Welcome to our monthly Sanctions Essentials update, where we track the most important developments in EU, UK, and international sanctions regimes. This edition highlights a continued escalation in enforcement and policy measures targeting Russia-related circumvention networks, hybrid threats, and third-country facilitators, alongside expanded guidance from UK authorities on export controls and due diligence expectations.
We also cover key updates on EU listings across multiple regimes, including cyber, Myanmar, and hybrid threat sanctions, as well as important clarifications on payment services restrictions and compliance perimeter risks.
Stay informed, stay compliant, and ensure your sanctions frameworks are aligned with rapidly evolving regulatory expectations.
We wish you a good read!
EU expands Russia’s hybrid threats sanctions list: asset freezes imposed on disinformation-linked entities Euromore and Pravfond
Newly listed entities
- Euromore: Pro-Kremlin media platform engaged in amplifying and disseminating disinformation targeting EU audiences, including narratives legitimising Russia’s war against Ukraine and undermining EU institutions.
- Pravfond (Foundation for the Support and Protection of the Rights of Compatriots Living Abroad): Russian state-founded and state-funded organisation producing legal and analytical content reinforcing Kremlin narratives, including claims of “nazification” and “Russophobia” in Ukraine.
Sanctions regime
- Designations made under the EU regime targeting Russia’s hybrid threats and foreign information manipulation and interference (FIMI).
- Both entities are subject to:
– asset freeze,
– prohibition on making funds or economic resources available (directly or indirectly).
Regime scope update
Total listings under the regime: 69 individuals and 19 entities.
Key implication
The measures reinforce the EU’s expanding use of financial sanctions tools against information operations and propaganda infrastructure, treating disinformation networks as part of hybrid threat activity subject to restrictive financial controls.
EU-based firms and financial institutions should screen their counterparties and transaction flows against the updated sanctions list.
Contact the Ecovis team for support on sanctions compliance screening and risk exposure assessment.
EU adopts 20th sanctions package against Russia: expanded financial, crypto, energy, trade and cyber restrictions targeting circumvention networks, shadow fleet and third-country facilitators (phased implementation through 2027)
On 23 April 2026, the EU adopted its most comprehensive sanctions package to date against Russia, significantly broadening both asset freeze listings and sectoral restrictive measures. The package also mirrors key measures under the Belarus sanctions regime.
1. Listing measures
• 37 individuals and 80 entities added to sanctions lists (largest expansion in two years).
• Total shadow fleet designations increased to 632 vessels (additional 46 listings).
2. Financial sector restrictions
• Transaction ban on 20 Russian banks (effective 14 May 2026).
• Extension of bans to third-country financial intermediaries facilitating circumvention (netting/settlement services).
• Extension of SPFS-related restrictions to Yelo Bank (Azerbaijan).
• General prohibition on netting transactions involving Russian agents.
• “Mirror or successor entity” clauses to prevent sanctions circumvention via restructuring.
3. Crypto-asset measures
• Ban on EU services to Russia-established crypto-asset service providers (effective 24 May 2026).
• Prohibition on transactions involving A7A5, RUBx, and the Digital Rouble.
• Ban on EU involvement in development or support of these digital assets.
• Designation of a Kyrgyz trading platform linked to A7A5.
4. Energy and maritime restrictions
• Mandatory due diligence and contractual anti-re-export clauses for tanker sales.
• Services ban for Russian-flagged or Russian-managed LNG tankers and ice-breakers (from 25 April 2026).
• Extension to non-Russian vessels operating in Russia (from 1 January 2027).
• LNG terminal services ban (from 1 January 2027).
• Transaction bans on key ports (Murmansk, Tuapse, Karimun).
• Framework for future G7-aligned maritime services restrictions.
5. Trade and anti-circumvention
• 60 entities added to Annex IV (including China, Hong Kong, Turkey, UAE).
• New export/import restrictions (lab equipment, lubricants, energetic materials, metals, rubber products).
• Activation of Article 12f anti-circumvention tool: export bans on specified machinery and data transmission goods to Kyrgyzstan.
• Enhanced diamond traceability requirements.
