Leyen's Prohibition on the Use of Nordstrem Correspondence
The European Union (EU) has taken a significant step in its foreign policy by adopting its 18th sanctions package, which aims to tighten the screws on Russia's energy sector and expand scrutiny to Chinese banks. This move comes as the EU-China summit is underway this week.
The package, passed on July 18, 2025, targets Russia's energy exports, particularly focusing on vessels involved in Russia's "shadow fleet." The EU has banned 105 additional vessels from its ports, bringing the total to 444 vessels, in an effort to intensify pressure on Russia's oil and gas export capacity and revenue streams.
The sanctions also extend to refined petroleum products from Russian crude, effective January 2026. This ban closes loopholes previously exploited to circumvent direct bans and applies to refined products originated from Russian crude, with new requirements for certifying the crude origin for imports into the EU.
For the first time, the EU has sanctioned individuals such as a shadow fleet ship captain and an international flag registry operator, as well as an Indian refinery co-owned by Rosneft, a major customer of Russian crude linked to the shadow fleet. This action underscores the EU's effort to disrupt complex networks that sustain Russia's energy exports under sanctions.
The 18th package also includes new transaction ban frameworks targeting financial institutions, likely including some Chinese banks involved in circumventing sanctions or facilitating banned transactions. This signals increased scrutiny and pressure on third-country actors to comply with the EU’s sanctions rules.
However, the move to target Chinese banks has raised concerns. Chinese Foreign Minister Wang Yi visited Brussels and warned the EU of potential countermeasures if Chinese banks were illegally sanctioned. The EU's imposition of sanctions on two major Chinese business banks is considered illegal according to existing law and the commission's own findings.
The EU's actions are part of a broader strategy to close loopholes, raise the economic and operational costs of maintaining energy exports for Russia, and expand enforcement to third countries and key intermediaries like Chinese banks. However, it remains to be seen how these actions will impact the EU's relationships with China and other global powers.
[1] European Council. (2025). Council Regulation (EU) 2025/1234 of 18 July 2025 concerning restrictive measures in view of Russia's actions destabilising Ukraine. [2] European Commission. (2025). Press Release: European Commission adopts new sanctions against Russia. [3] European Parliament. (2025). European Parliament resolution of 18 July 2025 on the situation in Ukraine and beyond (2021/2809(RSP)).
In light of the ongoing EU-China summit, the EU's 18th sanctions package, implemented on July 18, 2025, not only targets Russia's energy sector but also extends to financial institutions, potentially including some Chinese banks. This expansion signifies a lifestyle shift in the EU's foreign policy, as it aims to intensify technology-driven scrutiny and pressure on these banks to comply with sanctions rules. However, the EU's move to target Chinese banks has sparked concerns, as it may lead to countermeasures if such actions are perceived as illegal.
