life in Darfur and across the country, as well as ongoing violations of international human rights law and international humanitarian law. 5 of them are RSF-affiliated and 2 are SAF-affiliated individuals (See Council Decision (CFSP) 2026/254 and Council Implementing Regulation (EU) 2026/251.

• Hamas and PIJ: on 16 January 2026, the EU Council has extended, until 20 January 2027, the existing restrictive measures against those who support, facilitate or enable violent actions by Hamas and the Palestinian Islamic Jihad (“PIJ”). (See Council Decision (CFSP) 2024/385).

• Guatemala: on 9 January 2026, the EU Council has extended by one year, until 13 January 2027, the targeted restrictive measures imposed on those responsible for actions undermining democracy, the rule of law, and the peaceful transfer of power in Guatemala. (See consolidated text: Council Regulation (EU) 2024/287 of 12 January 2024).

Compliance Updates

FAQs

In January 2025, the European Commission (the “Commission”) published three updates to its FAQs on sanctions against Russia and Belarus (the “FAQs”).

• On 15 January 2026, the Commission updated its FAQs ahead of change to Russia oil price cap.

• On 22 January 2026, the Commission published new FAQs on the application of Article 5n (service ban), following entry into force of 19th sanctions package.

• On 23 January 2026, the Commission published new FAQs on the application of Article 5af of Regulation (EU) 833/2014 (Nord Stream transaction ban) introduced by the 18th Russia sanctions package,

The latest version of the consolidated version of the FAQs is dated 23 January 2026.

Italy

The Italian Government has published the Legislative Decree No. 211/2025, effective as of January 24, implementing EU Directive 2024/1226 on violations of EU restrictive measures and introducing new criminal offenses, thereby significantly reshaping the applicable sanctions framework. These offenses are now included among those triggering corporate liability under Legislative Decree No. 231/2001 (the “Decree 231”).

Enforcement Coordination

OLAF coordinated an international investigation into suspected circumvention of EU sanctions involving over 760 transport vehicles. This follows broader initiatives by OLAF and Europol to strengthen the fight against sanctions circumvention.

Developments in EU Courts

In January 2026, the Court of Justice of the EU rendered several judgements relating to EU sanctions.

• Judgment of ECJ of 15 January 2026 in Issam Anbouba v Council (Case C-494/24) and judgment of the General Court of 14 January 2026 (Case T-403/24) rejecting Issam Anbouba delisting applications under the Syrian sanctions regime.

• Judgment of the General Court of 14 January 2026 in Euro Asia Cargo v Council (Case T-232/24), dismissing the action brought by Euro Asia Cargo challenging its inclusion in Annex IV to Regulation (EU) No 833/2014 under the Russia-Ukraine sanctions regime.

• Judgment of the General Court of 14 January 2026 in Feras Al Akhras v Council (Case T-176/24), dismissing Feras Al Akhras’ delisting application under Syrian sanction regime.

In addition, the Advocate General Medina delivered an Opinion in the appeal lodged by the National Settlement Depository (Case C-801/24 P), examining the interpretation of the concept of “support for the Russian Government”.

Looking Ahead

• Foreign Affairs Council, 23 February 2026

Emboldened by the operational success of the 3 January 2026 military operation in Venezuela, the Trump administration has declined, in several statements, to rule out the use of force or other forms of coercion to pursue U.S. interests in Greenland. As such pronouncements could ultimately question the territorial integrity and sovereignty of Denmark, the developing “Greenland crisis” presents one of the most significant geostrategic struggles for the EU in decades, raising questions about how the EU might act when the core interests of the EU and its Member States are threatened—even by an ally.

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Does the EU Have a Plan?

This dire situation engages institutional responsibilities that some in the EU remain reluctant to fully acknowledge. Yet the EU owes its citizens and its future a clear-eyed assessment. In light of the current U.S. administration’s force-driven approach to foreign policy, and conduct that appears ready to depart from established international legal norms, the EU must find ways to translate its values into action with agility and resolve. Because the EU lacks immediate military capacity to deter, it needs to consider other instruments, beginning with its economic and regulatory power.

Since February 2022, the EU has demonstrated an impressive capacity to innovate in the field of restrictive measures (sanctions) in response to Russia’s war of aggression against Ukraine. In doing so, it overcame several long-standing political and legal hurdles and reaffirmed its commitment to defending its values, sovereignty and territorial integrity under international law. Although the EU has built a robust sanctions capacity for this new world, it seems unprepared—and, in some respects, unwilling—to address the full spectrum of challenges posed by the Greenland crisis.

The EU’s newly-found capacity to assert itself now has direct relevance beyond the Ukrainian context. The challenge is how the EU can respond to certain U.S. threats or actions in relation to Greenland—and, more broadly, how it prepares for future crises involving new actors and threats. At this juncture, the issue is not whether the EU should sanction the United States, but whether it has sufficient sanctions readiness to address these new threats, even where the source is a historic ally.

Crossroads of Transatlantic Security

The U.S. has long recognised the strategic importance of Greenland, a territory situated at the nexus of the Arctic, North Atlantic, and North American defence perimeter. Against the purported backdrop of increased Russian militarisation of the Arctic and China’s growing economic and scientific presence, U.S. stated interest in Greenland is neither novel nor inherently illegitimate.

For nearly 160 years, since U.S. Secretary of State William H. Seward first identified Greenland as strategically significant, successive U.S. administrations have pursued territorial interests with Denmark through negotiation and cooperation (such as the purchase of the Danish Virgin Islands in 1917). When the Truman administration explored the possibility of purchasing Greenland in 1946—a proposal firmly rejected by Denmark—the agreed compromise was deeper defence cooperation. This culminated in a 27 April 1951 Defence Agreement, still in force today, which grants the United States extensive defence rights, including a permanent military presence at the Pituffik Space Base.

In August 2019, the first Trump administration publicly outlined an intention to buy Greenland, characterising the idea as a “real estate deal.” From 2025 onwards, U.S. rhetoric intensified, portraying Greenland not as a subject of negotiation between allies, but as a national security imperative justifying all possible forms of action.

From Rhetoric to Threats

From an EU policy perspective, what should be troubling is not the interest itself, but the apparent readiness of the current U.S. administration to pursue it through means that could challenge the sovereignty of an EU Member State and the integrity of established alliance frameworks. As a semi-autonomous jurisdiction, Greenland is part of Denmark, which remains fully responsible for Greenland’s foreign relations and defence. Greenland’s current status is inseparable from that of Denmark; Greenlanders are Danish nationals and therefore EU citizens.

