16th EU Sanctions Package
The EU Council has approved new restrictions against Russia, adding 83 individuals and entities to the sanctions list. In particular, 13 regional banks have been banned from SWIFT, along with several software solutions (CRM, ERP, CAD, CAM) critically important for manufacturing processes in Russia. For a detailed overview of these measures, see the ESCU Monitoring Report for February 21–28, attached to this publication.
Russian Defense Industry in the 16th Package
The new sanctions have dealt a blow to the Kremlin’s military machine. Measures target enterprises supporting Russia’s defense sector: the “Leninets” holding, Voskresensky Aggregate Plant, Samara Electromechanical Plant, Orion Research and Production Association (NVO “Orion”), Alabuga Machinery LLC, as well as Zhukovsky and Vnukovo airports, and the ports of Ust-Luga and Primorsk.
Exemptions for Hungary
Despite strict curbs on Russian fossil fuel imports within the 16th package, Hungary has retained the ability to continue receiving oil products from Russia, citing the country’s “energy security.” Hungarian Foreign Minister Péter Szijjártó also stated that his government has long opposed sanctions against Russia.
Changes to the EU’s Sanctions Compliance Rules
The EU Council has adopted new requirements making European companies responsible for ensuring their branches or representatives outside the bloc do not help Russia evade sanctions.
If a company “turns a blind eye” to violations within its overseas subsidiaries, this behavior will be deemed a breach of EU restrictions. Previously, the ESCU reported that Russia purchases equipment from the subsidiaries of Western manufacturers in third countries.
UK Sanctions
London has imposed measures against 107 individuals and entities. The ban covers 40 vessels carrying Russian oil, suppliers of CNC machines and electronic components, the airline S7, certain banking institutions, and manufacturers of dual-use equipment. These sanctions aim to disrupt supply chains critical to Russia’s defense industry.
US Sanctions on Six Companies from China and Hong Kong Supplying American Components to Iran
Washington discovered that these firms had been purchasing critical parts in the US and supplying them to Iranian drone and missile manufacturers, including PKGB and NSMI. US authorities believe such components could help Tehran enhance its UAV and missile programs.
Russia Forced to Modernize Soviet-Era Tu-160 Bombers Due to Lack of New Aircraft
Russia is unable to develop new projects, such as the PAK DA stealth bomber, intended as a counterpart to the American B-21 Raider, largely because of sanctions, a shortage of domestic technologies, and a crisis in human resources. The number of engineers and specialists in Russia’s design bureaus has shrunk to less than 10% of its 1980s level.
As a result, the Kremlin is resorting to upgrading the Soviet-designed Tu-160 by relying on existing stockpiles and limited imports of electronic components.
Russia’s State Duma Switching to Locally Made Aurus and Lada Cars, Which Are More Expensive Than Foreign Models
Duma leadership will now use Russian-made Aurus sedans, while lower-ranking deputies will drive the new Lada Aura, abandoning European and Korean models like the BMW 5 Series or Hyundai’s Genesis. This “import substitution” will lead to significant extra costs for Russia’s budget: according to parallel-import prices, foreign business sedans cost around 20–30 million rubles, whereas the starting price for a Russian Aurus is 47.5 million rubles.
Read the ESCU Monitoring of the Russian Information Space attached below for more news and primary sources. Follow our channels to catch the next digest coming soon.
