Welcome to This Month in EU Sanctions — briefings and podcast episodes at the crossroads of EU law, foreign policy, and corporate compliance. Stay ahead in a fast-evolving EU sanctions and export control landscape by subscribing to the newsletter and podcast. For March 2026, here are the main updates.

New EU Sanctions

Iran

On 16 March 2026, the Council of the European Union (the “Council”) imposed new sanctions an additional 16 persons and three entities over serious human rights violations in Iran for their involvement in serious human rights violations. The new sanctions focus on key figures and organizations responsible for the violent suppression of street protests in January 2026, which resulted in thousands of civilian casualties. The new listings include:

• Iran’s Deputy Minister of the Interior for Security and Law Enforcement Affairs;

• Commanders from local branches of the Islamic Revolutionary Guard Corps (”IRGC”), including the Mohammad Rasulullah Corps in Tehran and the Imam Reza IRGC in Khorasan Razavi Province;

• Members of the judiciary who have participated in the prosecution of peaceful protesters, civil activists, women’s rights advocates, journalists, and political dissidents;

• Naji Research and Development Company (NRDC), an IT firm behind the Nazer mobile app used by Iranian authorities for citizen surveillance, and the Head of Tehran’s Cyber Police, who plays a central role in internet censorship and the prosecution of citizens over digital content.

With these latest additions, the EU’s sanctions for human rights abuses in Iran now cover 263 individuals and 53 entities (See Council Implementing Decision (CFSP) 2026/645 and Council Implementing Regulation (EU) 2026/648). On 30 March 2026, the Council extended the Iran human rights sanctions regime until April 2027. The same day, it also updated the nuclear-related sanctions on Iran to reflect changes to the EU dual-use regulation.

Cyber Attacks

On 16 March 2026, the Council sanctioned three entities and two individuals for their involvement in cyber-attacks targeting EU member states and partners. The new listings include:

• Integrity Technology Group (China) for providing products used to compromise and access over 65,000 devices across six EU member states between 2022 and 2023.

• Anxun Information Technology (China) for offering hacking services targeting critical infrastructure in EU member states and third countries. Two of its co-founders were also sanctioned for their direct involvement in these cyber-attacks.

• Emennet Pasargad (Iran) for unlawfully accessing a French subscriber database, advertised stolen data on the dark web, compromised advertising billboards to spread disinformation during the 2024 Paris Olympic Games, and disrupted a Swedish SMS service affecting numerous EU citizens.

The EU’s horizontal cyber sanctions regime now applies to 19 individuals and seven entities (See Council Decision (CFSP) 2026/588 and Council Implementing Regulation (EU) 2026/589).

Russia Hybrid Threats

On 16 March 2026, the Council sanctioned four individuals for their involvement in Russia’s hybrid activities, specifically Foreign Information Manipulation and Interference (FIMI) targeting the EU, its member states, and partners. The new listings include:

• Sergey Klyuchenkov (Russia) for spreading disinformation to justify Russia’s war against Ukraine, advocates for violence in Ukraine (including against civilians), and promotes the occupation of Baltic states and retaliatory strikes against Ukraine’s supporters (including the US, Türkiye, Germany, France, UK).

• Ernest Mackevičius (Lithuanian-born, Russia), hosting a Russian state TV evening news programme, regularly disseminating false narratives about Russia’s war in Ukraine and the Ukrainian armed forces.

• Graham Phillips (UK) for justifying Russia’s war through disinformation, films propaganda content in Russian-occupied Ukrainian territories, and writes articles supporting Russia’s occupation.

• Adrien Bocquet (France) for amplifying Kremlin propaganda in Europe and Russia through appearances at conflict sites, interviews on Russian TV, and contributions to Kremlin-funded outlets.

The EU’s restrictive measures for Russia’s destabilising activities now apply to 69 individuals and 17 entities (See Council Decision (CFSP) 2026/646 and Council Implementing Regulation (EU) 2026/647. Relatedly, the Council adopted conclusions on advancing the EU’s capacity to counter hybrid threats.

Russian aggression against Ukraine

On 14 March 2026, the Council extended individual listings over Ukraine’s territorial integrity for a further six months. On 16 March 2026, the Council sanctioned nine individuals for their major role in the Bucha massacre (February–March 2022). EU’s sanctions under this regime now apply to around 2,600 individuals and entities (See Council Decision (CFSP) 2026/614 and Council Implementing Regulation (EU) 2026/615).

Policy Developments

Ukraine

On 19 March 2026, the European Council noted in its conclusions on Ukraine that:

The European Union remains determined to further increase pressure on Russia and continue weakening Russia’s war economy so that it stops its brutal war of aggression and engages in meaningful negotiations towards peace. The European Council looks forward to the swift adoption of the 20th sanctions package. It reiterates the importance of further reducing Russia’s energy revenues and further constraining Russia’s banking system, and took stock of efforts to curb Russia’s shadow fleet operations. Undermining the Russian shadow fleet’s business model requires a ‘whole of route’ approach, including by addressing through a common approach the significant environmental, security and maritime safety risks posed by such vessels. In this respect, the European Council calls for further efforts and coordinated action by Member States. It also stresses the importance of continued coordination with G7 and other like-minded partners on sanctions, of strengthening the enforcement of existing measures and closing loopholes, and of further reinforcing the anti-circumvention measures.

In a 31 March 2026 statement, Kaja Kallas noted, among other things:

The way to end this war is to confront Moscow, not reward it. Not to loosen sanctions, but to harden them. The 20th package is ready to go, and we will tighten the net even further, especially around Russia’s shadow fleet.

Middle East

In a 1 March 2026 statement on behalf of the European Union on developments in the Middle East, HR VP Kaja Kallas noted, in relevant parts:

The European Union has adopted extensive sanctions in response to the actions of Iranian authorities, whether their brutal repression and human rights violations against the Iranian people or threats to the region and to European and international security, through Iran’s ballistic missile and nuclear programmes, and its support for armed groups in the Middle East. We will continue to protect EU security and interests, including through additional sanctions. The European Union has consistently urged Iran to end Iran’s nuclear programme, curb its ballistic missile programme, refrain from destabilizing activities in the region and in Europe, and to cease the appalling violence and repression against its own people.

In a 9 March 2026 statement, President Costa and President von der Leyen noted, after the video conference with Leaders from Middle East countries on the war in Iran that “[...] The European Union has been consistent in its position on Iran’s activities and has repeatedly called on their leadership to end its nuclear program and curb its ballistic missile program. The European Union has also condemned the unacceptable repression and violence perpetrated by the Iranian regime against its own citizens.”

A New Doctrine?

In a 9 March 2026 speech at the EU Ambassadors Conference, Ursula von der Leyen noted, among other things, that:

Europe can no longer be a custodian for the old-world order, for a world that has gone and will not return. We will always defend and uphold the rules-based system that we helped to build with our allies, but we can no longer rely on it as the only way to defend our interests or assume its rules will shelter us from the complex threats that we face. So we need to build our own European path and find new ways of cooperating with partners.

The second is that we need a clear-eyed and hard look at our foreign policy in today’s world, both in how it is designed and how it is deployed. We urgently need to reflect on whether our doctrine, our institutions and our decision making – all designed in a postwar world of stability and multilateralism – have kept pace with the speed of change around us. Whether the system that we built – with all of its well-intentioned attempts at consensus and compromise – is more a help or a hindrance to our credibility as a geopolitical actor. I know this is a stark message and a difficult conversation to have.

A New EU Sanctions Program to Tackle Transnational Crime?

On March 9 2026, the European Parliamentary Research Service (EPRS) published a briefing titled “A new horizontal sanctions regime: Migrant smuggling, trafficking in human beings and other forms of organised crime.”

EU Courts Developments

Highlights of 2025 Annual Report

In March 2025, the Court of Justice of the European Union published its annual 2025 year in review report. The report highlighted a notable continuing increase of the Court’s docket regarding EU sanctions.

Whereas, as of 31 December 2024, 91 out of 1,705 pending cases related to restrictive measures, by 31 December 2025 that number had increased to 125 out of 1,167 pending cases, representing an increase of 34 cases (approximately 37%), alongside a significant rise in their proportion of total pending cases from about 5.3% to 10.7%.

The 2025 report highlighted two cases:

• Judgment of 10 September 2025, Positive Group v Council (T-573/23) (interpreting the new criterion to freeze the funds and economic resources of entities operating in the Russian IT sector with a license issued by the Centre for Licensing, Certification and Protection of State Secrets of the Russian Federal Security Service (FSB) or a ‘weapons and military equipment’ licence administered by the Russian Ministry of Industry and Trade).