• Ban on natural gas condensate imports from 1 January 2027.
6. Cybersecurity and services
• Expansion of professional services ban to include managed security services (penetration testing, incident response, security audits) for Russian state-linked entities (effective 25 May 2026).
7. Additional frameworks
• New sanctioning bases introduced for:
– beneficiaries of Russian countermeasures,
– enforcers of Russian court judgments against EU operators,
– unlawful users of EU intellectual property rights.
• EU anti-suit protection measures introduced against retaliatory Russian litigation.
8. Belarus alignment
Parallel sanctions framework extended until 28 February 2027, mirroring key Russia-related measures.
Key takeaway
This package marks a structural escalation in EU sanctions policy, shifting from entity-based restrictions to system-level disruption of circumvention networks, particularly in financial intermediation, crypto infrastructure, maritime logistics, and third-country trade facilitation, with phased implementation extending into 2027.
This package has direct and immediate implications for any EU firm providing crypto asset services, financial messaging, or trade finance with Russian or Belarusian exposure. Firms should urgently audit their crypto asset platforms and service relationships for compliance with the new sectoral ban and transaction prohibitions.
Contact the Ecovis team for a comprehensive legal review of exposure under the 20th sanctions package, particularly regarding crypto asset services, stablecoin trading, and digital ruble-related activities.
EU extends Myanmar sanctions regime until 30 April 2027 amid continued democratic backsliding and human rights concerns following 2021 coup
The Council of the EU has prolonged its restrictive measures against Myanmar for an additional 12 months, following its annual review of the situation in the country and citing ongoing deterioration of human rights and continued undermining of democratic governance after the February 2021 military coup.
Key measures and scope:
- Sanctions regime extended until 30 April 2027.
- Current listings: 105 individuals and 22 entities.
Measures include: asset freezes, travel bans, prohibition on making funds or economic resources available to listed persons and entities.
Sectoral restrictions remain in force:
- Arms embargo against Myanmar.
- Export restrictions on communications monitoring and surveillance equipment.
- Ban on export of dual-use goods intended for military end-use.
- Prohibition on military training and cooperation with the Myanmar Armed Forces.
Changes following review:
One deceased individual removed from the sanctions list.
Core implication:
The extension confirms continued EU policy focus on maintaining comprehensive pressure on Myanmar’s military-linked structures, combining targeted listings with broad sectoral restrictions aimed at limiting access to military-capable technology, financing, and external support.
OTSI issues updated Russia sanctions circumvention guidance: enhanced UK export due diligence framework with high-risk goods list, jurisdiction screening, and expanded red flag typology
The UK Office of Trade Sanctions Implementation (OTSI) has published updated guidance to strengthen UK businesses’ ability to identify, prevent, and mitigate the risks of sanctions evasion involving Russia.
1. Common High Priority List (CHPL) – 50 high-risk goods
- Goods identified as particularly vulnerable to diversion to Russia are structured into four risk tiers:
- Integrated circuits
- Electronic components
- Advanced electronic and mechanical components used in weapons systems
- CNC machine tools and industrial testing/production equipment
- Additional UK-origin goods flagged include:
- industrial machinery
- aerospace and navigation equipment
- motor vehicles and parts
- pumps and turbines
- lubricants and chemicals
- microelectronics and related apparatus
2. High-risk sectors
- Military and dual-use goods
- Aerospace and aviation
- Automotive supply chains
- Microelectronics and semiconductors
- Heavy industrial machinery
3. Enhanced due diligence jurisdictions (13)
Heightened scrutiny is required for transactions involving:
Armenia; China (including Hong Kong and Macau); India; Israel; Kazakhstan; Kyrgyzstan; Malaysia; Serbia; Thailand; Türkiye; UAE; Uzbekistan; Vietnam.