What distinguishes this latest phase is the emergence of language, signalling and potential acts associated with coercion. Statements by senior U.S. officials declining to exclude the use of force in Greenland, reportedly exploring military scenarios, coupled with possible hybrid tactics, including offering lump-sum payments to residents to induce acceptance, represent a new threat to Greenland, Denmark and by extension the EU. In December 2025, Denmark recognised this when its Defence Intelligence Service reportedly assessed that certain actions by the U.S. could pose a potential security risk to the country.

Articulating a Lucid Response

The Greenland crisis is not episodic and must be placed in the broader context of the current U.S. administration’s view of the EU. Over the first year of the current administration, a growing number of U.S. actions and pronouncements have openly targeted the EU itself. They include public statements questioning core alliance commitments, attacks on European democratic institutions, and the use of targeted sanctions—such as designations and visa restrictions—against individual European officials, demonstrating the EU’s exposure to such measures from even its closest allies. These actions are reflected in elements crystallised in the December 2025 U.S. National Security Strategy, and, most seriously, in the apparent refusal to rule out the use of force or other coercive actions regarding Greenland.

A Policy Gap

EU sanctions are an essential element of EU external action. They are, fundamentally, a policy tool. EU sanctions policy can serve a broad range of objectives, such as promoting values and norms or protecting security interests.

Under EU primary law, EU external action must be confined to certain defined objectives. Article 21(2)(a) of the Treaty on European Union (“TEU”) provides that the EU must define and pursue common policies and actions, among other things, in order to safeguard its values, fundamental interests, security, independence, and integrity. This Treaty provision is not aspirational; it defines the purpose and scope of EU external action.

To date, the EU has not articulated a common policy vis-à-vis the United States in relation to the situation in Greenland. However, the 6 January 2026 joint statement on Greenland signed by six EU Member States (France, Germany, Italy, Poland, Spain, Denmark) noted, in relevant parts:

Security in the Arctic must therefore be achieved collectively, in conjunction with NATO allies including the United States, by upholding the principles of the UN Charter, including sovereignty, territorial integrity and the inviolability of borders. These are universal principles, and we will not stop defending them.

The United States is an essential partner in this endeavour, as a NATO ally and through the defence agreement between the Kingdom of Denmark and the United States of 1951.

Greenland belongs to its people. It is for Denmark and Greenland, and them only, to decide on matters concerning Denmark and Greenland (emphasis added).

That statement lays out core principles and interests.

Drawing Red Lines

Broadly speaking, EU sanctions are adopted through a two-step process: a Common Foreign and Security Policy (“CFSP”) decision under Article 29 TEU, followed by implementing measures under Article 215 of the Treaty on the Functioning of the European Union. The scope of EU law and the scope of EU external action are distinct. While EU law does not apply territorially to Greenland, an overseas country and territory, the EU may adopt CFSP measures—including sanctions—in response to conduct that threatens the sovereignty or security of a Member State, regardless of where it occurs.

There is neither a legal requirement or supposition that the target of EU sanctions policy be an adversary, nor is there any exclusion for EU allies. The absence of precedent for sanctions against certain policies of the United States (with the limited exception of the EU blocking statute which isn’t sanctions per se) or another ally reflects political self-restraint, not legal impossibility.

Conceptually, as part of the contingency planning, the EU would need to define, however, a set of red lines or triggers that would lead to the imposition of targeted measures. Under Article 21(2)(a) TEU, the EU is obligated to define and pursue policies that safeguard its values, security, and integrity. In the context of Greenland, this mandate requires clear red lines to deter coercion, a conduct that would need to be defined.

Based on the 6 January 2026 joint statement and observed U.S. conduct or stated intentions, potential triggers for EU sanctions action could include, among other things:

• Threats or use of force in violation of the UN Charter;

• Actions threatening or undermining Denmark’s sovereignty or territorial integrity; or

• Hybrid interference (e.g., disinformation, election meddling) targeting Greenland’s or Denmark’s civil society.

While these triggers are illustrative, they reflect potential breaches of EU red lines that could justify a calibrated response.

Similarly to other existing EU sanctions regimes, a targeted action in respect of the Greenland crisis should have a clear scope, limits and safeguards. As with all EU sanctions regimes, any measures adopted would necessarily be temporary, targeted, and reversible, consistent with the principles of proportionality, legal certainty, and effective judicial review of the Court of Justice as relevant. Their purpose would be to induce a change in policy or behaviour that undermines the sovereignty and territorial integrity of Denmark and the EU’s foundational values more generally.

Identifying Options

In its contingency planning, the EU should develop a list of potential targeted actions that it would present for consideration based on defined triggers following an escalatory scenario. EU sanctions law and policy offers a broad range of scalable targeted options that can be tailored to specific policy objectives. These traditionally include individual travel bans, asset freezes, and limitations on trade in goods and services, as determined by the 27 Member States acting within the Council of the EU. Targeted actions such as travel bans need not be spectacular to be effective.

The EU has a full and modern sanctions toolbox. Since 2022, the EU has adopted nearly twenty sanctions packages against Russia. The EU has learned to use sanctions to tackle hybrid threats, disinformation and election interference under specific Russia, Belarus, and Moldova sanctions regulations. It also knows to create sanctions regimes without using them for policy signalling (e.g., Lebanon). The legal and institutional experience is therefore not only available, but well-developed. The issue is whether that knowledge is now actionable to address another threat, if that becomes necessary.

Beyond classic restrictive measures, the EU could also consider targeted transaction bans, suspending or conditioning elements of broader economic cooperation, for example, progress under the proposed 21 August 2025 Framework Agreement on Reciprocal, Fair, and Balanced Trade—which envisages substantial EU investment in the United States and increased procurement of U.S. defence equipment.

Access to the EU market could require non-interference with core EU values, internal affairs and EU laws and regulations. Directing EU capital towards the U.S. presupposes mutual trust and alignment of strategic interests. This assumption becomes untenable if coercive pressure is applied against an EU Member State or the EU. The opportunity cost is significant since according to the Draghi report on EU competitiveness, the EU requires between EUR 750 and 800 billion in additional annual investment in the EU economy to meet its own strategic objectives whereas the August 2025 agreement with the Trump administration commits up to USD 600 billion in EU investment in the United States through 2028.