• Judgment of 15 January 2025, MegaFon v Council (T-193/23 (finding that the Council had provided a sufficiently precise explanation of the reasons for those sanctions and had been under no obligation to hear the undertaking beforehand, in order to preserve the element of surprise needed for the sanctions to be effective. It also held that the measures remain proportionate to and necessary for the public interest objective of restricting Russian military capacity in the context of the war in Ukraine, even though those measures affect MegaFon’s activities and reputation.)

Select Judgements Rendered in March 2025

In March 2025, several key judgements and opinions were delivered, including:

• On 30 March 2026, the Court rendered its judgement in joined cases Cases C-696/23 P Pumpyanskiy v Council, C-704/23 P Khudaverdyan v Council, C-711/23 P Rashnikov v Council, C-35/24 P Mazepin v Council and C-111/24 P Khan v Council, interpreting the notion of “leading businesspersons involved in economic sectors that generate significant revenue for the Russian government” and dismissing all actions.

• On 12 March 2026, the Court of Justice rendered its judgment in Case C‑84/24 EM System v AB SEB Bank, a request for a preliminary ruling from the Lithuanian Supreme Court on the interpretation of the notions “ownership and control” and the relevant thresholds.

• On 12 March 2026, the Court of Justice rendered its judgment in Case C‑465/24 SBK Art v Fortenova Group STAK, a request for a preliminary ruling from the Dutch Supreme Court on the meaning of “freezing of funds” in the context of voting rights.

• On 26 March 2026, the Court of Justice dismissed an appeal against the General Court’s refusal to annul a 2022 listing under the DRC sanctions regime in case Case C-455/24 UC v. Council.

• On 18 March 2026, the General Court rejected an application to annul the listings of Samer Al Dibs’ under the Syria sanctions regime in Case T-405/24 Al Dibs v Council.

• On 26 March 2026, the General Court dismissed an application to annul the listing of Xavier Moreau under the Russia hybrid threats sanctions regime in Case T-170/26 Moreau v. Council.

• On 19 March 2026, Advocate General Szpunar delivered his Opinion in Case C‑842/24, DNO Yemen AS v Petrolin Trading Ltd, a preliminary reference from the French Supreme Court (Cour de cassation).

• On 12 March 2026, Advocate General Campos Sánchez-Bordona delivered his Opinion in Case C-482/24 P, Global 8 Airlines v European Commission.

Compliance Guidance

Throughout the month of March 2026, the European Commission (the “Commission”) and several national competent authorities continued to publish compliance guidance, including:

• On 13 March 2026, the Commission published new FAQs concerning article 5(b)(2) of Council Regulation 833/2014 (Frequently asked questions on the provision of payments services concerning sanctions adopted following Russia’s military aggression against Ukraine).

• On 16 March 2026, the French Direction générale du Trésor and the Autorité de contrôle prudentiel et de résolution (ACPR) published new guidelines on asset freeze obligations (Lignes directrices conjointes de la Direction Générale du Trésor et de l’Autorité de contrôle prudentiel et de résolution sur la mise en œuvre des mesures de gel des avoirs).

• On March 23, 2026, the Italian @UAMA issued a notice to economic operators in applying for exemptions under Article 5n (10)(h) of Council Regulation 833/2014 (COMUNICATO TECNICO PER LA PRESENTAZIONE DI ISTANZE IN DEROGA EX ART. 5 QUINDECIES PAR. 10 LETT. H DEL REG. (UE) N. 833/2014).

EU Sanctions Directive

On 3 March 2026, a proposal for legislation transposing Directive (EU) 2024/1226 of 24 April 2024 on the definition of criminal offences and penalties for the violation of Union restrictive measures and amending Directive (EU) 2018/1673” was introduced in the French National Assembly, kicking off the legislative process.

The Podcast

Catch up with the latest three episodes of the podcast (available wherever you get your podcasts).

Tune in soon for the next episode. The podcast is available on all platforms.

• 🎧Apple Podcasts: https://lnkd.in/eG9mSj8V

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• 🎧YouTube: https://lnkd.in/eH6WRNBA

Looking Ahead

• 21 April 2026 - Foreign Affairs Council

🇪🇺 Thank you for reading This Month in EU Sanctions.✍️.

Thank you for your continued interest in This Month in EU Sanctions, a resource designed to help navigate the complexities of EU sanctions law, policy, and compliance.

The geopolitical developments that unfolded in January 2026 underscored the importance of readiness and adaptation, both for policymakers and the EU private sector.

At a pivotal moment for the EU, the latest episode of podcast welcomed Rūta Bajarūnaitė, Head of the Sanctions Policy Team at Lithuania’s Ministry of Foreign Affairs, for a deep dive into the past, present, and future of EU sanctions law and policy. The conversation covered, among other topics:

• The EU’s agility in responding to geopolitical crises

• Exemptions and derogations for sensitive products

• Strengthening customs enforcement at the EU’s external borders

• Communicating sanctions guidance to businesses

• Preventing circumvention and the “best efforts” clause

• The evolving landscape of EU sanctions law and policy

The latest episode is available wherever you get your podcasts.

• Apple Podcasts

• Spotify

• YouTube

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January 2026 EU Sanctions Developments

Russia

Russian Gas Import Phase Out

On 2 February 2026, the European Union published the Regulation (EU) 2026/261, (which entered into force on 3 February 2026) confirming the termination of imports of Russian gas and laying the groundwork for the full phase-out of Russian oil. The Regulation introduces a phased prohibition on the import of Russian natural gas, covering both pipeline gas and liquefied natural gas (“LNG”) as outlined below:

• 18 February 2026: importers are required to obtain prior authorisation in order to temporarily import Russian pipeline gas and LNG until the following prohibitions enter into force:

• 25 April 2026: ban applies to Russian LNG under existing short-term supply contracts concluded before 17 June 2025.

• 17 June 2026: ban applies to Russian pipeline gas under existing short-term supply contracts concluded before 17 June 2025.

• 1 January 2027: ban applies to Russian LNG under existing long-term contracts.

• 30 September 2027: ban applies to Russian pipeline gas under existing long-term contracts.

• 18 March 2026: the prohibition on gas imports enters into force, except as otherwise specified above.

As part of the preparations for the full phase-out of Russian oil, Member States importing oil originating in, or exported directly or indirectly from, the Russian Federation shall establish a plan setting out the measures, milestones, and potential obstacles to diversifying their oil supplies (a “national oil diversification plan”), with a view to discontinuing all such imports by the end of 2027.

Oil Price Cap

On 15 January 2026, the new automatic and dynamic mechanism for adjusting the price cap on Russian crude oil was applied for the first time. Under this mechanism, the price cap was set at USD 44.10 per barrel, effective from 1 February 2026. From 15 January 2026, contracts concluded under the previous price cap may continue to be performed for a transitional period of 90 days.

Hybrid Threats & Human Rights

On 29 January 2026, the Council of the European Union (the “Council”) imposed restrictive measures on an additional six individuals in response to Russia’s continued hybrid activities, in particular its engagement in Foreign Information Manipulation and Interference (“FIMI”) targeting the European Union, its Member States, and partner countries. (See Council Decision (CFSP) 2026/260 and Council Implementing Regulation (EU) 2026/259).

Iran

On 29 January 2026, the Council adopted new sanctions over serious human rights violations and Iran’s continued support to Russia’s war of aggression against Ukraine.

Human Rights Violations

The Council adopted restrictive measures against 15 individuals and six entities involved in serious human rights violations in Iran, in response to the violent suppression of peaceful protests, including the use of excessive force, arbitrary detentions, and intimidation by security forces against demonstrators.

Restrictive measures in response to human rights violations in Iran now target a total of 247 individuals and 50 entities. These measures include asset-freeze obligations, travel bans within the European Union, and a prohibition on making funds or economic resources available to designated persons and entities. (See Council Implementing Decision (CFSP) 2026/265 and Council Implementing Regulation (EU) 2026/267).

Relatedly, Member States announced having unanimously agreed to designate the Islamic Revolutionary Guard Corps as a terrorist organization.

Iran’s support to Russia’s war of aggression against Ukraine

The Council also imposed restrictive measures on four persons and six entities under the EU dedicated sanctions regime, against the Iranian state-sponsored programme for the development and production of unmanned aerial vehicles (“UAVs”).

