EU adopted 18th package of sanctions targeting Russia’s war machine - energy and financial sectors

Today, 18 July, the Council of the European Union (EU) adopted the 18th package of economic and individual sanctions aimed at limiting the activities of Russia's critical oil and financial sectors and further comprehensively restricting the regime's ability to continue its aggression against Ukraine.

"Russia's objectives remain unchanged. The entire European security architecture is at stake. There is no sign that Russia is about to stop, so the EU must take the lead in continuing to increase pressure on Russia. The 18th sanctions package targets the Kremlin's key sources of revenue, and we must continue moving in this direction, starting discussions on the 19th sanctions package without delay," said Kęstutis Budrys, the head of Lithuanian diplomacy.

The Council is lowering the price cap for Russian crude oil and introducing a dynamic mechanism to review the price. With its decision the Council aims to ensure that the sale price of oil would only cover the cost of production and that Russia's oil export revenues would plunge even further.

The EU also decided to prohibit both direct and indirect transactions related to the Nord Stream and Nord Stream 2 natural gas pipelines. Russia has repeatedly unilaterally disrupted the supply of natural gas through the Nord Stream pipeline and completely cut off supplies at the end of August 2022, to exert pressure on the EU as a whole and on its member states and weaken their support for Ukraine. The transaction ban imposed by the Council will prevent the supply of natural gas through these pipelines, completely restricting Russia's ability to generate additional revenue from gas exports and use it to finance its aggression against Ukraine.

The new sanctions package expands the ban on providing specialized financial messaging services to certain Russian credit and financial institutions, as well as other entities that have subscribed to financial messaging services, or subsidiaries of credit or financial institutions from third countries operating in Russia. Under the Council Decision, an additional 22 Russian credit and financial institutions and other entities are added to the list of legal persons, entities, or organizations subject to this transaction ban.

Furthermore, to prevent further development of Russia's financial sector, the Council has introduced a ban on providing software for specific banking and financial sector applications.

To close loopholes that may be used to circumvent sanctions, the 18th sanctions package allows member states' competent authorities to require prior authorisation for the export of items listed in Annex VII to Regulation (EU) No 833/2014 to any third country if there is a suspicion that they may have a final destination in Russia or be destined for the final use by Russian entities.

The 18th package of sanctions adopted today also sanctioned an additional 105 shadow fleet tankers and imposed additional restrictions on goods that could help strengthen Russia's military and improve technology capabilities or develop its defence and security sector. The list of these restrictions includes goods used by Russia in its war of aggression against Ukraine that contribute to the production of military systems, including additional computer numerical control (CNC) machines and chemical components for propellants.

The new sanctions package includes restrictive measures targeting an additional 55 individuals and entities responsible for actions undermining Ukraine's territorial integrity, sovereignty, and independence.

The Council today also adopted new sanctions against Belarus, which are comparable to the restrictions imposed on Russia under the 18th package of sanctions. In addition, a ban on the import of arms from Belarus into the European Union was introduced, as well as individual restrictive measures against eight legal entities belonging to the Belarusian military and industrial complex.