Evaluating the Risks

The purpose of contingency planning is not necessarily to proceed with the sanctions action, but to be prepared to take it. It is not uncommon in sanctions policy to define a specific legal framework laying out the basis for action and yet not use it because the policy conditions are not met. The sanctions readiness plan would envision the prospect of possible sanctions before the threat materialises.

The contingency plan should evaluate the following four risks.

1. Risk of escalation or confrontation with the U.S. administration while seeking U.S. support for Ukraine.

The issue here is whether security interdependence would be an absolute bar to targeted actions, if the sanctions policy scenario materialises. The risk analysis should evaluate how far U.S. policy in support of Ukraine has already shifted. American support for Ukraine has reportedly been significantly reduced, and reported progress on security guarantees remains contingent on Russian consent to a ceasefire, the prospect of which remains uncertain. Moreover, recent U.S. sanctions policy and actions (including regarding Russian oil) appear increasingly driven by global energy and geopolitical considerations beyond Ukraine, such as Venezuela and Iran. That said, increased pressure by the U.S. on Russia weights heavily on improving the odds of a resolution of the war favourable to Ukraine.

At the same time, alliance unity cannot be premised on the tolerance of coercion among allies. Failing to articulate red lines arguably weakens, rather than strengthens, collective security. In addition, creating incentives to address the Greenland crisis through sanctions outside of NATO might insulate the alliance from those tensions and decouple the issues. Considering sanctions as a response if certain red lines are crossed instead of focusing on the impact on NATO, could insulate, to a certain extent, the discussion from the security forum. In the long-term, if successful in preventing an escalatory solution to the Greenland, a targeted EU sanctions strategy could reinforce the trans-Atlantic alliance.

2. Risk of insufficient power to effectively influence U.S. policy.

The question here is what leverage the EU actually has to build a sanctions strategy vis-a-vis the current U.S. administration in relation to Greenland crisis. Sanctions are inherently an instrument of economic power in support of foreign policy objectives. Few actors in the world wield as much economic power as the European Union. As the world’s largest single market with around 440 million consumers, the EU forms one of the most integrated economic regions on the planet. The combined EU economy accounts for approximately 14–15 % of global GDP, placing it alongside China and the United States as a top-tier global economic power.

The EU is also the world’s largest trading bloc, leading in both the export and import of goods and services and serving as the top trading partner for dozens of countries worldwide. Its role in international investment is similarly dominant, with the EU ranking first in both inbound and outbound foreign direct investment flows, underscoring its central position in global economic networks. If the lack of military force is a real weakness for the EU, its economy could provide significant leverage for sanctions policy. The issue is whether the EU is sufficiently self-aware of the opportunities that its economic strength provides.

3. Risk of not being able to move swiftly enough.

A reoccurring criticism casts the EU as an organisation unable to adapt to new realities. This ignores the institutional learning curve since 2022. Sanctions need not be comprehensive to be impactful, and even the credible initiation of the process would clarify the EU’s position and prompt recalculation by the U.S. Drawing up a list of targeted measures is not complicated. The EU has learned to swiftly deliberate and consider sanctions. Some EU sanctions could be fast-tracked. It is one of the reasons why EU sanctions should be considered in the scenario. The Anti-Coercion Instrument that entered into force in 2023 was arguably not designed for prompt and targeted action to respond to an escalatory scenario. It would not allow the imposition of select travel bans, for instance, although it could be relevant to address specific threats (such as tariffs) and could be included in the readiness plan. A key question in this aspect of the contingency planning scenario is where the impetus for a dedicated sanctions policy would originate with the EU and its institutions and who would shepherd it through the process. The EU could consider conferring with other non EU NATO partners and within the G7+ coalition.

4. Risk that economic cost would follow.

It is correct that sanctions would entail economic costs for the EU. But those costs should be weighed against the price of inaction. Failure to respond would embolden coercive behaviour and signal vulnerability to other powers, including Russia and China. The strategic and opportunity costs of passivity are likely to exceed those of a measured, targeted response. Sanctions strategy planning would necessitate performing that assessment.

Admittedly, sanctions could backfire if the assessment ultimately overplays the EU’s hand or underestimates a potential U.S. reaction, which is difficult to predict and evaluate. As with other foreign policy issues, the question would likely trigger strong internal debates (requiring unanimity) that if not managed adequately would weaken the EU’s credibility (see discussions regarding Israel). A calibrated, scaled-approach to measures could mitigate those risks.

What is already clear from the Greenland crisis, considering the lack of a coordinated response at the Member State, is that the EU does not have a steering mechanism to initiate and coordinate sanctions policy contingency planning. From an institutional perspective, the absence of contingency sanctions planning is itself a strategic vulnerability.

Finding Leverage: Sanctions Readiness as Deterrence

All in all, sanctions need not—and should not—be inevitable. This analysis does not assume inevitability, nor does it suggest desirability. Rather, it argues only that readiness itself has legal, strategic, and deterrent value. The objective is not escalation, but stabilisation; not rupture, but restraint.

It is for Denmark and Greenland, and them only, to decide on matters concerning Denmark and Greenland, whether it is through existing frameworks such as the 1951 agreement or otherwise. However, the EU would need to communicate, clearly and unequivocally, that if certain red lines are crossed, targeted sanctions would be considered. What is currently missing is a clear plan that the EU is prepared to use sanctions if necessary.

The conclusion is uncomfortable, and for many it may still seem inconceivable. Yet the reality confronting the EU at this moment is one few would have ever imagined. The responsibility is collective. Whether the EU chooses to confront this reality explicitly or remain passive, the implications for its sovereignty and credibility will be significant.

We live in a new age of EU sanctions and export controls. This Month in EU Sanctions brings together the most significant legal and policy developments, helping you stay ahead in a rapidly evolving landscape. For December 2025, here are the updates.

EU Russia Sanctions

Fast-Track Shadow Fleet Enforcement

In December 2025, the Council of the European Union (the “Council”) took several actions against the Russian shadow fleet and its ecosystem.

On 18 December 2025, the Council sanctioned an additional 41 vessels, updating Annex XVI to Decision 2014/512/CFSP.

