EU and U.S. further develop their sanctions regimes

The United States and the European Union continue to impose sanctions on Russia due to its invasion of Ukraine. However, their sanctions regimes differ and are constantly evolving as the war drags on.

U.S. moves to expand its means of sanctioning Russia and its allies

The United States began sanctioning Russia over its aggression against Ukraine in March 2014, after Russia’s annexation of the Ukrainian peninsula Crimea. The sanctions were expanded in 2022, following Russia’s full-scale invasion of Ukraine.

Now, a bill is being debated in Congress that would further expand the range of countries and persons subject to U.S. sanctions. The bill targets Russian officials and Russia’s revenue sources used to finance the war against Ukraine, namely the country’s energy sector, the shadow fleet, and financial institutions. It would expand the legal basis for sanctions, and add to the executive’s ability to tariff Russia and its allies. Moreover, it would regulate when and how sanctions may be terminated.

Through the bill, Congress would give President Trump the authority to impose tariffs on countries that purchase Russian oil or natural gas or help Russia evade sanctions. The bill explicitly permits sanctioning the top-importers of Russian oil and gas and countries that continue to buy Russian energy resources without having made efforts to reduce their imports. Thus, the bill would be a strong legal basis for tariffs on all imports e. g. from China, India and Turkey as they continue to be among the five largest importers of Russian oil and gas.

The legislation would permit the president to terminate the sanctions only after certifying to Congress that Russia had signed a peace agreement accepted by Ukraine's free and independent government and had ceased military hostilities and activities aimed at overthrowing, dismantling, or subverting the Ukrainian government.

The bill has been approved by the Senate and has been introduced in the House of Representatives which may consider it once it returns from recess.

European package of sanctions builds on previous efforts

While U.S. policymakers have been discussing whether to expand the president’s authority to impose sanctions on Russia and its allies, the European Union adopted its 21st package of sanctions against Russia . The package, approved on July 23, targets the Russian banking system, international cryptocurrency networks, oil traders, the so-called Russian shadow fleet, and Russian energy revenues. It includes 218 newly listed individuals and entities, bringing the number of all to nearly 3,000. The assets of the listed natural and legal persons are subject to an asset freeze. Providing economic resources to listed persons and entities is prohibited.

41 additional shadow-fleet ships were sanctioned, bringing the total up to more than 670 vessels. These vessels are banned from accessing EU ports and EU operators are prohibited from providing maritime services to them. A new legal basis enables EU countries to confiscate and sell cargo carried by detained shadow-fleet vessels.

Moreover, the EU imposed transaction bans on various Russian banks, cutting them off from the SWIFT payment system, as well as on international oil traders and third-country crypto operators that help Russia evade EU sanctions.

More than 50 entities linked to Russia’s military-industrial complex face stricter EU export restrictions on dual-use items and advanced technologies. Some of those entities are located in third countries such as China, India, and Turkey.

New bans prohibit the export of specialty metals and alloys such as nickel powder to Russia as well as the import of various ores, oxides, and metals from Russia.