The new measures target key entities and individuals involved in Iran’s ballistic missile and UAV programmes, including major missile development entities, front companies linked to the Ministry of Defence, and private companies supplying critical components to the IRGC. The listings also cover business leaders and shareholders engaged in missile and UAV development.

With these additions, the sanctions regime now applies to 24 individuals and 26 entities and remains in force until 27 July 2026. The Council also expanded export restrictions from the EU to Iran to cover additional components, materials, and technologies used in the development and production of missiles and UAVs (See Council Decision (CFSP) 2026/263 and Council Implementing Regulation (EU) 2026/262).

Other EU Sanctions Developments

• Sudan: on 29 January 2026, the EU Council imposed restrictive measures on seven individuals in response to the continued deterioration of the situation in Sudan, including the sharp escalation of violence resulting in severe loss of life in Darfur and across the country, as well as ongoing violations of international human rights law and international humanitarian law. 5 of them are RSF-affiliated and 2 are SAF-affiliated individuals (See Council Decision (CFSP) 2026/254 and Council Implementing Regulation (EU) 2026/251.

• Hamas and PIJ: on 16 January 2026, the EU Council has extended, until 20 January 2027, the existing restrictive measures against those who support, facilitate or enable violent actions by Hamas and the Palestinian Islamic Jihad (“PIJ”). (See Council Decision (CFSP) 2024/385).

• Guatemala: on 9 January 2026, the EU Council has extended by one year, until 13 January 2027, the targeted restrictive measures imposed on those responsible for actions undermining democracy, the rule of law, and the peaceful transfer of power in Guatemala. (See consolidated text: Council Regulation (EU) 2024/287 of 12 January 2024).

Compliance Updates

FAQs

In January 2025, the European Commission (the “Commission”) published three updates to its FAQs on sanctions against Russia and Belarus (the “FAQs”).

• On 15 January 2026, the Commission updated its FAQs ahead of change to Russia oil price cap.

• On 22 January 2026, the Commission published new FAQs on the application of Article 5n (service ban), following entry into force of 19th sanctions package.

• On 23 January 2026, the Commission published new FAQs on the application of Article 5af of Regulation (EU) 833/2014 (Nord Stream transaction ban) introduced by the 18th Russia sanctions package,

The latest version of the consolidated version of the FAQs is dated 23 January 2026.

Italy

The Italian Government has published the Legislative Decree No. 211/2025, effective as of January 24, implementing EU Directive 2024/1226 on violations of EU restrictive measures and introducing new criminal offenses, thereby significantly reshaping the applicable sanctions framework. These offenses are now included among those triggering corporate liability under Legislative Decree No. 231/2001 (the “Decree 231”).

Enforcement Coordination

OLAF coordinated an international investigation into suspected circumvention of EU sanctions involving over 760 transport vehicles. This follows broader initiatives by OLAF and Europol to strengthen the fight against sanctions circumvention.

Developments in EU Courts

In January 2026, the Court of Justice of the EU rendered several judgements relating to EU sanctions.

• Judgment of ECJ of 15 January 2026 in Issam Anbouba v Council (Case C-494/24) and judgment of the General Court of 14 January 2026 (Case T-403/24) rejecting Issam Anbouba delisting applications under the Syrian sanctions regime.

• Judgment of the General Court of 14 January 2026 in Euro Asia Cargo v Council (Case T-232/24), dismissing the action brought by Euro Asia Cargo challenging its inclusion in Annex IV to Regulation (EU) No 833/2014 under the Russia-Ukraine sanctions regime.

• Judgment of the General Court of 14 January 2026 in Feras Al Akhras v Council (Case T-176/24), dismissing Feras Al Akhras’ delisting application under Syrian sanction regime.

In addition, the Advocate General Medina delivered an Opinion in the appeal lodged by the National Settlement Depository (Case C-801/24 P), examining the interpretation of the concept of “support for the Russian Government”.

Looking Ahead

• Foreign Affairs Council, 23 February 2026

Emboldened by the operational success of the 3 January 2026 military operation in Venezuela, the Trump administration has declined, in several statements, to rule out the use of force or other forms of coercion to pursue U.S. interests in Greenland. As such pronouncements could ultimately question the territorial integrity and sovereignty of Denmark, the developing “Greenland crisis” presents one of the most significant geostrategic struggles for the EU in decades, raising questions about how the EU might act when the core interests of the EU and its Member States are threatened—even by an ally.

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Does the EU Have a Plan?

This dire situation engages institutional responsibilities that some in the EU remain reluctant to fully acknowledge. Yet the EU owes its citizens and its future a clear-eyed assessment. In light of the current U.S. administration’s force-driven approach to foreign policy, and conduct that appears ready to depart from established international legal norms, the EU must find ways to translate its values into action with agility and resolve. Because the EU lacks immediate military capacity to deter, it needs to consider other instruments, beginning with its economic and regulatory power.

Since February 2022, the EU has demonstrated an impressive capacity to innovate in the field of restrictive measures (sanctions) in response to Russia’s war of aggression against Ukraine. In doing so, it overcame several long-standing political and legal hurdles and reaffirmed its commitment to defending its values, sovereignty and territorial integrity under international law. Although the EU has built a robust sanctions capacity for this new world, it seems unprepared—and, in some respects, unwilling—to address the full spectrum of challenges posed by the Greenland crisis.

The EU’s newly-found capacity to assert itself now has direct relevance beyond the Ukrainian context. The challenge is how the EU can respond to certain U.S. threats or actions in relation to Greenland—and, more broadly, how it prepares for future crises involving new actors and threats. At this juncture, the issue is not whether the EU should sanction the United States, but whether it has sufficient sanctions readiness to address these new threats, even where the source is a historic ally.

Crossroads of Transatlantic Security

The U.S. has long recognised the strategic importance of Greenland, a territory situated at the nexus of the Arctic, North Atlantic, and North American defence perimeter. Against the purported backdrop of increased Russian militarisation of the Arctic and China’s growing economic and scientific presence, U.S. stated interest in Greenland is neither novel nor inherently illegitimate.

For nearly 160 years, since U.S. Secretary of State William H. Seward first identified Greenland as strategically significant, successive U.S. administrations have pursued territorial interests with Denmark through negotiation and cooperation (such as the purchase of the Danish Virgin Islands in 1917). When the Truman administration explored the possibility of purchasing Greenland in 1946—a proposal firmly rejected by Denmark—the agreed compromise was deeper defence cooperation. This culminated in a 27 April 1951 Defence Agreement, still in force today, which grants the United States extensive defence rights, including a permanent military presence at the Pituffik Space Base.

In August 2019, the first Trump administration publicly outlined an intention to buy Greenland, characterising the idea as a “real estate deal.” From 2025 onwards, U.S. rhetoric intensified, portraying Greenland not as a subject of negotiation between allies, but as a national security imperative justifying all possible forms of action.

From Rhetoric to Threats

From an EU policy perspective, what should be troubling is not the interest itself, but the apparent readiness of the current U.S. administration to pursue it through means that could challenge the sovereignty of an EU Member State and the integrity of established alliance frameworks. As a semi-autonomous jurisdiction, Greenland is part of Denmark, which remains fully responsible for Greenland’s foreign relations and defence. Greenland’s current status is inseparable from that of Denmark; Greenlanders are Danish nationals and therefore EU citizens.

What distinguishes this latest phase is the emergence of language, signalling and potential acts associated with coercion. Statements by senior U.S. officials declining to exclude the use of force in Greenland, reportedly exploring military scenarios, coupled with possible hybrid tactics, including offering lump-sum payments to residents to induce acceptance, represent a new threat to Greenland, Denmark and by extension the EU. In December 2025, Denmark recognised this when its Defence Intelligence Service reportedly assessed that certain actions by the U.S. could pose a potential security risk to the country.

Articulating a Lucid Response

The Greenland crisis is not episodic and must be placed in the broader context of the current U.S. administration’s view of the EU. Over the first year of the current administration, a growing number of U.S. actions and pronouncements have openly targeted the EU itself. They include public statements questioning core alliance commitments, attacks on European democratic institutions, and the use of targeted sanctions—such as designations and visa restrictions—against individual European officials, demonstrating the EU’s exposure to such measures from even its closest allies. These actions are reflected in elements crystallised in the December 2025 U.S. National Security Strategy, and, most seriously, in the apparent refusal to rule out the use of force or other coercive actions regarding Greenland.

A Policy Gap

EU sanctions are an essential element of EU external action. They are, fundamentally, a policy tool. EU sanctions policy can serve a broad range of objectives, such as promoting values and norms or protecting security interests.