This measure is intended to target non-EU tankers that are part of Putin’s shadow fleet circumventing the oil price cap mechanism or support the energy sector of Russia, or vessels that are responsible for transporting military equipment for Russia or involved in the transport of stolen Ukrainian grain and cultural goods from Ukraine.

The latest action (See Council Decision (CFSP) 2025/2617 and Council Regulation (EU) 2025/2618) brings the total of designated vessels to almost 600. Moving forward, shadow fleet designations will be fast-tracked, with monthly decisions on a rolling basis.

Targeting enablers of the shadow fleet, on 15 December 2025, the Council sanctioned an additional five individuals and four entities in the UAE, Vietnam and Russia.

The listed individuals are businessmen linked are [...] all involved in an economic sector providing a substantial source of revenue to the Government of the Russian Federation. Additionally, they control vessels transporting crude oil or petroleum products, originating in Russia or being exported from Russia, concealing the actual origin of the oil, while practicing irregular and high-risk shipping practices.

With the 15 December 2025 action (See Council Decision (CFSP) 2025/2594 and Council Implementing Regulation (EU) 2025/2588), EU financial sanctions adopted in response to Russia’s ongoing aggression against Ukraine apply to over 2,600 individuals and entities.

Relatedly, on 15 December 2025, the EU and its member states adopted a declaration on States on making full use of the international law of the sea framework relating to threats from the “shadow fleet” and to the protection of critical undersea infrastructure.

Enhanced Central Bank of Russia and Extended Sectoral Sanctions

On 12 December 2025, the Council adopted Council Regulation (EU) 2025/2600 to prohibit, on a temporary basis, any transfers of Central Bank of Russia (“CBR”) assets immobilised in the EU back to Russia. This decision was taken under Article 122 of the TFEU as a matter of urgency to limit the damage to the EU economy caused by Russia’s war against Ukraine, complementing existing measures against the CBR.

On 22 December 2025, the Council renewed the EU sectoral sanctions in view of Russia’s continuing actions destabilising the situation in Ukraine for a further 6 months, until 31 July 2026.

Hybrid Threats & Human Rights

On 15 December 2025, the Council sanctioned 12 individuals and two entities, in light of Russia’s continued hybrid activities, including Foreign Information Manipulation and Interference (FIMI) and malicious cyber activities against the EU and its member states (See Council Decision (CFSP) 2025/2572 and Council Implementing Regulation (EU) 2025/2568).

On 22 December 2025, the Council sanctioned two persons responsible for serious violations of human rights, the repression of civil society and democratic opposition, and the undermining of democracy and the rule of law in Russia (See Council Decision (CFSP) 2025/2637 and Council Implementing Regulation (EU) 2025/2638).

Russian Gas Import Phase Out

On 3 December 2025, the Council and the European Parliament reached an agreement on the regulation to phase out imports of Russian natural gas. Imports of Russian pipeline gas and LNG into the EU will be prohibited from six weeks after entry into force of the regulation, while maintaining a transition period for existing contracts (with a full ban from the end of 2026 and autumn 2027 respectively).

EU Belarus Sanctions

On 15 December 2025, the Council introduced a new criterion allowing to sanction individuals, entities and bodies benefiting from, involved in or facilitating actions or policies attributable to Belarus, which undermine or threaten democracy, the rule of law, stability or security in the EU and its member states. The decision follows the recent meteorological balloon incursions into Lithuania’s airspace that had been condemned on 29 October 2025.

• The EU will be able to sanction individuals and entities engaged in actions targeted at the functioning of democratic institutions, economic activities or services of public interest of the EU and its member states, including actions that support or facilitate foreign information manipulation and interference.

• The EU will also be able to target the unauthorised entry into the territory of a member state. The new criterion also covers actions aimed at interfering with, damaging or destroying critical infrastructure, as well as widespread or systematic actions resulting in the disruption of such infrastructure.

See Council Decision (CFSP) 2025/2585 and Council Regulation (CFSP) 2025/2601.

Other EU Sanctions Developments

• Haiti: On 15 December 2025, the Council adopted additional sanctions against three Haitian individuals as well as one entity in view of the escalating gang violence, unremitting serious human rights abuses committed by the gangs in the country, and the continuing impunity for the perpetrators (See Council Decision (CFSP) 2025/2561 and Council Implementing Regulation (EU) 2025/2567.

• Venezuela: On 15 December 2025, the Council extended existing sanctions in view of the situation in Venezuela for a further year, until 10 January 2027 (See Council Decision (CFSP) 2025/2586 and Council Implementing Regulation (EU) 2025/2559).

• North Korea: On 15 December 2025, the Council made updates to the list of persons and entities implementing Regulation (EU) 2017/1509 (See Council Decision (CFSP) 2025/2580).

• DRC: On 8 December 2026, the Council renewed its sanctions in view of the situation in the Democratic Republic of the Congo (“DRC”) by another year, until 12 December 2026 (See Council Decision (CFSP) 2025/2507 and Council Implementing Regulation (EU) 2025/2508).

• EU Global Human Rights: On 4 December 2025, the Council prolonged the list of individuals, entities and bodies subject to sanctions for serious human rights violations and abuses, for another year until 8 December 2026 (See Council Decision (CFSP) 2025/2469 and Council Implementing Regulation (EU) 2025/2471 of 4 December 2025).

• Mali: On 1 December 2025, the Council extended the sanctions in view of the situation in Mali for one year, until 14 December 2026 (See Council Decision (CFSP) 2025/2436) and Council Implementing Regulation (EU) 2025/2435.

Policy Updates

Russia Sanctions

Following the 15 December 2025 Foreign Affairs Council, HR VP Kaja Kallas noted:

We decided last time that we are going to put sanctions on shadow fleet on rolling basis. So, like I said, we did 40 vessels and some enablers today. So not waiting, huge packages, but actually going with the ones that we can move forward. Because really, when we did it, the first time we saw it has a huge impact on the oil revenues. Of course, Russia is getting more creative, has some friends, and we need to be agile and really move fast. And that is why we are doing this on rolling basis every month. Of course, the work on the 20th Sanctions Package is going in parallel, but I think we should not wait, and we have shown that we are not waiting behind those packages, but actually moving faster with the rolling of the sanctions on shadow fleet. Lifting sanctions right now not discussed because we are definitely not there. As I said, we have to put the pressure on Russia so we are doing actually more in order to deprive them from the funds to finance this war.

