Introduction
On 24th February 2025, the EU adopted the 16th package of sanctions against Russia on the third anniversary of the Russian invasion of Ukraine. This sanctions package targets key sectors of the Russian economy which include trade, transport, energy, infrastructure and financial services. It also includes additional measures targeting the “shadow fleet” and sanctions circumvention.
The most significant measures are summarised below.
Listings and Anti-Circumvention Measures
The 16th package includes eighty-three additional sanctioned persons, including forty-eight individuals and thirty-five entities, such as those supporting the Russian military complex, active in sanctions circumvention, Russian crypto asset exchanges and in the maritime sector. The 16th package also adds another new criterion for listing individuals and entities that are part of Russia’s military and industrial complex, support it or benefit from it.
The 16th package also targets seventy-four additional vessels, bringing the total number of listed vessels to 153. These vessels are part of the “shadow fleet” or contributed to Russia’s energy revenues. The measures add a further listing criterion, targeting those who support the operations of unsafe oil tankers. The package also imposes targeted export restrictions on fifty-three new companies supporting Russia’s military-industrial complex or engaged in sanctions circumvention. This includes thirty-four companies in countries other than Russia.
Ports
Article 5ae of EU Regulation 833/2014 now includes a full transaction ban on the seaports of Ust-Luga and Primorsk on the Baltic Sea, Novorossiysk on the Black Sea, the Volga port Astrakhan and Makhachkala port on the
Caspian Sea. This will prohibit vessels from loading or unloading goods at these ports.
This prohibition is subject to the following exceptions:
(a) in the case of a vessel in need of assistance seeking a place of refuge, of an emergency port call for reasons of maritime safety, or for saving life at sea, or for humanitarian purposes, or for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment, or as a response to natural disasters;
(b) to transactions which are strictly necessary for the direct or indirect purchase, import or transport of natural gas, titanium, aluminium, copper, nickel, palladium and iron ore from or through Russia into the Union, a country member of the European Economic Area, Switzerland, or the Western Balkans;
(c) unless prohibited under Article 3m or 3n, to transactions which are strictly necessary for the direct or indirect purchase, import or transport of oil, including refined petroleum products, from or through Russia;
(d) to transactions which are necessary for the purchase, import or transport of pharmaceutical, medical, agricultural and food products, including wheat and fertilisers whose import, purchase and transport is allowed under this Regulation;
(e) to transactions for the purchase, import or transfer of seaborne crude oil and of petroleum products listed in Annex XXV where those goods originate in a third country and are only being loaded in, departing from or transiting through Russia, provided that both the origin and the owner of those goods are non-Russian.
(f) to transactions necessary for the establishment, operation, maintenance, fuel supply and retreatment and safety of civil nuclear capabilities, and the continuation of design, construction and commissioning required for the completion of civil nuclear facilities.
Members will note that exceptions (b), (c) and (e) listed above relate to the export of goods from Russia and do not refer to supply to Russia. Annex XXV includes CN Code 2709 and 2710 oil products excluding natural gas condensates of subheading 2709 00 10 from liquefied natural gas production plants.
On 20th March 2025, the EU published FAQs on the infrastructure transaction ban introduced in Article 5ae. Particular points to note include:
· the infrastructure ban applies to all goods carried from or to these ports unless an exemption applies – the exemptions only extend to those goods that are specifically mentioned in paragraph 3 of Article 5ae and the non-binding EU guidance states specifically that the effect of this is that while “EU operators are allowed to transport Russian coal to a third country to secure global energy security … Nevertheless, EU operators cannot engage in transactions with the listed ports and must divert to a non-listed port for this purpose.”; and
· these sanctions do not apply extraterritorially – in essence, non-EU operators can engage in transactions with the listed ports; and
· EU operators can continue to provide services to non-EU vessels operating with no EU nexus which have called at a prohibited port.
Trade Measures
The 16th package introduces a ban on EU imports of primary aluminium from Russia – to ensure that there is a smooth transition for businesses, a quota mechanism is introduced, allowing 275,000 tons, which equates to 80% of EU imports in 2024, to be used over a 12-month period. Contracts for primary aluminium which are concluded before 25 February 2025 (or ancillary contracts necessary for the execution of such contracts) will be granted an exemption for the importation into the EU of up to 50,000 metric tons from 26 February 2026 until 31 December 2026. Members are reminded that it is prohibited under UK sanctions to transport aluminium from Russia to a third country and are therefore strongly advised to satisfy themselves that such carriage and the provision of insurance for such trades by the Clubs are permissible.
The sanctions package has expanded dual-use export restrictions in order to restrict Russia’s access to key technologies. The new items are: (a) chemical precursors for making chloropicrin and other riot control agents used by Russia as chemical weapons; (b) software for Computer Numerical Control (CNC) machine tools used to produce weapons and video game controllers which are used by Russia to operate drones on the battlefield and (c) chromium ores and compounds due to their military application.
Energy
The EU completely prohibits temporary storage or the placement under free zone procedures of Russian crude oil or petroleum products in EU ports, which was until now allowed, if the oil complied with the price cap and went to a third country. The package extends the prohibition to provide goods, technology and services for the completion of Russian LNG projects to also apply to crude oil projects in Russia, such as the Vostok oil project. The
package extends the existing software ban to restrict the export, supply or provision of oil and gas exploration software to Russia.
Financial Sector
The EU has listed thirteen financial institutions to the list of entities subject to the prohibition to provide specialised financial messaging services. The EU has added three banks to the transaction ban due to their use of the Financial Messaging System of the Central Bank of Russia system to circumvent EU sanctions. These is an extension of the transaction ban to enable the EU to list financial institutions and crypto asset providers that participate in the circumvention of the oil price cap and facilitate transactions with listed vessels of the shadow fleet.
UK
On 24th February 2025, marking the third anniversary of the invasion of Ukraine, the UK has imposed over one hundred new sanctions targeting:
· Producers and suppliers of machine tools, electronics, and dual-use goods for Russia’s military, including microprocessors used in weapons systems, based in a range of third countries including Central Asian states, Türkiye, Thailand, India and China;
· North Korean Defence Minister and other North Korean generals and senior officials complicit in deploying DPRK forces to Russia;
· 13 Russian targets, including LLC Grant-Trade and its owners, who have used the company to funnel advanced European technology into Russia to support its illegal war; and
· 40 “shadow fleet” ships carrying Russian oil, bringing the total number of oil tankers sanctioned by the UK to 133.
Trade involving Russia is subject to significant and complex legal restrictions.
Members are reminded that cover is not available for any trade that breaches applicable sanctions.
Finally, Members are further reminded that they should conduct thorough due diligence (and keep records of their investigations and findings) through the trade on the parties, cargoes, vessels and other service providers that are or may be involved before they engage in any trade with a high sanctions risk and to seek further independent legal advice if they are unsure or require further clarification.
Yours faithfully,
The Board of Directors
Maritime Mutual Insurance Association (NZ) Limited