Under EU primary law, EU external action must be confined to certain defined objectives. Article 21(2)(a) of the Treaty on European Union (“TEU”) provides that the EU must define and pursue common policies and actions, among other things, in order to safeguard its values, fundamental interests, security, independence, and integrity. This Treaty provision is not aspirational; it defines the purpose and scope of EU external action.

To date, the EU has not articulated a common policy vis-à-vis the United States in relation to the situation in Greenland. However, the 6 January 2026 joint statement on Greenland signed by six EU Member States (France, Germany, Italy, Poland, Spain, Denmark) noted, in relevant parts:

Security in the Arctic must therefore be achieved collectively, in conjunction with NATO allies including the United States, by upholding the principles of the UN Charter, including sovereignty, territorial integrity and the inviolability of borders. These are universal principles, and we will not stop defending them.

The United States is an essential partner in this endeavour, as a NATO ally and through the defence agreement between the Kingdom of Denmark and the United States of 1951.

Greenland belongs to its people. It is for Denmark and Greenland, and them only, to decide on matters concerning Denmark and Greenland (emphasis added).

That statement lays out core principles and interests.

Drawing Red Lines

Broadly speaking, EU sanctions are adopted through a two-step process: a Common Foreign and Security Policy (“CFSP”) decision under Article 29 TEU, followed by implementing measures under Article 215 of the Treaty on the Functioning of the European Union. The scope of EU law and the scope of EU external action are distinct. While EU law does not apply territorially to Greenland, an overseas country and territory, the EU may adopt CFSP measures—including sanctions—in response to conduct that threatens the sovereignty or security of a Member State, regardless of where it occurs.

There is neither a legal requirement or supposition that the target of EU sanctions policy be an adversary, nor is there any exclusion for EU allies. The absence of precedent for sanctions against certain policies of the United States (with the limited exception of the EU blocking statute which isn’t sanctions per se) or another ally reflects political self-restraint, not legal impossibility.

Conceptually, as part of the contingency planning, the EU would need to define, however, a set of red lines or triggers that would lead to the imposition of targeted measures. Under Article 21(2)(a) TEU, the EU is obligated to define and pursue policies that safeguard its values, security, and integrity. In the context of Greenland, this mandate requires clear red lines to deter coercion, a conduct that would need to be defined.

Based on the 6 January 2026 joint statement and observed U.S. conduct or stated intentions, potential triggers for EU sanctions action could include, among other things:

• Threats or use of force in violation of the UN Charter;

• Actions threatening or undermining Denmark’s sovereignty or territorial integrity; or

• Hybrid interference (e.g., disinformation, election meddling) targeting Greenland’s or Denmark’s civil society.

While these triggers are illustrative, they reflect potential breaches of EU red lines that could justify a calibrated response.

Similarly to other existing EU sanctions regimes, a targeted action in respect of the Greenland crisis should have a clear scope, limits and safeguards. As with all EU sanctions regimes, any measures adopted would necessarily be temporary, targeted, and reversible, consistent with the principles of proportionality, legal certainty, and effective judicial review of the Court of Justice as relevant. Their purpose would be to induce a change in policy or behaviour that undermines the sovereignty and territorial integrity of Denmark and the EU’s foundational values more generally.

Identifying Options

In its contingency planning, the EU should develop a list of potential targeted actions that it would present for consideration based on defined triggers following an escalatory scenario. EU sanctions law and policy offers a broad range of scalable targeted options that can be tailored to specific policy objectives. These traditionally include individual travel bans, asset freezes, and limitations on trade in goods and services, as determined by the 27 Member States acting within the Council of the EU. Targeted actions such as travel bans need not be spectacular to be effective.

The EU has a full and modern sanctions toolbox. Since 2022, the EU has adopted nearly twenty sanctions packages against Russia. The EU has learned to use sanctions to tackle hybrid threats, disinformation and election interference under specific Russia, Belarus, and Moldova sanctions regulations. It also knows to create sanctions regimes without using them for policy signalling (e.g., Lebanon). The legal and institutional experience is therefore not only available, but well-developed. The issue is whether that knowledge is now actionable to address another threat, if that becomes necessary.

Beyond classic restrictive measures, the EU could also consider targeted transaction bans, suspending or conditioning elements of broader economic cooperation, for example, progress under the proposed 21 August 2025 Framework Agreement on Reciprocal, Fair, and Balanced Trade—which envisages substantial EU investment in the United States and increased procurement of U.S. defence equipment.

Access to the EU market could require non-interference with core EU values, internal affairs and EU laws and regulations. Directing EU capital towards the U.S. presupposes mutual trust and alignment of strategic interests. This assumption becomes untenable if coercive pressure is applied against an EU Member State or the EU. The opportunity cost is significant since according to the Draghi report on EU competitiveness, the EU requires between EUR 750 and 800 billion in additional annual investment in the EU economy to meet its own strategic objectives whereas the August 2025 agreement with the Trump administration commits up to USD 600 billion in EU investment in the United States through 2028.

Evaluating the Risks

The purpose of contingency planning is not necessarily to proceed with the sanctions action, but to be prepared to take it. It is not uncommon in sanctions policy to define a specific legal framework laying out the basis for action and yet not use it because the policy conditions are not met. The sanctions readiness plan would envision the prospect of possible sanctions before the threat materialises.

The contingency plan should evaluate the following four risks.

1. Risk of escalation or confrontation with the U.S. administration while seeking U.S. support for Ukraine.

The issue here is whether security interdependence would be an absolute bar to targeted actions, if the sanctions policy scenario materialises. The risk analysis should evaluate how far U.S. policy in support of Ukraine has already shifted. American support for Ukraine has reportedly been significantly reduced, and reported progress on security guarantees remains contingent on Russian consent to a ceasefire, the prospect of which remains uncertain. Moreover, recent U.S. sanctions policy and actions (including regarding Russian oil) appear increasingly driven by global energy and geopolitical considerations beyond Ukraine, such as Venezuela and Iran. That said, increased pressure by the U.S. on Russia weights heavily on improving the odds of a resolution of the war favourable to Ukraine.

At the same time, alliance unity cannot be premised on the tolerance of coercion among allies. Failing to articulate red lines arguably weakens, rather than strengthens, collective security. In addition, creating incentives to address the Greenland crisis through sanctions outside of NATO might insulate the alliance from those tensions and decouple the issues. Considering sanctions as a response if certain red lines are crossed instead of focusing on the impact on NATO, could insulate, to a certain extent, the discussion from the security forum. In the long-term, if successful in preventing an escalatory solution to the Greenland, a targeted EU sanctions strategy could reinforce the trans-Atlantic alliance.

2. Risk of insufficient power to effectively influence U.S. policy.

The question here is what leverage the EU actually has to build a sanctions strategy vis-a-vis the current U.S. administration in relation to Greenland crisis. Sanctions are inherently an instrument of economic power in support of foreign policy objectives. Few actors in the world wield as much economic power as the European Union. As the world’s largest single market with around 440 million consumers, the EU forms one of the most integrated economic regions on the planet. The combined EU economy accounts for approximately 14–15 % of global GDP, placing it alongside China and the United States as a top-tier global economic power.

The EU is also the world’s largest trading bloc, leading in both the export and import of goods and services and serving as the top trading partner for dozens of countries worldwide. Its role in international investment is similarly dominant, with the EU ranking first in both inbound and outbound foreign direct investment flows, underscoring its central position in global economic networks. If the lack of military force is a real weakness for the EU, its economy could provide significant leverage for sanctions policy. The issue is whether the EU is sufficiently self-aware of the opportunities that its economic strength provides.

3. Risk of not being able to move swiftly enough.

A reoccurring criticism casts the EU as an organisation unable to adapt to new realities. This ignores the institutional learning curve since 2022. Sanctions need not be comprehensive to be impactful, and even the credible initiation of the process would clarify the EU’s position and prompt recalculation by the U.S. Drawing up a list of targeted measures is not complicated. The EU has learned to swiftly deliberate and consider sanctions. Some EU sanctions could be fast-tracked. It is one of the reasons why EU sanctions should be considered in the scenario. The Anti-Coercion Instrument that entered into force in 2023 was arguably not designed for prompt and targeted action to respond to an escalatory scenario. It would not allow the imposition of select travel bans, for instance, although it could be relevant to address specific threats (such as tariffs) and could be included in the readiness plan. A key question in this aspect of the contingency planning scenario is where the impetus for a dedicated sanctions policy would originate with the EU and its institutions and who would shepherd it through the process. The EU could consider conferring with other non EU NATO partners and within the G7+ coalition.