Regarding sanctions, the 18 December 2025 European Council Conclusions noted, among other things:

The European Union remains determined to maintain and increase pressure on Russia to stop its brutal war of aggression and engage in meaningful negotiations towards peace. In this context, the European Council calls on the Council to continue working on a new sanctions package, with the aim of adopting it as soon as possible after its presentation in early 2026. It also stresses the importance of further coordination with G7 and other like-minded partners on sanctions, and of further reinforcing the anti-circumvention measures.

Migrant Smuggling

The Commission is preparing a new sanctions regime that would allow the EU to target migrant smugglers. In a 10 December 2025 speech at the second Conference of the Global Alliance to Counter Migrant Smuggling, European Commission President Ursula von der Leyen noted:

This is why Europe is developing a stringent new sanctions regime against smugglers – in coordination with our G7 partners. We want to be able to freeze the smugglers’ assets – to destroy their very financial bases. But also, to issue travel bans, so that we can restrict their movements. Our goal is very simple. We want to bankrupt their businesses through all means available.

Compliance Updates

In December 2025, the European Commission (the “Commission”) published three updates to its FAQs on sanctions against Russia and Belarus (the “FAQs”).

• On 19 December 2025, regarding Article 5ah of Council Regulation (EU) No 833/2014 (special economic zones).

• On 17 December 2025, regarding Articles 2, 2a and 2b of Council Regulation (EU) No 833/2014. Correlation table included (export related restrictions for dual-use goods and advanced technologies).

• On 17 December 2025, regarding Article 5v and 5w of Council Regulation (EU) No 833/2014 (movement of Russian diplomats).

The latest version of the consolidated version of the FAQs is dated 19 December 2025.

Developments in EU Courts

In December 2025, the Court of Justice of the European Union rendered 10 judgments (six of which related to Russia sanctions) under a variety of sanctions programs. These include:

• Judgment of the General Court of 17 December 2025 in Rotenberg v Council (Case T-268/24), dismissing an action under the Russia-Ukraine sanctions regime.

• Judgment of the General Court of 17 December 2025 in Melnichenko v Council (Case T-1114/23), dismissing an action under the Russia-Ukraine sanctions regime.

• Judgement of the General Court of 17 December 2025 in Melnichenko v Council (Case T-1113/23), dismissing an action under the Russia-Ukraine sanctions regime.

• Order of the General Court of 15 December 2025 in Douamba v Council (Case T-143/25) dismissing an action under the Russia hybrid threat sanctions regime.

• Judgment of the General Court of 10 December 2025 in Pumpyanskiy v Council (Case T-369/24), dismissing an action under the Russia-Ukraine sanctions regime.

• Judgement of the General Court of 10 December 2025, in Middle East Bank, Munich Branch v Commission (Case T-518/23) dismissing an action brought against a Commission decision adopted under the EU Blocking Statute.

• Judgment of the General Court of 3 December 2025 in UC v Council (Case T-72/24), dismissing an action under the DRC sanctions regime.

• Judgement of the General Court of 3 December 2025, in Foz v Council (Case T-414/24), dismissing an action under the Syria sanctions regime.

• Judgement of the General Court of 3 December 2025 in Timchenko v Council (Case T-285/24), dismissing an action under the Russia-Ukraine sanctions regime.

• Judgement of the General Court of 3 December 2025, in Timchenko v Council (Case T-1107/23), dismissing an action under the Russia-Ukraine sanctions regime.

Concerning references for preliminary rulings, as of the end of 2025, there were approximately 20 cases related to EU sanctions pending before the Court of Justice. These cases concern a broad range of interpretative issues in both the financial and sectoral sanctions context.

Economic Security Updates

Joint Communication

On 3 December 2025, the Commission published a Joint Communication on strengthening Economic Security. The Commission identified six priority high-risk areas to “be more strategic in leveraging its economic weight and the access to its Single Market”:

• Reducing strategic dependencies for goods and services;

• Attracting safe investment into the EU;

• Supporting a vibrant European defence and space industry, and other critical industrial sectors;

• Securing EU leadership across critical technologies;

• Protecting sensitive information and data;

• Shielding Europe’s critical infrastructure.

Revision of FDI Screening Framework

On 11 December 2025, the Council and the European Parliament reached a provisional political agreement on the revision of the foreign direct investment (FDI) screening regulation. The updated framework aims to strengthen the EU’s ability to identify, assess and address risks posed by certain foreign investments. The minimum scope includes:

• Dual-use items and military equipment

• Hyper-critical technologies,

• Critical raw materials;

• Critical entities in energy, transport and digital infrastructure, based on a risk-based assessment;

• Electoral infrastructures;

• A limited list of financial system entities.

SAFE Instrument & Canada

On 19 December 2025, Member States endorsed a bilateral agreement with Canada under the ‘Security action for Europe’ (SAFE) regulation. Canada will be the first non-European country to participate in the SAFE instrument, the €150 billion defence instrument that supports those EU member states that wish to invest in defence industrial production through common procurement, focusing on priority capabilities.

The Podcast

This Month in EU Sanctions is also a podcast.. Catch up on recent episodes with:

• Celia Challet on the growing role of references for preliminary rulings in EU sanctions;

• dr Marcin Lukowski, CGSS on the Polish framework for sanctions implementation and enforcement;

• Ingrid Breit on the directive on definition of criminal offences and penalties for the violation of EU;

• Jan Lepeu on the history of EU sanctions;

• Jeff Nielsen and Gonzalo Saiz on the rise of ancillary listings in EU sanctions;

• Saskia Rietbroek, CSS on the evolution of the EU trade compliance community.

Tune in soon for the next episode. The podcast is available on all platforms.

Looking Ahead

• On 1 January 2026, Cyprus will begin its six-month Presidency of the Council

• Foreign Affairs Council, 29 January 2026

• Foreign Affairs Council, 23 February 2026

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On 12 December 2025, the Council of the European Union (“Council”) took decisive action. Relying on Article 122 of the Treaty on the Functioning of the EU (“TFEU” or “Treaty”), it adopted Council Regulation (EU) 2025/2600 on emergency measures addressing the serious economic difficulties caused by Russia’s actions in the context of the war of aggression against Ukraine (“Regulation 2025/2600”) targeting the assets of the Russian Central Bank (“RCB”) within EU jurisdiction.

