European sanctions have changed substantially in recent years. While the first large-scale packages adopted after February 2022 targeted primarily Russian companies, individuals, and specific sectors of the economy, one of the main priorities for European regulators today is countering sanctions circumvention through third countries.
This is why, for international business, the question is no longer simply whether a company has counterparties in Russia. A more important question has emerged: could a European regulator or counterparty view the supply chain in use as a means of circumventing sanctions restrictions?
Notably, the EU’s 21st sanctions package has still not been finalised. The European Commission presented it in early June 2026, but its adoption has repeatedly been delayed due to disagreements among EU member states.
At the same time, sanctions pressure continues to intensify outside the framework of comprehensive sanctions packages. In June 2026, the Council of the EU adopted a separate package of personal sanctions against 34 individuals and 47 organisations. The restrictions affected not only Russian persons but also companies registered in China, Turkey, the UAE, Azerbaijan, Liberia, and Hong Kong.
In addition, in mid-July the EU member states’ foreign ministers agreed to add roughly 250 more individuals and legal entities to the sanctions lists. This is the largest single expansion of the lists in the history of the restrictions. The decision was adopted as an interim measure while negotiations on the 21st package as a whole continue.
The direction of further sanctions policy is already clear: countering circumvention schemes, tightening scrutiny of intermediaries, and raising transparency requirements for international supply chains.
Why third countries in particular
Following the introduction of large-scale restrictions, European exports to Russia have fallen substantially.
At the same time, supplies of certain categories of goods have increased to states that traditionally maintain active trade ties with the Russian market. This applies to countries in Central Asia, the Caucasus, the Middle East, and certain other Asian jurisdictions.
Growth in trade with such states does not, by itself, indicate a sanctions violation.
However, such supply chains are under increased scrutiny from European authorities, banks, and market participants. The analysis covers not only the immediate recipient of the goods, but also their further movement, the structure of the transaction, the economic purpose of the operation, and the actual end user.
Particular attention is paid to cases where:
- the volume of purchases significantly exceeds the importer’s usual needs;
- the goods do not match the buyer’s business profile;
- recently established companies are involved in the transaction;
- complex or economically unexplainable delivery routes are used;
- reliable information on the end use of the goods is unavailable;
- payments are made through several banks or intermediaries in different jurisdictions.
As a result, companies working simultaneously with European suppliers and the Russian market are increasingly facing additional questions from banks, insurers, logistics operators, and foreign counterparties.
How sanctions controls are changing
Several stable trends have emerged in European sanctions policy.
First, the list of third-country companies that, in the EU’s assessment, supply goods to the Russian military-industrial complex or assist in circumventing existing restrictions is expanding. Legal entities registered outside Russia are increasingly being added to the sanctions lists.
Second, scrutiny of intermediaries is increasing. Where verification once often focused on the direct buyer or supplier, the analysis can now cover the entire transaction chain, including trading intermediaries, carriers, banks, payment routes, and actual end users.
Third, European companies are tightening controls over their foreign partners. For them, the risk relates not only to possible measures by state authorities, but also to commercial consequences: blocked payments, banks refusing service, suspended deliveries, terminated contracts, and internal investigations.
As a result, European counterparties’ sanctions compliance requirements are effectively extending far beyond the territory of the European Union. A company from a third country may not be formally required to comply with EU legislation, but without evidence of transaction transparency it risks losing a European supplier, bank, or logistics partner.
What may be included in the 21st package
At the time of writing (19 July 2026), the final version of the 21st package has not been approved, and negotiations among EU member states continue. Certain measures originally proposed may be amended or dropped during the negotiations. The next attempt to approve the package is scheduled for the meeting of the EU Committee of Permanent Representatives (Coreper) on 22 July 2026, the last such meeting before the EU institutions’ summer recess.
The main directions of the draft include:
- expanding the sanctions lists of individuals and legal entities, including additional vessels the EU classifies as part of the so-called shadow fleet;
- further restricting Russia’s oil revenues, including decisions on the oil price cap mechanism;
- additional measures targeting Russian LNG and related maritime services;
- new restrictions on the banking and financial sector, including bans on operations with banks located in Russia and in certain third countries;
- measures targeting crypto-asset infrastructure, including possible restrictions on providing crypto services to certain third countries;
- a ban on imports of fish products – originally proposed by the European Commission but dropped from the draft package during negotiations among EU member states in July 2026;
- additional measures against sanctions circumvention through third countries.
The European Commission’s original proposal included, among other things, extending the transaction ban to 31 Russian banks and 20 third-country organisations, including banks, crypto platforms, and oil traders, as well as a transaction ban covering 11 crypto platforms.
Even if some proposals are softened, the overall direction of European sanctions policy is likely to remain unchanged.
What this means for business
Companies operating through Kazakhstan, the UAE, Turkey, Uzbekistan, China, and other third countries are increasingly regarded by European counterparties as participants in transactions carrying elevated sanctions risk.
This does not mean that working with such companies is becoming impossible, or that it is in itself evidence of sanctions circumvention.
However, European partners and banks may request:
- information on the origin of goods;
- information on end buyers and end users;
- a description of logistics and payment routes;
- the company’s ownership and control structure;
- confirmation of the absence of ties to sanctioned persons;
- contractual undertakings prohibiting re-export to Russia or other prohibited jurisdictions;
- internal sanctions compliance policies and procedures;
- documents confirming actual delivery and use of the goods.
The absence of such documents may lead to a transaction being suspended, even where no direct legal prohibition applies.
A clear, documented system of internal controls is therefore becoming not only a way to reduce legal risk, but also a practical condition for maintaining access to European suppliers, banks, and logistics operators.
What to check now
Businesses involved in international supply chains should conduct an internal review of their most sensitive areas of activity before the 21st package is adopted.
In particular, it is worth assessing:
- whether intermediaries from third countries are used in transactions;
- whether the intermediary’s profile matches the nature and volume of the supplies;
- whether further re-export of goods to Russia is possible;
- whether the chain includes dual-use goods, industrial equipment, electronics, or other products carrying elevated sanctions risk;
- whether the actual end user has been identified;
- whether documents confirming the end use of the goods are available;
- whether the owners, directors, and controlling persons of counterparties are being verified;
- whether contracts contain sanctions representations, resale restrictions, and a right to terminate deliveries;
- whether the sanctions compliance system in place meets the requirements of banks and key foreign partners.
The review may show a need to amend contract terms, delivery routes, the set of supporting documents, or transaction approval procedures.
Such an audit helps identify potential risks before they lead to a blocked payment, a suspended delivery, a terminated contract, or additional requests from foreign counterparties.
The defining feature of the EU’s current sanctions policy is not only the continuous expansion of the list of restrictions, but also tighter control over international supply chains.
The subject of scrutiny is no longer just the immediate counterparty, but the entire structure of the foreign trade transaction: the origin of the goods, intermediaries, the delivery route, the movement of funds, and the actual end user.
For business, this means that sanctions compliance is gradually ceasing to be a one-off counterparty check and is becoming a permanent element of managing foreign trade and financial risk.