4. Risk that economic cost would follow.

It is correct that sanctions would entail economic costs for the EU. But those costs should be weighed against the price of inaction. Failure to respond would embolden coercive behaviour and signal vulnerability to other powers, including Russia and China. The strategic and opportunity costs of passivity are likely to exceed those of a measured, targeted response. Sanctions strategy planning would necessitate performing that assessment.

Admittedly, sanctions could backfire if the assessment ultimately overplays the EU’s hand or underestimates a potential U.S. reaction, which is difficult to predict and evaluate. As with other foreign policy issues, the question would likely trigger strong internal debates (requiring unanimity) that if not managed adequately would weaken the EU’s credibility (see discussions regarding Israel). A calibrated, scaled-approach to measures could mitigate those risks.

What is already clear from the Greenland crisis, considering the lack of a coordinated response at the Member State, is that the EU does not have a steering mechanism to initiate and coordinate sanctions policy contingency planning. From an institutional perspective, the absence of contingency sanctions planning is itself a strategic vulnerability.

Finding Leverage: Sanctions Readiness as Deterrence

All in all, sanctions need not—and should not—be inevitable. This analysis does not assume inevitability, nor does it suggest desirability. Rather, it argues only that readiness itself has legal, strategic, and deterrent value. The objective is not escalation, but stabilisation; not rupture, but restraint.

It is for Denmark and Greenland, and them only, to decide on matters concerning Denmark and Greenland, whether it is through existing frameworks such as the 1951 agreement or otherwise. However, the EU would need to communicate, clearly and unequivocally, that if certain red lines are crossed, targeted sanctions would be considered. What is currently missing is a clear plan that the EU is prepared to use sanctions if necessary.

The conclusion is uncomfortable, and for many it may still seem inconceivable. Yet the reality confronting the EU at this moment is one few would have ever imagined. The responsibility is collective. Whether the EU chooses to confront this reality explicitly or remain passive, the implications for its sovereignty and credibility will be significant.

We live in a new age of EU sanctions and export controls. This Month in EU Sanctions brings together the most significant legal and policy developments, helping you stay ahead in a rapidly evolving landscape. For December 2025, here are the updates.

EU Russia Sanctions

Fast-Track Shadow Fleet Enforcement

In December 2025, the Council of the European Union (the “Council”) took several actions against the Russian shadow fleet and its ecosystem.

On 18 December 2025, the Council sanctioned an additional 41 vessels, updating Annex XVI to Decision 2014/512/CFSP.

This measure is intended to target non-EU tankers that are part of Putin’s shadow fleet circumventing the oil price cap mechanism or support the energy sector of Russia, or vessels that are responsible for transporting military equipment for Russia or involved in the transport of stolen Ukrainian grain and cultural goods from Ukraine.

The latest action (See Council Decision (CFSP) 2025/2617 and Council Regulation (EU) 2025/2618) brings the total of designated vessels to almost 600. Moving forward, shadow fleet designations will be fast-tracked, with monthly decisions on a rolling basis.

Targeting enablers of the shadow fleet, on 15 December 2025, the Council sanctioned an additional five individuals and four entities in the UAE, Vietnam and Russia.

The listed individuals are businessmen linked are [...] all involved in an economic sector providing a substantial source of revenue to the Government of the Russian Federation. Additionally, they control vessels transporting crude oil or petroleum products, originating in Russia or being exported from Russia, concealing the actual origin of the oil, while practicing irregular and high-risk shipping practices.

With the 15 December 2025 action (See Council Decision (CFSP) 2025/2594 and Council Implementing Regulation (EU) 2025/2588), EU financial sanctions adopted in response to Russia’s ongoing aggression against Ukraine apply to over 2,600 individuals and entities.

Relatedly, on 15 December 2025, the EU and its member states adopted a declaration on States on making full use of the international law of the sea framework relating to threats from the “shadow fleet” and to the protection of critical undersea infrastructure.

Enhanced Central Bank of Russia and Extended Sectoral Sanctions

On 12 December 2025, the Council adopted Council Regulation (EU) 2025/2600 to prohibit, on a temporary basis, any transfers of Central Bank of Russia (“CBR”) assets immobilised in the EU back to Russia. This decision was taken under Article 122 of the TFEU as a matter of urgency to limit the damage to the EU economy caused by Russia’s war against Ukraine, complementing existing measures against the CBR.

On 22 December 2025, the Council renewed the EU sectoral sanctions in view of Russia’s continuing actions destabilising the situation in Ukraine for a further 6 months, until 31 July 2026.

Hybrid Threats & Human Rights

On 15 December 2025, the Council sanctioned 12 individuals and two entities, in light of Russia’s continued hybrid activities, including Foreign Information Manipulation and Interference (FIMI) and malicious cyber activities against the EU and its member states (See Council Decision (CFSP) 2025/2572 and Council Implementing Regulation (EU) 2025/2568).

On 22 December 2025, the Council sanctioned two persons responsible for serious violations of human rights, the repression of civil society and democratic opposition, and the undermining of democracy and the rule of law in Russia (See Council Decision (CFSP) 2025/2637 and Council Implementing Regulation (EU) 2025/2638).

Russian Gas Import Phase Out

On 3 December 2025, the Council and the European Parliament reached an agreement on the regulation to phase out imports of Russian natural gas. Imports of Russian pipeline gas and LNG into the EU will be prohibited from six weeks after entry into force of the regulation, while maintaining a transition period for existing contracts (with a full ban from the end of 2026 and autumn 2027 respectively).

EU Belarus Sanctions

On 15 December 2025, the Council introduced a new criterion allowing to sanction individuals, entities and bodies benefiting from, involved in or facilitating actions or policies attributable to Belarus, which undermine or threaten democracy, the rule of law, stability or security in the EU and its member states. The decision follows the recent meteorological balloon incursions into Lithuania’s airspace that had been condemned on 29 October 2025.

• The EU will be able to sanction individuals and entities engaged in actions targeted at the functioning of democratic institutions, economic activities or services of public interest of the EU and its member states, including actions that support or facilitate foreign information manipulation and interference.

• The EU will also be able to target the unauthorised entry into the territory of a member state. The new criterion also covers actions aimed at interfering with, damaging or destroying critical infrastructure, as well as widespread or systematic actions resulting in the disruption of such infrastructure.

See Council Decision (CFSP) 2025/2585 and Council Regulation (CFSP) 2025/2601.

Other EU Sanctions Developments

• Haiti: On 15 December 2025, the Council adopted additional sanctions against three Haitian individuals as well as one entity in view of the escalating gang violence, unremitting serious human rights abuses committed by the gangs in the country, and the continuing impunity for the perpetrators (See Council Decision (CFSP) 2025/2561 and Council Implementing Regulation (EU) 2025/2567.

• Venezuela: On 15 December 2025, the Council extended existing sanctions in view of the situation in Venezuela for a further year, until 10 January 2027 (See Council Decision (CFSP) 2025/2586 and Council Implementing Regulation (EU) 2025/2559).

• North Korea: On 15 December 2025, the Council made updates to the list of persons and entities implementing Regulation (EU) 2017/1509 (See Council Decision (CFSP) 2025/2580).

• DRC: On 8 December 2026, the Council renewed its sanctions in view of the situation in the Democratic Republic of the Congo (“DRC”) by another year, until 12 December 2026 (See Council Decision (CFSP) 2025/2507 and Council Implementing Regulation (EU) 2025/2508).

• EU Global Human Rights: On 4 December 2025, the Council prolonged the list of individuals, entities and bodies subject to sanctions for serious human rights violations and abuses, for another year until 8 December 2026 (See Council Decision (CFSP) 2025/2469 and Council Implementing Regulation (EU) 2025/2471 of 4 December 2025).

• Mali: On 1 December 2025, the Council extended the sanctions in view of the situation in Mali for one year, until 14 December 2026 (See Council Decision (CFSP) 2025/2436) and Council Implementing Regulation (EU) 2025/2435.

Policy Updates

Russia Sanctions

Following the 15 December 2025 Foreign Affairs Council, HR VP Kaja Kallas noted:

We decided last time that we are going to put sanctions on shadow fleet on rolling basis. So, like I said, we did 40 vessels and some enablers today. So not waiting, huge packages, but actually going with the ones that we can move forward. Because really, when we did it, the first time we saw it has a huge impact on the oil revenues. Of course, Russia is getting more creative, has some friends, and we need to be agile and really move fast. And that is why we are doing this on rolling basis every month. Of course, the work on the 20th Sanctions Package is going in parallel, but I think we should not wait, and we have shown that we are not waiting behind those packages, but actually moving faster with the rolling of the sanctions on shadow fleet. Lifting sanctions right now not discussed because we are definitely not there. As I said, we have to put the pressure on Russia so we are doing actually more in order to deprive them from the funds to finance this war.