Declaring an economic crisis arising out of Russia’s actions, the Council complemented existing sanctions against the RCB with a regulation that imposed transfer restrictions on RCB assets. The regulation temporarily prohibits

“[...] any direct or indirect transfer of assets or reserves of the Central Bank of Russia, or of any legal person, entity or body acting on behalf of, or at the direction of, the Central Bank of Russia, such as the Russian National Wealth Fund.”

By framing the consequences of Russia’s war as an economic crisis, the EU has established a temporary, durable and self-sustaining mechanism to reinforce its sanctions architecture while protecting core economic interests. This briefing explores the legal and policy implications of this landmark decision.

The Immobilisation of RCB Assets in the EU

On 28 February 2022, the Council adopted the third package of sanctions against Russia. That set of measures, adopted under Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (“Regulation 833/2014”), introduced a comprehensive ban on transactions related to the management of reserves as well as of assets of the RCB.

Approximately EUR 210 billion of RCB assets were immobilised in the EU. The primary aim of the measures adopted under Regulation 833/2014 was to prevent the RCB from accessing its substantial foreign reserves held in the EU. While Regulation 833/2014 effectively immobilised RCB assets by prohibiting transactions, it did not establish a general prohibition on asset transfers as such.

As the immobilised assets began to generate revenue (yielding around EUR 2.5-3 billion a year), the EU adopted instruments to use the proceeds of those assets to fund military and financial assistance to Ukraine. Recital 35 of Council Regulation (EU) 2024/1469 of 21 May 2024 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine noted:

“The restrictive measures linked to the prohibition of transactions related to the management of the assets and reserves of the Central Bank of Russia should remain in place until Russia ceases its war of aggression against Ukraine and compensates Ukraine for the damage caused by this war” (emphasis added).

This position was reiterated in subsequent European Council conclusions and reflected in secondary legislation, including the Ukraine Loan Cooperation Mechanism adopted on 24 October 2024. Thus, the RCB transaction ban is intended to remain in place for as long as the sanctions are in force, which requires periodic renewal by unanimous approval of the Member States.

What is Article 122 of the TFEU?

EU law does not foresee the possibility of formally declaring a state of emergency to suspend ordinary EU law-making procedures and take exceptional executive action. Instead, several treaty provisions allow the EU to respond to specific categories of emergencies.

Emergency Economic Powers

Article 122 TFEU, part of Title VIII on Economic and Monetary Policy, empowers the Council, acting on a proposal from the European Commission (“Commission”) and by qualified majority, to swiftly adopt measures appropriate to severe economic difficulties. Acts under Article 122 are non-legislative, temporary, and situational, distinguishing them from ordinary EU law and do not require the involvement of the European Parliament.

The Council enjoys broad discretion in determining what constitutes an economic situation requiring intervention. However, the Court of Justice of the EU (“CJEU”) has emphasised that Article 122 is intended for urgent, situational responses, which must be distinguished from permanent or structural solutions. In essence, Article 122 TFEU serves as a tool for temporary, targeted crisis management.

Article 122 TFEU in Practice

The origins of Article 122 TFEU trace back to the Treaty of Rome. The use of Article 122 TFEU, however, has expanded significantly in recent decades, reflecting its increasing importance as a tool for addressing exceptional circumstances. It has taken a prominent role because of multiple crises that the EU has faced, particularly over the last 15 years. Examples include:

• 2010 | Eurozone crisis — Council Regulation 407/2010 establishing the European Financial Stabilisation Mechanism;

• 2016 | Migration crisis — Council Regulation 2016/369 on the provision of emergency support within the Union;

• 2020 | COVID-19 crisis — emergency support and recovery instruments, including SURE (Council Regulation 2020/672) and NextGenerationEU (Council Regulation 2020/2094);

• 2022 | Russia-induced energy crisis — a series of emergency regulations addressing gas demand reduction, energy prices, joint gas purchasing, renewables deployment, and market correction mechanisms (Council Regulations 2022/1369, 2022/1854, 2022/2576–2578);

• 2022 | Russia-induced defence and security crisis — the SAFE instrument addressing the security and defence consequences of Russia’s war of aggression against Ukraine (Council Regulation 2025/1106).

Thus, even before the 12 December 2025 action, Article 122 TFEU was relied upon to counter the weaponization by Russia of energy supplies and the security threat (SAFE). Alongside sanctions which pursue Common Foreign and Security (“CFSP”) objectives, the EU turned to Article 122 of the TFEU to address the war’s systemic economic effects.

Economic Rationale for Regulation 2025/2600

On 3 December 2025, the Commission unveiled two proposals to support Ukraine’s financing needs in 2026-2027. As part of that initiative, the Commission proposed Regulation 2025/2600. The proposal frames Russia’s war as an existential economic threat, justifying the use of Article 122 TFEU on five main economic grounds.

1. Russia’s war of aggression against Ukraine has inflicted severe macroeconomic shocks across the EU. The conflict has resulted in 1.9% lower GDP growth (2022–2023) compared to pre-war projections, with bordering Member States experiencing an even sharper decline of 1.4–1.8% below the EU average. These economic disruptions stem from supply chain breakdowns, soaring energy and food prices, and a decline in investment and consumer spending, collectively undermining the EU’s economic stability and confidence.

2. The war has also placed unprecedented fiscal and market strain on the EU. Member States have spent over EUR 365 billion (2022–2024) to mitigate the economic and social fallout of high energy prices, while the EU has redirected significant budgetary resources away from long-term priorities. Hosting 4.3 million Ukrainian refugees has cost the EU ~0.2% of GDP annually, with total fiscal costs potentially exceeding EUR 155 billion (2022–2025). Defence spending has surged from 1.5% to a projected 2.0% of GDP by 2027 (EUR 405 billion), further diverting funds from critical areas like infrastructure, education, and social programs. Meanwhile, Russia’s seizure of EU-owned assets, capital restrictions, and retaliatory taxes have distorted investments and markets, increasing risks and economic uncertainty.

3. The conflict has further disrupted energy and commodity markets, creating additional layers of economic instability. Russia’s invasion spiked global oil, gas, and food prices, disrupting EU supply chains and raising production costs for industries reliant on Ukrainian exports, such as cereals and vegetable oils. The EU’s REPowerEU initiative, aimed at accelerating the green transition and reducing energy dependence, required EUR 20 billion in additional funding. Simultaneously, shortages of metals and raw materials—exacerbated by the war and Russian retaliatory measures—have increased costs for EU industries, deepening the economic toll of the conflict.

