On 23 July 2026, the Council of the European Union adopted the 21st sanctions package against Russia; the measures were published in the Official Journal on the same day and entered into force on 24 July 2026. With 48 newly listed natural persons and 168 organisations (plus two further listings under the Belarus regime), this is the most extensive expansion of the sanctions lists in the past four years. At the same time, unusually for a sanctions package, it also contains a number of narrowly targeted relaxations. We put both into context for you below.
I. Political background
EU sanctions decisions against Russia are adopted by way of Council common provisions (Article 29 TEU) and are subsequently implemented through regulations under Article 215 TFEU. Both types of legal act require unanimity among the 27 member states. This requirement has repeatedly proven, in past sanctions rounds, to give individual member states negotiating leverage, with their consent made conditional on exemptions for national economic interests, most visibly in the case of the 20th sanctions package, whose adoption was delayed by several weeks due to a blockade by Hungary. The Commission had already tabled its proposal for the 21st package in early June 2026; around seven weeks passed before final agreement was reached on 23 July 2026. Also falling within this negotiating period was the listing round of 15 June 2026, which is separate from, and outside, the 21st package and should not be confused with it.
II. Overview of the tightening measures
Legally, the package was implemented through several regulations affecting both the Russia and the Belarus regimes:
- Regulation (EU) 2026/1848 amends the central sectoral regulation, Regulation (EU) No 833/2014, and forms the economic core of the package:
- Extension of the transaction prohibitions under Article 5h(1) and Article 5ac(1) of Regulation (EU) No 833/2014 to 33 further Russian banks as well as four non-Russian banks (Annexes XIV and XLV), on account of their involvement in sanctions circumvention, effective from 13 August 2026.
- A new transaction prohibition against 14 crypto-asset service providers listed in Annex LVII, under Article 5bc of Regulation (EU) No 833/2014.
- Extension of the ownership and management prohibition under Article 5b(2a) of Regulation (EU) No 833/2014: from 25 August 2026, it will cover all crypto-asset services within the meaning of Regulation (EU) 2023/1114, and no longer only wallet, account, and custody services.
- Suspension of the automatic adjustment of the oil price cap until 15 July 2027, meaning the cap will remain unchanged despite rising market prices.
- Extension of the shadow-fleet rules to support services (including bunkering), together with the new listing of 41 tankers; transaction prohibitions in respect of two Russian ports, four airports, and refineries processing Russian crude oil.
- Reporting obligations and contractual safeguard obligations for the sale of LNG tankers (CN code ex 8901 20) under Article 3qa of Regulation (EU) No 833/2014, together with a prohibition on LNG terminal services under Article 3rb of Regulation (EU) No 833/2014, applicable from 1 January 2027.
- New export prohibitions covering, among other things, certain nickel and beryllium products, specialty films for aerospace applications, and drone and missile components; tightened export controls in respect of 51 further companies in third countries, including China, India, Turkey, Kazakhstan, Kyrgyzstan, and the UAE. New import prohibitions cover certain metal and ore products, glassware, and motor vehicle parts.
- Implementing Regulation (EU) 2026/1843 adds 48 natural persons and 168 organisations to Annex I to Regulation (EU) No 269/2014; for these listed persons and entities, the freezing of all assets located in the EU (Article 2(1) of Regulation (EU) No 269/2014) and the prohibition on making funds available (Article 2(2) of Regulation (EU) No 269/2014) apply. Those covered include, among others, 94 banks and financial institutions, actors within the military-industrial complex, participants in the drone supply chain, players in the oil and raw materials sector, and entities connected to the shadow fleet.
- Regulation (EU) 2026/1846 transposes key elements of the Russia sanctions onto the Belarus regime (by amending Regulation (EC) No 765/2006) and is intended to prevent circumvention transactions routed via Belarus; Implementing Regulation (EU) 2026/1817 additionally lists two further legal persons under Article 8a(1) of Regulation (EC) No 765/2006.
III. Targeted relaxations, and their reasons
Alongside the tightening measures, the package also contains, via Regulation (EU) 2026/1844 (amending Regulation (EU) No 269/2014), several narrowly limited relaxations:
- A new exemption for the Paks II power plant project: under the newly inserted Article 6h(1) of Regulation (EU) No 269/2014, Article 2 of that Regulation does not apply to the funds and economic resources of the listed organisations UK UZTM Kartex LLC, Uralmashplant JSC, and P.G. Korobkov IZ-Kartex LLC, to the extent this is strictly necessary for safety-related activities in connection with the Hungarian Paks II nuclear power plant project; under Article 6h(2) of Regulation (EU) No 269/2014, this is subject to a two-week notification requirement to the competent Hungarian authority.
- Further narrowly drawn exemptions from the asset freezes for certain insurance services and for necessary rail traffic between Russia and the EU.
- A new authorisation option: under Article 6b(5ea) of Regulation (EU) No 269/2014, the competent authorities of the member states may, by way of derogation from Article 2 of that Regulation, authorise the release or provision of certain frozen funds or economic resources, subject to conditions they consider appropriate.
- Extended divestment deadlines: under the amended Article 11(4), Article 5aa(3), and Article 12b of Regulation (EU) No 833/2014, the competent authorities may now authorise, until 31 December 2027, transactions that are strictly necessary for the orderly divestment of investments from Russia.
- A transitional arrangement for existing business: the new Article 5ac(8) of Regulation (EU) No 833/2014 contains, mirroring Article 5h(3) of that Regulation, an exemption governing the orderly wind-down period for contracts with newly listed institutions.
These relaxations should not be read as a political shift in course; rather, they are, for the most part, functional in nature. The extended divestment deadlines and the transitional arrangement under Article 5ac(8) of Regulation (EU) No 833/2014 are technical wind-down clauses of the kind included in almost every extension of transaction prohibitions, intended to allow EU companies to wind down ongoing business in a legally secure manner. The Paks II exemption, by contrast, fits the pattern already observed with the 20th sanctions package, where individual member states, in that case primarily Hungary, with regard to Russian oil supplies, made their required consent under Article 29 TEU and Article 215 TFEU conditional on specific concessions. We have no official confirmation, beyond the text of the regulations themselves, of corresponding negotiations in connection with the 21st package, and we would therefore characterise this as our own assessment rather than an established fact.
IV. Practical note
For companies with a Russia or Belarus connection, the 21st package means, above all, a further increase in the level of due diligence required with regard to business partners, banks, transport routes, and end users, particularly in light of the newly named third-country actors. Companies still in the process of winding down Russia-related investments should keep an eye on the extended deadlines under Article 11(4), Article 5aa(3), and Article 12b of Regulation (EU) No 833/2014, and should apply for the necessary authorisations from the competent authorities in good time.
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