Regarding sanctions, the 18 December 2025 European Council Conclusions noted, among other things:

The European Union remains determined to maintain and increase pressure on Russia to stop its brutal war of aggression and engage in meaningful negotiations towards peace. In this context, the European Council calls on the Council to continue working on a new sanctions package, with the aim of adopting it as soon as possible after its presentation in early 2026. It also stresses the importance of further coordination with G7 and other like-minded partners on sanctions, and of further reinforcing the anti-circumvention measures.

Migrant Smuggling

The Commission is preparing a new sanctions regime that would allow the EU to target migrant smugglers. In a 10 December 2025 speech at the second Conference of the Global Alliance to Counter Migrant Smuggling, European Commission President Ursula von der Leyen noted:

This is why Europe is developing a stringent new sanctions regime against smugglers – in coordination with our G7 partners. We want to be able to freeze the smugglers’ assets – to destroy their very financial bases. But also, to issue travel bans, so that we can restrict their movements. Our goal is very simple. We want to bankrupt their businesses through all means available.

Compliance Updates

In December 2025, the European Commission (the “Commission”) published three updates to its FAQs on sanctions against Russia and Belarus (the “FAQs”).

• On 19 December 2025, regarding Article 5ah of Council Regulation (EU) No 833/2014 (special economic zones).

• On 17 December 2025, regarding Articles 2, 2a and 2b of Council Regulation (EU) No 833/2014. Correlation table included (export related restrictions for dual-use goods and advanced technologies).

• On 17 December 2025, regarding Article 5v and 5w of Council Regulation (EU) No 833/2014 (movement of Russian diplomats).

The latest version of the consolidated version of the FAQs is dated 19 December 2025.

Developments in EU Courts

In December 2025, the Court of Justice of the European Union rendered 10 judgments (six of which related to Russia sanctions) under a variety of sanctions programs. These include:

• Judgment of the General Court of 17 December 2025 in Rotenberg v Council (Case T-268/24), dismissing an action under the Russia-Ukraine sanctions regime.

• Judgment of the General Court of 17 December 2025 in Melnichenko v Council (Case T-1114/23), dismissing an action under the Russia-Ukraine sanctions regime.

• Judgement of the General Court of 17 December 2025 in Melnichenko v Council (Case T-1113/23), dismissing an action under the Russia-Ukraine sanctions regime.

• Order of the General Court of 15 December 2025 in Douamba v Council (Case T-143/25) dismissing an action under the Russia hybrid threat sanctions regime.

• Judgment of the General Court of 10 December 2025 in Pumpyanskiy v Council (Case T-369/24), dismissing an action under the Russia-Ukraine sanctions regime.

• Judgement of the General Court of 10 December 2025, in Middle East Bank, Munich Branch v Commission (Case T-518/23) dismissing an action brought against a Commission decision adopted under the EU Blocking Statute.

• Judgment of the General Court of 3 December 2025 in UC v Council (Case T-72/24), dismissing an action under the DRC sanctions regime.

• Judgement of the General Court of 3 December 2025, in Foz v Council (Case T-414/24), dismissing an action under the Syria sanctions regime.

• Judgement of the General Court of 3 December 2025 in Timchenko v Council (Case T-285/24), dismissing an action under the Russia-Ukraine sanctions regime.

• Judgement of the General Court of 3 December 2025, in Timchenko v Council (Case T-1107/23), dismissing an action under the Russia-Ukraine sanctions regime.

Concerning references for preliminary rulings, as of the end of 2025, there were approximately 20 cases related to EU sanctions pending before the Court of Justice. These cases concern a broad range of interpretative issues in both the financial and sectoral sanctions context.

Economic Security Updates

Joint Communication

On 3 December 2025, the Commission published a Joint Communication on strengthening Economic Security. The Commission identified six priority high-risk areas to “be more strategic in leveraging its economic weight and the access to its Single Market”:

• Reducing strategic dependencies for goods and services;

• Attracting safe investment into the EU;

• Supporting a vibrant European defence and space industry, and other critical industrial sectors;

• Securing EU leadership across critical technologies;

• Protecting sensitive information and data;

• Shielding Europe’s critical infrastructure.

Revision of FDI Screening Framework

On 11 December 2025, the Council and the European Parliament reached a provisional political agreement on the revision of the foreign direct investment (FDI) screening regulation. The updated framework aims to strengthen the EU’s ability to identify, assess and address risks posed by certain foreign investments. The minimum scope includes:

• Dual-use items and military equipment

• Hyper-critical technologies,

• Critical raw materials;

• Critical entities in energy, transport and digital infrastructure, based on a risk-based assessment;

• Electoral infrastructures;

• A limited list of financial system entities.

SAFE Instrument & Canada

On 19 December 2025, Member States endorsed a bilateral agreement with Canada under the ‘Security action for Europe’ (SAFE) regulation. Canada will be the first non-European country to participate in the SAFE instrument, the €150 billion defence instrument that supports those EU member states that wish to invest in defence industrial production through common procurement, focusing on priority capabilities.

The Podcast

This Month in EU Sanctions is also a podcast.. Catch up on recent episodes with:

• Celia Challet on the growing role of references for preliminary rulings in EU sanctions;

• dr Marcin Lukowski, CGSS on the Polish framework for sanctions implementation and enforcement;

• Ingrid Breit on the directive on definition of criminal offences and penalties for the violation of EU;

• Jan Lepeu on the history of EU sanctions;

• Jeff Nielsen and Gonzalo Saiz on the rise of ancillary listings in EU sanctions;

• Saskia Rietbroek, CSS on the evolution of the EU trade compliance community.

Tune in soon for the next episode. The podcast is available on all platforms.

Looking Ahead

• On 1 January 2026, Cyprus will begin its six-month Presidency of the Council

• Foreign Affairs Council, 29 January 2026

• Foreign Affairs Council, 23 February 2026

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On 12 December 2025, the Council of the European Union (“Council”) took decisive action. Relying on Article 122 of the Treaty on the Functioning of the EU (“TFEU” or “Treaty”), it adopted Council Regulation (EU) 2025/2600 on emergency measures addressing the serious economic difficulties caused by Russia’s actions in the context of the war of aggression against Ukraine (“Regulation 2025/2600”) targeting the assets of the Russian Central Bank (“RCB”) within EU jurisdiction.

Declaring an economic crisis arising out of Russia’s actions, the Council complemented existing sanctions against the RCB with a regulation that imposed transfer restrictions on RCB assets. The regulation temporarily prohibits

“[...] any direct or indirect transfer of assets or reserves of the Central Bank of Russia, or of any legal person, entity or body acting on behalf of, or at the direction of, the Central Bank of Russia, such as the Russian National Wealth Fund.”

By framing the consequences of Russia’s war as an economic crisis, the EU has established a temporary, durable and self-sustaining mechanism to reinforce its sanctions architecture while protecting core economic interests. This briefing explores the legal and policy implications of this landmark decision.

The Immobilisation of RCB Assets in the EU

On 28 February 2022, the Council adopted the third package of sanctions against Russia. That set of measures, adopted under Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (“Regulation 833/2014”), introduced a comprehensive ban on transactions related to the management of reserves as well as of assets of the RCB.

Approximately EUR 210 billion of RCB assets were immobilised in the EU. The primary aim of the measures adopted under Regulation 833/2014 was to prevent the RCB from accessing its substantial foreign reserves held in the EU. While Regulation 833/2014 effectively immobilised RCB assets by prohibiting transactions, it did not establish a general prohibition on asset transfers as such.

As the immobilised assets began to generate revenue (yielding around EUR 2.5-3 billion a year), the EU adopted instruments to use the proceeds of those assets to fund military and financial assistance to Ukraine. Recital 35 of Council Regulation (EU) 2024/1469 of 21 May 2024 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine noted:

“The restrictive measures linked to the prohibition of transactions related to the management of the assets and reserves of the Central Bank of Russia should remain in place until Russia ceases its war of aggression against Ukraine and compensates Ukraine for the damage caused by this war” (emphasis added).

This position was reiterated in subsequent European Council conclusions and reflected in secondary legislation, including the Ukraine Loan Cooperation Mechanism adopted on 24 October 2024. Thus, the RCB transaction ban is intended to remain in place for as long as the sanctions are in force, which requires periodic renewal by unanimous approval of the Member States.