4. Beyond direct economic damage, Russia’s hybrid warfare tactics—including sabotage, cyber-attacks, disinformation campaigns, and airspace violations—have destabilised EU economies. These actions have been documented in Belgium, the Netherlands, Poland, Romania, Denmark, Estonia, Germany, Lithuania, and Latvia, creating prolonged economic uncertainty and increasing fiscal burdens. The persistent threat of hybrid attacks not only heightens instability but also risks prolonging the war’s financial and humanitarian consequences for the EU.

5. A Ukrainian defeat could trigger further economic and security challenges for the EU. Such an outcome would likely lead to additional GDP losses, particularly in bordering Member States, alongside increased refugee flows and higher defence spending. This scenario would deepen the EU’s economic and security challenges, exacerbating the already significant fiscal and humanitarian burdens imposed by the conflict.

The proposal then underscored that the urgency and justifications for invoking Article 122 TFEU stem from the exceptional, external nature of the crisis, which lies beyond Member States’ control.

Regulation 2025/2600

Objectives

Regulation 2025/2600 leverages economic emergency powers to achieve sanctions-like effects against the RCB. By characterising the conflict as an economic emergency, the EU justified the adoption of urgent, Union-wide measures to mitigate the war’s far-reaching consequences for the EU’s economic stability. The regulation’s recitals explicitly underscore this rationale, stating that

“[…] given the proximity of the Union to Russia’s war and Russia’s actions against the Union, the Union’s economy has been affected and is expected to continue to be affected as long as Russia persists in its war of aggression” (emphasis added).

Moreover, Regulation 2025/2600 warns that the EU’s economic situation would deteriorate even further should the conflict in Ukraine escalate, reinforcing the need for decisive action.

The Article 122 TFEU measures are “without prejudice” to the sanctions adopted under Regulation 833/2014 (Regulation 833/2014 does not include a prohibition on RCB asset transfer). While complementary in effect, these two regulations rest on separate legal bases and address distinct, albeit overlapping dimensions of the same crisis.

Regulation 2025/2600 ensures that the immobilisation of assets is maintained as long as Russia’s actions pose substantial risks to the EU’s economic stability.

Provisions

At its core, the regulation introduces two principal measures.

• First, it prohibits any direct or indirect transfer of assets or reserves held by the RCB or related entities, such as the Russian National Wealth Fund. This comprehensive ban ensures that immobilised assets cannot be repatriated to Russia or used to finance its war machine or hybrid attacks against the EU.

• Second, it mandates that cash balances generated by these immobilised assets be managed separately, potentially directing them to a Reparations Loan or other special purpose.

This approach allows the EU to provide critical financial aid to Ukraine while preserving its own economic stability.

Temporary but Condition-based

Regulation 2025/2600 establishes a temporary but condition-based framework. Recital 26 notes:

“[t]he prohibition on transfers of the assets and reserves of the Central Bank of Russia or related entities is temporary, reversible and under periodic review” (emphasis added).

Its duration is explicitly tied to three conditions, as outlined in Article 6(2). The measures will remain in force until the following three conditions are met.

1. Russia ceases its war of aggression against Ukraine (Article 6(2)(a)).

2. Russia provides reparations to Ukraine to the extent necessary for reconstruction, without adverse economic or financial consequences for the EU (Article 6(2)(b)); and

3. Russia’s actions no longer pose a serious risk of severe economic difficulties to the Union and its Member States (Article 6(2)(c)).

Regulation 2025/2600 embeds a built-in review mechanism to ensure continued proportionality and adequacy. By 31 December 2026, and annually thereafter, the Commission is required to review the operation of the Regulation 2025/2600 and report its main findings to the Council.

This review must specifically assesses whether the continued availability of significant financial resources to Russia would still pose, or risk posing, serious economic difficulties for the EU and its Member States, and whether the threat of further deterioration of the EU’s economic situation persists. This periodic reassessment reinforces the temporary, condition-based nature of the measures and anchors their continuation in an ongoing evaluation of economic risk.

Policy Implications

The 12 December 2025 action has at least three immediate policy consequences:

1. Asset control and leverage: Regulation 2025/2600 preserves EU jurisdiction over immobilised Russian assets for potential reparations or aid to Ukraine.

2. Signalling effects: The action demonstrates commitment to Ukraine, signals long-term EU resolve to Russia, and affirms EU authority to external partners, beginning with the United States.

3. Institutional precedent: The decision confirms Article 122 TFEU as a viable tool for addressing security threats with severe economic consequences.

However, the use of Article 122 TFEU in this context may face legal challenges from Member States or stakeholders concerned about the expansion of EU competences. Critics could argue that this broad application risks undermining the distinction between economic policy and foreign affairs or that Regulation 2025/2600 avoids CFSP unanimity requirements.

Conclusion

The objectives pursued by Regulation 2025/2600 are narrowly tailored to the urgent protection of the EU’s economic stability from the consequences of Russia’s territorial conflict, high-intensity warfare, and hybrid attacks.

This is not the first time the EU has relied on economic instruments to advance foreign policy objectives. In response to Russia’s war of aggression, the EU has also adopted, by qualified majority, increased tariffs on certain Russian and Belarusian goods. These trade measures aim to reduce strategic dependencies and constrain the war economy of Russia and of third countries involved in the aggression against Ukraine, illustrating the growing role of trade law as a dimension of external action.

What sets Regulation 2025/2600 apart is its measured and condition-based use of economic emergency powers under Article 122 TFEU to respond to a foreign security threat. By complementing existing CFSP sanctions, Regulation 2025/2600 introduces a temporary yet self-sustaining mechanism. Its duration is legally contingent on clear conditions—namely, the cessation of Russia’s aggression, the provision of reparations, and the elimination of economic risks to the EU—ensuring that the response remains proportionate, targeted, and reversible.

This innovation is not without risks. The expanded use of economic emergency powers inevitably raises questions about institutional balance and the boundaries between economic governance and foreign policy. The European Parliament has challenged the choice of Article 122 TFEU as the legal basis for the SAFE Regulation before the CJEU, and some Member States may decide to pursue similar challenges.