4. Sanctions circumvention red flags
- Four categories of indicators:
- Product risks: mismatch between product capability and declared use; dual-use potential
- Customer risks: sanctions proximity, opaque ownership structures, post-2022 incorporation patterns
- Transaction risks: unusual payment routing, crypto use, invoice splitting, freight forwarder anomalies
- Destination risks: high-risk routing, abnormal logistics flows, ship-to-ship transfers
5. Due diligence expectations
- UK businesses are expected to implement:
- structured sanctions risk assessments
- enhanced KYC and beneficial ownership checks
- end-use and end-user verification
- ongoing transaction monitoring
- contractual “no re-export to Russia” clauses (where appropriate)
6. Enforcement framework
- HMRC: enforcement relating to goods crossing UK borders
- OTSI: enforcement of sanctions involving UK persons/services and non-border-related breaches
- Mandatory reporting channels include the OTSI online reporting system or voluntary disclosure to HMRC
Core takeaway
-
- The guidance significantly elevates UK compliance expectations by formalising a granular, risk-based screening framework across goods, jurisdictions, customers, and logistics chains, with particular emphasis on third-country diversion risks and on proactive due diligence obligations under Russia-related trade controls.
UK exporters and EU firms with UK-nexus operations should benchmark internal compliance frameworks against the OTSI red-flag indicators and due diligence expectations. In particular:
-
- apply enhanced due diligence on CHPL-item exports to the 13 flagged jurisdictions;
- verify end-users and map beneficial ownership structures;
- screen for sudden shifts in customer activity post-February 2022; and
- consider including no-re-export clauses in export contracts.
The guidance aligns with the EU’s first-time activation of the Article 12f anti-circumvention tool under the 20th sanctions package, reflecting continued G7-coordinated enforcement focus.
EU Commission FAQ clarifies scope of Article 5b(2) payment services prohibitions: residency carve-outs, entity ownership rules, and restrictions on supplementary cards
The European Commission has updated its FAQs on the application of Article 5b(2) restrictive measures, providing interpretative guidance on payment services-related prohibitions affecting Russian nationals and Russia-related connections.
Key clarifications:
1. Residency-based exemptions
• The prohibitions do not apply to:
– EU, EEA, or Swiss nationals;
– individuals holding valid residence permits in the EU/EEA/Switzerland.
• Holders of long-term D-type visas who have completed the required national registration are treated as lawful residents.
• Such individuals fall under the Article 5b(3) exemption, including categories such as:
– study,
– employment,
– humanitarian grounds,
– family reunification (subject to national implementation rules).
2. Russian-owned or controlled entities
• Payment services may be provided to entities:
– lawfully established in the EU or third countries,
– even if owned or controlled by Russian nationals.
• Exception: services remain prohibited where entities are used as intermediaries for sanctions circumvention.
3. Supplementary payment instruments
• The prohibition on issuing payment instruments applies to all named cardholders, including supplementary users.
• It is prohibited to issue, renew, or replace supplementary cards issued in the name of:
– Russian nationals, or
– individuals resident in Russia,
• regardless of the primary account holder’s status.
The updated guidance narrows interpretative uncertainty by focusing compliance on residency status and actual control/use of payment instruments, while explicitly closing potential circumvention routes via supplementary cards and intermediary corporate structures.
Payment service providers and financial institutions should:
• extend sanctions screening to supplementary cardholders, not only primary account holders;
• review card renewal and replacement workflows for Russia-nexus exposure; and
• revisit residency-based exemption assessments to correctly distinguish nationality from lawful residency status, including D-type visa holders.
Contact the Ecovis team for support on sanctions compliance in payment services contexts.
Source: https://finance.ec.europa.eu/publications/provision-payments-services_en
About the Author:
Inga Karulaitytė-Kvainauskienė is an attorney-at-law, Partner, and Head of Banking, Finance & FinTech. She is a top-tier expert in FinTech and digital finance regulation in Lithuania and the Baltics. With more than 20 years of experience, she is ranked in FinTech Legal by Chambers and Partners FinTech (2020–2026) and ranked as a Highly Regarded lawyer in Banking and Finance by IFLR1000, Chambers and Partners, and The Legal 500 (2019–2026).
Inga is a Certified Anti-Money Laundering Specialist (CAMS), a Certified Global Sanctions Risk Management Specialist, a certified board member (Corporate Governance Certificate by BICG), and a Certified Internal Auditor.
Newsletter Subscription
Get in touch