What is Article 122 of the TFEU?

EU law does not foresee the possibility of formally declaring a state of emergency to suspend ordinary EU law-making procedures and take exceptional executive action. Instead, several treaty provisions allow the EU to respond to specific categories of emergencies.

Emergency Economic Powers

Article 122 TFEU, part of Title VIII on Economic and Monetary Policy, empowers the Council, acting on a proposal from the European Commission (“Commission”) and by qualified majority, to swiftly adopt measures appropriate to severe economic difficulties. Acts under Article 122 are non-legislative, temporary, and situational, distinguishing them from ordinary EU law and do not require the involvement of the European Parliament.

The Council enjoys broad discretion in determining what constitutes an economic situation requiring intervention. However, the Court of Justice of the EU (“CJEU”) has emphasised that Article 122 is intended for urgent, situational responses, which must be distinguished from permanent or structural solutions. In essence, Article 122 TFEU serves as a tool for temporary, targeted crisis management.

Article 122 TFEU in Practice

The origins of Article 122 TFEU trace back to the Treaty of Rome. The use of Article 122 TFEU, however, has expanded significantly in recent decades, reflecting its increasing importance as a tool for addressing exceptional circumstances. It has taken a prominent role because of multiple crises that the EU has faced, particularly over the last 15 years. Examples include:

• 2010 | Eurozone crisis — Council Regulation 407/2010 establishing the European Financial Stabilisation Mechanism;

• 2016 | Migration crisis — Council Regulation 2016/369 on the provision of emergency support within the Union;

• 2020 | COVID-19 crisis — emergency support and recovery instruments, including SURE (Council Regulation 2020/672) and NextGenerationEU (Council Regulation 2020/2094);

• 2022 | Russia-induced energy crisis — a series of emergency regulations addressing gas demand reduction, energy prices, joint gas purchasing, renewables deployment, and market correction mechanisms (Council Regulations 2022/1369, 2022/1854, 2022/2576–2578);

• 2022 | Russia-induced defence and security crisis — the SAFE instrument addressing the security and defence consequences of Russia’s war of aggression against Ukraine (Council Regulation 2025/1106).

Thus, even before the 12 December 2025 action, Article 122 TFEU was relied upon to counter the weaponization by Russia of energy supplies and the security threat (SAFE). Alongside sanctions which pursue Common Foreign and Security (“CFSP”) objectives, the EU turned to Article 122 of the TFEU to address the war’s systemic economic effects.

Economic Rationale for Regulation 2025/2600

On 3 December 2025, the Commission unveiled two proposals to support Ukraine’s financing needs in 2026-2027. As part of that initiative, the Commission proposed Regulation 2025/2600. The proposal frames Russia’s war as an existential economic threat, justifying the use of Article 122 TFEU on five main economic grounds.

1. Russia’s war of aggression against Ukraine has inflicted severe macroeconomic shocks across the EU. The conflict has resulted in 1.9% lower GDP growth (2022–2023) compared to pre-war projections, with bordering Member States experiencing an even sharper decline of 1.4–1.8% below the EU average. These economic disruptions stem from supply chain breakdowns, soaring energy and food prices, and a decline in investment and consumer spending, collectively undermining the EU’s economic stability and confidence.

2. The war has also placed unprecedented fiscal and market strain on the EU. Member States have spent over EUR 365 billion (2022–2024) to mitigate the economic and social fallout of high energy prices, while the EU has redirected significant budgetary resources away from long-term priorities. Hosting 4.3 million Ukrainian refugees has cost the EU ~0.2% of GDP annually, with total fiscal costs potentially exceeding EUR 155 billion (2022–2025). Defence spending has surged from 1.5% to a projected 2.0% of GDP by 2027 (EUR 405 billion), further diverting funds from critical areas like infrastructure, education, and social programs. Meanwhile, Russia’s seizure of EU-owned assets, capital restrictions, and retaliatory taxes have distorted investments and markets, increasing risks and economic uncertainty.

3. The conflict has further disrupted energy and commodity markets, creating additional layers of economic instability. Russia’s invasion spiked global oil, gas, and food prices, disrupting EU supply chains and raising production costs for industries reliant on Ukrainian exports, such as cereals and vegetable oils. The EU’s REPowerEU initiative, aimed at accelerating the green transition and reducing energy dependence, required EUR 20 billion in additional funding. Simultaneously, shortages of metals and raw materials—exacerbated by the war and Russian retaliatory measures—have increased costs for EU industries, deepening the economic toll of the conflict.

4. Beyond direct economic damage, Russia’s hybrid warfare tactics—including sabotage, cyber-attacks, disinformation campaigns, and airspace violations—have destabilised EU economies. These actions have been documented in Belgium, the Netherlands, Poland, Romania, Denmark, Estonia, Germany, Lithuania, and Latvia, creating prolonged economic uncertainty and increasing fiscal burdens. The persistent threat of hybrid attacks not only heightens instability but also risks prolonging the war’s financial and humanitarian consequences for the EU.

5. A Ukrainian defeat could trigger further economic and security challenges for the EU. Such an outcome would likely lead to additional GDP losses, particularly in bordering Member States, alongside increased refugee flows and higher defence spending. This scenario would deepen the EU’s economic and security challenges, exacerbating the already significant fiscal and humanitarian burdens imposed by the conflict.

The proposal then underscored that the urgency and justifications for invoking Article 122 TFEU stem from the exceptional, external nature of the crisis, which lies beyond Member States’ control.

Regulation 2025/2600

Objectives

Regulation 2025/2600 leverages economic emergency powers to achieve sanctions-like effects against the RCB. By characterising the conflict as an economic emergency, the EU justified the adoption of urgent, Union-wide measures to mitigate the war’s far-reaching consequences for the EU’s economic stability. The regulation’s recitals explicitly underscore this rationale, stating that

“[…] given the proximity of the Union to Russia’s war and Russia’s actions against the Union, the Union’s economy has been affected and is expected to continue to be affected as long as Russia persists in its war of aggression” (emphasis added).

Moreover, Regulation 2025/2600 warns that the EU’s economic situation would deteriorate even further should the conflict in Ukraine escalate, reinforcing the need for decisive action.

The Article 122 TFEU measures are “without prejudice” to the sanctions adopted under Regulation 833/2014 (Regulation 833/2014 does not include a prohibition on RCB asset transfer). While complementary in effect, these two regulations rest on separate legal bases and address distinct, albeit overlapping dimensions of the same crisis.

Regulation 2025/2600 ensures that the immobilisation of assets is maintained as long as Russia’s actions pose substantial risks to the EU’s economic stability.

Provisions

At its core, the regulation introduces two principal measures.

• First, it prohibits any direct or indirect transfer of assets or reserves held by the RCB or related entities, such as the Russian National Wealth Fund. This comprehensive ban ensures that immobilised assets cannot be repatriated to Russia or used to finance its war machine or hybrid attacks against the EU.

• Second, it mandates that cash balances generated by these immobilised assets be managed separately, potentially directing them to a Reparations Loan or other special purpose.

This approach allows the EU to provide critical financial aid to Ukraine while preserving its own economic stability.

Temporary but Condition-based

Regulation 2025/2600 establishes a temporary but condition-based framework. Recital 26 notes:

“[t]he prohibition on transfers of the assets and reserves of the Central Bank of Russia or related entities is temporary, reversible and under periodic review” (emphasis added).

Its duration is explicitly tied to three conditions, as outlined in Article 6(2). The measures will remain in force until the following three conditions are met.

1. Russia ceases its war of aggression against Ukraine (Article 6(2)(a)).

2. Russia provides reparations to Ukraine to the extent necessary for reconstruction, without adverse economic or financial consequences for the EU (Article 6(2)(b)); and

3. Russia’s actions no longer pose a serious risk of severe economic difficulties to the Union and its Member States (Article 6(2)(c)).

Regulation 2025/2600 embeds a built-in review mechanism to ensure continued proportionality and adequacy. By 31 December 2026, and annually thereafter, the Commission is required to review the operation of the Regulation 2025/2600 and report its main findings to the Council.

This review must specifically assesses whether the continued availability of significant financial resources to Russia would still pose, or risk posing, serious economic difficulties for the EU and its Member States, and whether the threat of further deterioration of the EU’s economic situation persists. This periodic reassessment reinforces the temporary, condition-based nature of the measures and anchors their continuation in an ongoing evaluation of economic risk.