In a context characterised by overlapping economic, security, and hybrid threats, the urgency and exceptional nature of the crisis provide a compelling justification for this measured and condition-based temporary use of Article 122 TFEU. Regulation 2025/2600 thus reflects an EU adapting its legal toolkit to contemporary conflict while remaining anchored in Treaty constraints.

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EU Responses to the U.S.-led Peace Initiative

As November 2025 drew to a close, the U.S.-led initiative to negotiate an end to the war in Ukraine dominated international headlines. In this context, a key question arose for policymakers, businesses, and compliance professionals: What does the EU’s response to the proposed plan mean for the future of EU sanctions against Russia?

Following the informal EU Leaders’ meeting of 24 November 2025 in Luanda, European Council President António Costa noted:

It is also clear that the issues that concern directly the EU, such as sanctions, enlargement or immobilised assets, require the full involvement and decision by the EU.

In a speech during the European Parliament plenary debate on the EU position on the proposed plan and EU engagement towards a just and lasting peace for Ukraine on 26 November 2026, Ursula von der Leyen stressed:

This is why Europe must keep up the pressure on Russia – until there is a just and lasting peace.

In a similar vein, following the informal 26 November 2026 Foreign Affairs Council, HR VP Kaja Kallas emphasized that:

To secure the best outcome for Ukraine and Europe, we have to stay the course but pick up the pace. This means more sanctions to deprive Russia of the means to fight and more military and financial support to Ukraine.

A possible 20th package of EU sanctions against Russia is reportedly already under preparation and could be presented in the coming weeks.

Other Recent EU Sanctions Developments

Russia

On 20 November 2025, the Council of the European Union (”Council”) imposed sanctions on an additional ten individuals under the EU’s Russia human rights sanctions regime.

The Council adopted a comprehensive 19th package of EU sanctions on 23 October 2025. European Council conclusions, issued the same day, noted:

The European Union is determined to maintain and increase its pressure on Russia to stop its brutal war of aggression, including through further sanctions. In this context, the European Council welcomes the adoption of the 19th package of sanctions. The European Council also underlines the importance of further coordination with G7 partners on sanctions, and of reinforcing the anti-circumvention measures.

On 3 October 2025, the Council extended its measures against those responsible for Russia’s destabilising actions abroad by one year, until 9 October 2026, in light of Russia’s continued hybrid activities, including Foreign Information Manipulation and Interference (FIMI) against the EU and its member states and partners.

Moldova

On 27 October 2025, the Council extended the sanctions regime targeting the leadership of the Transnistrian region of the Republic of Moldova, for another year, until October 31, 2026.

ISIL/Da’esh and Al-Qaeda

On 27 October 2025, the Council renewed the autonomous EU sanctions against ISIL/Da’esh and Al-Qaeda and persons, groups, undertakings and entities associated with them, extending their duration for a further year, until 31 October 2026.

Belarus

On 29 October 2025, the High Representative issued a statement on behalf of the EU on Belarus’ hybrid actions at the EU external border. It noted, in relevant parts:

Sanctions on the Belarusian regime have been imposed, and the EU is prepared to take further appropriate measures should such actions continue. We will not tolerate any hybrid campaigns directed against the EU or any of its member states.

Chemical Weapons

On 13 October 2025, the Council decided to prolong the application of individual restrictive measures against the proliferation and use of chemical weapons by another year, until 16 October 2026.

Niger

On 17 October 2025, le Council extended the sanctions in view of the situation in Niger by another year, until 24 October 2026.

Compliance Guidance

In October and November 2025, the European Commission (the “Commission”) published FAQs regrading:

• Article 3ra (Import ban on liquified natural gas (LNG))

• Article 5ae (Infrastructure transaction ban)

• Article 5aa State-owned enterprises

• Article 3ma (Import ban on refined products obtained from Russian crude oil)

• Articles 3m and 3n (Oil imports)

• Articles 2, 2a and 2b (Export-related restrictions for dual-use goods and advanced technologies)

Dual-Use Export Controls

On 14 November 2025, the Commission published the 2025 update of the EU control List of dual-use items. The Commission had adopted Delegation Regulation 2025/2003 amending Regulation (EU) 2021/821 on 8 September 2025. The updates concerns:

• Quantum technology: Quantum computers, electronic components designed to work at cryogenic temperatures, parametric signal amplifiers, cryogenic cooling systems, cryogenic wafer probers.

• Semiconductor manufacturing and testing equipment and materials: Atomic Layer Deposition equipment, equipment and materials for epitaxial deposition, lithography equipment, Extreme Ultra-Violet pellicles, masks and reticles, Scanning Electron Microscope equipment, etching equipment.

• High-performance Integrated Circuits: Advanced computing integrated circuits such as field programmable logic devices (FPLD).

• High-Temperature Coatings: materials for extreme thermal environments.

• Additive manufacturing: 3D printing systems for metals and associated materials (e.g., high entropy alloy or refractory metal and alloy powders).

• Peptide synthesizers: equipment used in biotechnology for the synthesis of peptides.

• Modification of certain control parameters and update of certain technical definitions and descriptions.

The updated regulation entered into force on 15 November 2025. On 14 November 2025, the Commission hosted its 2025 Export Control Forum in Brussels. Watch the event here. On 17 October 2025, the European Parliament published a briefing on dual-use export controls.

Select Developments in EU Courts

EU courts rendered several judgements in matters related to EU sanctions. Of particular interest in the de-listing context is the Judgement of the General Court of 26 November 2025 in SBK Art OOO v Council of the European Union.

In Case C-538/25, Flugzeugherstellerin, the Austrian Federal Administrative Court submitted to two questions related to dual-use export controls.

1 ) What circumstances are to be taken into account when assessing whether an item can be used also ‘for … military purposes’ in accordance with point 1 of Article 2 of Regulation (EU) 2021/821.

2. Does Article 207 TFEU, read in conjunction with Article 10 of Regulation (EU) 2015/479 of the European Parliament and of the Council of 11 March 2015 on common rules for exports, or any other provision of EU law permit the application of a national legal provision for the purpose of examining and, as the case may be, prohibiting the export of an item to a third country on the ground of human rights considerations, regardless of whether the item concerned is a dual-use item in accordance with point 1 of Article 2 of Regulation (EU) 2021/821?

The request was filed in August but published in the 17 November 2025 edition of the Official Journal.

Looking Ahead

• 15 December 2025 – Foreign Affairs Council

• 18-19 December 2025 – European Council

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