The EU 15th Sanctions Package Targets Russia’s Shadow Fleet, Protects EU Firms, and Supports Exit From Russia’s Financial Market
On 16 December 2024, the European Council adopted its 15th sanctions package against Russia, aiming to crack down further on Russia’s shadow fleet and prevent sanctions circumvention.
The new package adds 52 vessels to the list, bringing the total to 79. These non-EU vessels are banned from accessing EU ports or receiving services within the EU. The targeted vessels have been found to:
- Belong to Sovcomflot, which is already under sanctions by the entire Coalition.
- Belong to key Dark Fleet actors (Major Russian Dark Fleet Actors as discussed further below), such as Radiating World and Beks.
- Engage in high-risk shipping of Russian oil and petroleum products, arms deliveries, and grain theft.
The aim is to increase the cost for Russia to operate these vessels, as they can no longer conduct business as usual in the EU or with EU operators.Staying ahead of bad actors is challenging. Many entities exhibit signs of illicit activity well before being listed on official sanction lists, but confirming whether these truly point to sanctions evasion can be complex.
To address this, Pole Star Global and Blackstone Compliance Services‘ Deep Blue Intelligence (DBI) team have enhanced sanctions data with additional insights to flag high-risk vessels.
In light of the EU’s 15th sanctions package, Pole Star Global and DBI have delivered the following results.
Pole Star Global’s PurpleTRAC Users Were Alerted Early to Vessels Linked to Sovcomflot Through Ownership Screening
Further Insights by Pole Star Global and Deep Blue Intelligence
For example, the ownership structure of the sanctioned Barbados-flagged vessel Sirius is detailed in Pole Star Global’s PurpleTRAC. PurpleTRAC identifies Sovcomflot as Sirius’s Group Beneficial Owner (see Figure 1). Vessels owned by Sovcomflot were subject to sanctions by the US, UK, and EU, well before the EU’s 15th sanctions package.
Figure 1: Ownership Structure of the EU-Sanctioned Vessel Sirius Revealed Sovcomflot as the Group Beneficial Owner Prior to the Ship’s Official Sanctioning
Image provided by Pole Star Global
Deep Blue Intelligence (DBI) Users Are Fully Protected From the EU’s Recent Designations
100% of the affected vessels were already on DBI’s lists prior to the EU sanctions. Nearly all of these newly designated vessels were on DBI watchlists when DBI went live in June 2023.
Further Insights by Pole Star Global and Deep Blue Intelligence
Pole Star Global and DBI insights have identified ten companies, primarily in Turkey and the UAE, that have rapidly built a fleet of 251 tankers servicing Russian markets. Known as Major Russian Dark Fleet Actors (MRDF), at least 166 of these tankers frequently visit Russian oil terminals or conduct ship-to-ship transfers in hubs for Russian crude.
The report Crude Measures: How Russia’s Dark Fleet Evades Sanctions by Pole Star Global and DBI explores how these MRDFs exploit sanction loopholes, making compliance challenging. Key tactics include restructuring ownership and management to sidestep sanctions targeting companies but not vessels. This approach creates the appearance of new management.
For example, Beks Ship Management and Trading is a Turkish company that was sanctioned by the UK in February 2024. Beks was also flagged by OFAC for likely price cap circumvention.
Although the company has been operating since 2015, it acquired 31 out of its 46 tankers (67%) after Russia invaded Ukraine. Then, following UK sanctions, Beks reorganised its fleet by:
- Shifting ownership: Transferring its fleet to National Maritime Inc., a Marshall Islands company, within a week.
- Changing management: Assigning 21 tankers to three Turkish companies registered at the same Istanbul address. However, these companies do not appear in Istanbul’s business registry or list directors, raising transparency concerns.
This case offers a textbook example of how bad actors are adjusting their ownership structures to evade sanctions. To learn more, read the full report Crude Measures: How Russia’s Dark Fleet Evades Sanctions.
Deep Blue Intelligence (DBI) Users Are Fully Protected Against Vessels Involved in the Theft of Ukrainian Grain
The EU designated multiple vessels for shipping grain that was stolen from Ukraine by Russia. DBI already had 100% of the newly sanctioned vessels on its Stolen Grain list. DBI was the first institution to create such a list.
Further Insights by Pole Star Global and Deep Blue Intelligence
There’s evidence that bad actors are shifting their tactics back to using commercial vessels to transport stolen grain. Plus, following Russia’s loss of the Assad regime, those exports previously destined for Syria may instead be redirected to Yemen.
To explain further, in a September report by Pole Star Global and DBI, it was highlighted that Russia was involved in plundering grain from Ukrainian farms and selling it overseas. Initially, Russian-flagged vessels were used to transport the stolen grain, but later, a suspicious fleet based in the UAE took over the operation.
The main destination for these shipments was Syria, Russia’s client state. There’s also evidence that grain was sent to Libya, where Russia has significant involvement.
However, given recent developments following Russia’s diminished influence over the Assad regime, David Tannebaum, Director of Blackstone Compliance Services, explains:
“I believe Russian grain shipments to Syria will decrease. This creates a gap in the supply chain, so it’s likely they may increase deliveries to Yemen or Libya instead. Sudan is also a possibility, as Russia is competing for an airbase there. While it’s uncertain what Syria’s next government will look like, there’s a chance they could agree to resume the shipments.” – David Tannenbaum, Director of Blackstone Compliance Services
Read the full report here: Analysing the Movements of Ukrainian Grain: Russia’s Use of the Avlita Grain Terminal to Move Stolen Grain.
The EU Sanctions Package: Other Inclusions
The Council has also listed 54 people and 30 entities responsible for actions that undermine or threaten Ukraine’s territorial integrity, sovereignty, and independence.
Individuals targeted in this package include:
- The military unit responsible for the attack on the Okhmadyt children’s hospital in Kyiv.
- Senior executives in major energy companies.
- Individuals involved in child deportation, propaganda, and sanctions evasion.
- The Minister of Defence and Deputy Chief of General Staff of the Democratic People’s Republic of Korea.
Entities targeted in this package include Russian defence companies, a chemical plant, and a Russian airline that provides crucial logistical support to the Russian military
Plus, for the first time, the EU has imposed comprehensive sanctions (travel bans, asset freezes, and restrictions on economic resources) on multiple Chinese entities.
Measures to Protect EU Companies and Exit the Russian Market
The EU Council has banned the enforcement of Russian court rulings under Article 248 of the Russian Arbitration Procedure Code. These rulings often block European companies from taking legal action outside Russia and impose heavy financial penalties. This ban ensures such penalties cannot be enforced in the EU.
The Council has also allowed EU central securities depositories (CSDs) to unfreeze cash balances. This responds to Russia’s retaliatory actions, which led to the seizure of CSD assets in Europe. Plus, the EU has extended deadlines for certain exemptions to help companies leave the Russian market safely and efficiently. These exemptions are approved by Member States on a case-by-case basis.