Policy Implications

The 12 December 2025 action has at least three immediate policy consequences:

1. Asset control and leverage: Regulation 2025/2600 preserves EU jurisdiction over immobilised Russian assets for potential reparations or aid to Ukraine.

2. Signalling effects: The action demonstrates commitment to Ukraine, signals long-term EU resolve to Russia, and affirms EU authority to external partners, beginning with the United States.

3. Institutional precedent: The decision confirms Article 122 TFEU as a viable tool for addressing security threats with severe economic consequences.

However, the use of Article 122 TFEU in this context may face legal challenges from Member States or stakeholders concerned about the expansion of EU competences. Critics could argue that this broad application risks undermining the distinction between economic policy and foreign affairs or that Regulation 2025/2600 avoids CFSP unanimity requirements.

Conclusion

The objectives pursued by Regulation 2025/2600 are narrowly tailored to the urgent protection of the EU’s economic stability from the consequences of Russia’s territorial conflict, high-intensity warfare, and hybrid attacks.

This is not the first time the EU has relied on economic instruments to advance foreign policy objectives. In response to Russia’s war of aggression, the EU has also adopted, by qualified majority, increased tariffs on certain Russian and Belarusian goods. These trade measures aim to reduce strategic dependencies and constrain the war economy of Russia and of third countries involved in the aggression against Ukraine, illustrating the growing role of trade law as a dimension of external action.

What sets Regulation 2025/2600 apart is its measured and condition-based use of economic emergency powers under Article 122 TFEU to respond to a foreign security threat. By complementing existing CFSP sanctions, Regulation 2025/2600 introduces a temporary yet self-sustaining mechanism. Its duration is legally contingent on clear conditions—namely, the cessation of Russia’s aggression, the provision of reparations, and the elimination of economic risks to the EU—ensuring that the response remains proportionate, targeted, and reversible.

This innovation is not without risks. The expanded use of economic emergency powers inevitably raises questions about institutional balance and the boundaries between economic governance and foreign policy. The European Parliament has challenged the choice of Article 122 TFEU as the legal basis for the SAFE Regulation before the CJEU, and some Member States may decide to pursue similar challenges.

In a context characterised by overlapping economic, security, and hybrid threats, the urgency and exceptional nature of the crisis provide a compelling justification for this measured and condition-based temporary use of Article 122 TFEU. Regulation 2025/2600 thus reflects an EU adapting its legal toolkit to contemporary conflict while remaining anchored in Treaty constraints.

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EU Responses to the U.S.-led Peace Initiative

As November 2025 drew to a close, the U.S.-led initiative to negotiate an end to the war in Ukraine dominated international headlines. In this context, a key question arose for policymakers, businesses, and compliance professionals: What does the EU’s response to the proposed plan mean for the future of EU sanctions against Russia?

Following the informal EU Leaders’ meeting of 24 November 2025 in Luanda, European Council President António Costa noted:

It is also clear that the issues that concern directly the EU, such as sanctions, enlargement or immobilised assets, require the full involvement and decision by the EU.

In a speech during the European Parliament plenary debate on the EU position on the proposed plan and EU engagement towards a just and lasting peace for Ukraine on 26 November 2026, Ursula von der Leyen stressed:

This is why Europe must keep up the pressure on Russia – until there is a just and lasting peace.

In a similar vein, following the informal 26 November 2026 Foreign Affairs Council, HR VP Kaja Kallas emphasized that:

To secure the best outcome for Ukraine and Europe, we have to stay the course but pick up the pace. This means more sanctions to deprive Russia of the means to fight and more military and financial support to Ukraine.

A possible 20th package of EU sanctions against Russia is reportedly already under preparation and could be presented in the coming weeks.

Other Recent EU Sanctions Developments

Russia

On 20 November 2025, the Council of the European Union (”Council”) imposed sanctions on an additional ten individuals under the EU’s Russia human rights sanctions regime.

The Council adopted a comprehensive 19th package of EU sanctions on 23 October 2025. European Council conclusions, issued the same day, noted:

The European Union is determined to maintain and increase its pressure on Russia to stop its brutal war of aggression, including through further sanctions. In this context, the European Council welcomes the adoption of the 19th package of sanctions. The European Council also underlines the importance of further coordination with G7 partners on sanctions, and of reinforcing the anti-circumvention measures.

On 3 October 2025, the Council extended its measures against those responsible for Russia’s destabilising actions abroad by one year, until 9 October 2026, in light of Russia’s continued hybrid activities, including Foreign Information Manipulation and Interference (FIMI) against the EU and its member states and partners.

Moldova

On 27 October 2025, the Council extended the sanctions regime targeting the leadership of the Transnistrian region of the Republic of Moldova, for another year, until October 31, 2026.

ISIL/Da’esh and Al-Qaeda

On 27 October 2025, the Council renewed the autonomous EU sanctions against ISIL/Da’esh and Al-Qaeda and persons, groups, undertakings and entities associated with them, extending their duration for a further year, until 31 October 2026.

Belarus

On 29 October 2025, the High Representative issued a statement on behalf of the EU on Belarus’ hybrid actions at the EU external border. It noted, in relevant parts:

Sanctions on the Belarusian regime have been imposed, and the EU is prepared to take further appropriate measures should such actions continue. We will not tolerate any hybrid campaigns directed against the EU or any of its member states.

Chemical Weapons

On 13 October 2025, the Council decided to prolong the application of individual restrictive measures against the proliferation and use of chemical weapons by another year, until 16 October 2026.

Niger

On 17 October 2025, le Council extended the sanctions in view of the situation in Niger by another year, until 24 October 2026.

Compliance Guidance

In October and November 2025, the European Commission (the “Commission”) published FAQs regrading:

• Article 3ra (Import ban on liquified natural gas (LNG))

• Article 5ae (Infrastructure transaction ban)

• Article 5aa State-owned enterprises

• Article 3ma (Import ban on refined products obtained from Russian crude oil)

• Articles 3m and 3n (Oil imports)

• Articles 2, 2a and 2b (Export-related restrictions for dual-use goods and advanced technologies)

Dual-Use Export Controls

On 14 November 2025, the Commission published the 2025 update of the EU control List of dual-use items. The Commission had adopted Delegation Regulation 2025/2003 amending Regulation (EU) 2021/821 on 8 September 2025. The updates concerns:

• Quantum technology: Quantum computers, electronic components designed to work at cryogenic temperatures, parametric signal amplifiers, cryogenic cooling systems, cryogenic wafer probers.

• Semiconductor manufacturing and testing equipment and materials: Atomic Layer Deposition equipment, equipment and materials for epitaxial deposition, lithography equipment, Extreme Ultra-Violet pellicles, masks and reticles, Scanning Electron Microscope equipment, etching equipment.

• High-performance Integrated Circuits: Advanced computing integrated circuits such as field programmable logic devices (FPLD).

• High-Temperature Coatings: materials for extreme thermal environments.

• Additive manufacturing: 3D printing systems for metals and associated materials (e.g., high entropy alloy or refractory metal and alloy powders).

• Peptide synthesizers: equipment used in biotechnology for the synthesis of peptides.

• Modification of certain control parameters and update of certain technical definitions and descriptions.

The updated regulation entered into force on 15 November 2025. On 14 November 2025, the Commission hosted its 2025 Export Control Forum in Brussels. Watch the event here. On 17 October 2025, the European Parliament published a briefing on dual-use export controls.

Select Developments in EU Courts

EU courts rendered several judgements in matters related to EU sanctions. Of particular interest in the de-listing context is the Judgement of the General Court of 26 November 2025 in SBK Art OOO v Council of the European Union.

In Case C-538/25, Flugzeugherstellerin, the Austrian Federal Administrative Court submitted to two questions related to dual-use export controls.

1 ) What circumstances are to be taken into account when assessing whether an item can be used also ‘for … military purposes’ in accordance with point 1 of Article 2 of Regulation (EU) 2021/821.

2. Does Article 207 TFEU, read in conjunction with Article 10 of Regulation (EU) 2015/479 of the European Parliament and of the Council of 11 March 2015 on common rules for exports, or any other provision of EU law permit the application of a national legal provision for the purpose of examining and, as the case may be, prohibiting the export of an item to a third country on the ground of human rights considerations, regardless of whether the item concerned is a dual-use item in accordance with point 1 of Article 2 of Regulation (EU) 2021/821?

The request was filed in August but published in the 17 November 2025 edition of the Official Journal.

Looking Ahead

• 15 December 2025 – Foreign Affairs Council

• 18-19 December 2025 – European Council

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