On 23 July 2026, the European Union adopted its 21st package of restrictive measures against Russia. The package is one of the most extensive rounds adopted in recent years and includes measures targeting a number of Russian economic sectors.

The package is once again particularly relevant for the shipping sector. Pertinently this package continues the EU’s strategy of targeting not only Russian cargoes and entities, but also the wider infrastructure that supports Russian trade. Maritime service providers should therefore treat the package as a further escalation in compliance expectations as will be further discussed below.

The cornerstone of the 21^st Package is the introduction of Article 3qa which seeks to prevent Russia from expanding its LNG transportation capacity. Whilst it does not immediately prohibit the sale of LNG tankers transparency and monitoring regime is put in place together with a legal framework for the possibility of a future ban.

By the introduction of article 3qa any sale or transfer of ownership of an LNG tanker by (i) an EU national; (ii) a person residing in an EU Member State; or (iii) a legal entity established in the EU to any third country person must be immediately notified to the competent authority of the relevant Member State. The notification must contain detailed information including the identity of the seller and purchaser; ownership and management information relating to both parties and vessel particulars. Member States must then share this information with the Commission and other Member States within one week.

The information collected through the notification regime will be reviewed by the Commission and, by 25 October 2026 it will decide whether a full prohibition on the sale of LNG tankers should enter into force. Should the Council opt to proceed with an escalation of sanctions then by a further Regulation it may activate the prohibitions introduced by this 21st package and found in Article 3qa(4) to (10).

Essentially if introduced it shall be prohibited for EU persons and entities to sell or otherwise transfer ownership of LNG tankers directly or indirectly to any person in Russia or for use in Russia. EU persons and entities shall be obliged to (i) identify and assess the risk of onward diversion to Russia; (ii) implement policies and procedures designed to mitigate that risk; and (iii) conduct due diligence proportionate to the nature and size of its business where a LNG tanker is sold to a party in a third country. Third-country purchasers shall be required to provide information necessary for the seller’s risk assessment.

This is pertinent as (once introduced) EU persons must not only merely screen the purchaser prior to transacting but it must actively consider whether the vessel could ultimately be transferred onwards to Russia, this is similar to the obligations already introduced in relation to oil tankers in article 3q. Article 3qa also introduces mandatory contractual safeguards. Contractually, any sale of an LNG tanker by an EU seller to a third-country purchaser must contain a contractual prohibition preventing any further resale or transfer of the vessel to a person in Russia or for use in Russia. The purchaser must also undertake to replicate the prohibition in any subsequent sale; and require future buyers to continue imposing equivalent restrictions. The EU has designed a mechanism to effectively create a contractual chain of compliance designed to follow the vessel through subsequent transfer. Notwithstanding this the recitals clarify that EU person should not be held responsible for a later breach committed by a purchaser where the seller acted in good faith; and had no information suggesting an intention to circumvent the Regulation. Liability for a subsequent breach rests with the third-country buyer that violates the contractual restrictions.

One of the most significant new measures introduced by the EU is with its decision to suspend (for a full year until July 2027) the adaptation of the price cap regime agreed in the 18th sanctions package. Broadly speaking within the 18^th sanctions package the EU lowered the oil price cap for crude oil from 60 to 47.6 USD per barrel whilst introducing an automatic and dynamic mechanism to ensure that the cap is always 15% lower than the average market price. Fearing that Russia might be benefitting from the closure of the Strait of Hormuz and to ensure that sustained economic pressure is maintained the EU has paused the automatic adjustment of the oil price cap mechanism for a period of one year meaning that oil price cap shall remain at 47.6 USD per barrel.

Naturally, irrespective of the measure introduced by the 21^st package all other obligations on maritime operators related to the price cap regime remain applicable wherever EU persons or EU-linked services are involved in the maritime transport of Russian-origin crude oil.

Whilst the 21^st package does not alter the core prohibition on the purchase, import or transfer of Russian-origin crude oil and petroleum products found in article 3m the package addresses the disposal of Russian-origin crude oil and petroleum products. Article 3m(11) empowers Member State competent authorities to authorise inter alia the import, transfer, storage, management and disposal of such products that have been seized or confiscated in enforcement proceedings. The derogation extends to related services, including technical assistance, brokering, financing and financial assistance. The derogation applies provided that (i) the cargo had been seized or confiscated by a Member State authority during national administrative or judicial proceedings, (ii) the cargo remains under the effective control of Member State authorities (or an entity acting on their behalf) while being stored, managed or disposed of and (iii) no funds or economic resources are made available, directly or indirectly, to Russian persons or entities.

The raison d’etre behind this derogation is to remove any uncertainty as to whether authorities could lawfully import, store, transfer or sell confiscated Russian oil without breaching Article 3m itself. In practice the amendment to Article 3m enables national competent authorities to dispose safely of Russian oil cargos they seize and confiscate.

Russia’s so-called “shadow fleet” has become one of the defining challenges of maritime sanctions enforcement. The fleet consists largely of ageing tankers operating through opaque ownership structures and outside the traditional insurance and compliance framework, often employing deceptive shipping practices such as AIS manipulation and ship-to-ship transfers. Maritime operators must be vigilant by carrying our appropriate due diligence checks particularly when they encounter any red flags.

The European Union has pursuant to the 21st package expanded their sanctions against shadow fleet vessels, with the total number of EU-listed vessels reaching 673 with the introduction of 41 more vessels in light of the latest sanctions package. For shipowners, charterers, financiers, insurers, bunker suppliers and brokers, the key takeaway is that vessel screening should not be limited to sanctions list checks. Due diligence increasingly requires examination of ownership and management structures; vessel name and flag history and information such as trading routes; and ship-to-ship transfer records amongst other.

The 21st package deepens the existing sanctions landscape. Its core message is that the EU will continue to target the mechanisms that allow Russian trade to continue, particularly shadow fleet vessels, payment channels, energy revenues and sanctions circumvention networks.

For maritime stakeholders, the practical consequence is clear: sanctions compliance must be dynamic, transaction-specific and documented. The risk analysis should no longer stop at the identity of the contractual counterparty or the vessel’s flag. It should cover the cargo, price, payment route, vessel history, beneficial ownership, contractual chain and any third-country circumvention indicators.

Shipping remains central to the enforcement of Russian sanctions. The 21st package confirms that maritime actors will remain under close regulatory scrutiny and should continue to strengthen their compliance systems accordingly.

Should you require any further information or assistance on the matter, please do not hesitate to reach out on adrian.attard@fenechlaw.com / matthew.cassar@fenechlaw.com