The EU's 21st sanctions package, adopted on 23 July 2026 under Council Regulation (EU) 2026/1848, introduces significant new restrictions in the areas of energy, financial services and crypto-assets that directly affect companies operating in or through Germany. Businesses with exposure to Russian counterparties, LNG supply chains, or digital asset infrastructure face immediate compliance obligations and, in some cases, hard legal deadlines already in force. Understanding the cumulative effect of the 20th and 21st packages is now a prerequisite for any responsible risk assessment.
From the 20th to the 21st Package: A Compressed Timeline
The pace of EU sanctions legislation has accelerated considerably in 2026. The 20th package was adopted on 23 April 2026, introducing, among other measures, a ban on transactions involving the digital rouble and the RUBx instrument, which became applicable from 24 May 2026. Within three months, the 21st package followed on 23 July 2026, extending restrictions into three additional domains: energy supply chains, financial services infrastructure, and crypto-asset arrangements connected to Russian entities.
For compliance teams in Germany, the sequence matters. Measures from the 20th package are already operative; the 21st package either builds on those or introduces parallel obligations with their own effective dates. Treating the two packages in isolation is one of the most common – and most costly – procedural errors seen in current practice.
LNG: The Most Time-Sensitive Change
The Russian LNG import ban is arguably the provision with the most immediate commercial impact for German energy buyers, traders and port operators. The key dates are:
- 25 April 2026 – ban on Russian LNG imports applies to most contracts concluded or renewed after the relevant cut-off date;
- 1 January 2027 – the ban extends to long-term contracts concluded before 17 June 2025, which currently benefit from a transitional carve-out.
Companies that structured their LNG supply around long-term pre-2025 agreements now have a defined window before 1 January 2027 to renegotiate, source alternatives, or seek applicable derogations. The existence of a transitional period does not remove the legal obligation to take preparatory steps; in the event of a future enforcement inquiry, regulators and courts – including under the jurisdiction of the Bundesgerichtshof – will scrutinise whether a company used the available time to act diligently.
Financial Services and Crypto-Asset Restrictions
Council Regulation (EU) 2026/1848 expands the perimeter of prohibited financial services and tightens requirements around crypto-asset service providers. This is directly relevant to:
- German GmbH structures and holding entities with Russian beneficial owners or where Russian-linked entities hold participations;
- Payment service providers and credit institutions supervised by BaFin that maintain correspondent relationships with affected Russian counterparties;
- Crypto-asset exchanges, custodians and issuers whose platforms could be used to circumvent asset-freeze obligations;
- Any entity engaged in the provision of services to entities listed in the annexes to Regulation (EU) 833/2014.
The best-efforts obligation – already embedded in earlier packages – requires operators not merely to screen their direct counterparties but to take reasonable steps to ensure that subsidiaries and intermediaries are not used as conduits for prohibited transactions. Failure at this level constitutes circumvention under EU law, regardless of where in the corporate chain the breach occurred.
For firms uncertain about their exposure under the new financial services provisions, Ferraz & Whitmore's team is available to conduct a structured review. Initial enquiries can be directed to info@ferrazwhitmore.com or via our contacts page.
Divestment Derogation: Window Extended to 31 December 2026
The derogation permitting divestment from Russian-linked assets – which allows companies to complete exit transactions that would otherwise be restricted under the asset-freeze regime – has been extended to 31 December 2026. This is a meaningful but finite window. Companies that have been deferring decisions on Russian-held participations, real estate or financial instruments should be aware that the derogation is not open-ended and that each transaction must individually satisfy the conditions set out in the applicable regulation and be authorised by the competent national authority identified in the annexes to Regulation (EU) 833/2014.
German entities seeking to use this derogation will need to submit applications with sufficient lead time before the 31 December 2026 deadline. Preparing documentation, obtaining internal approvals and securing external legal sign-off all take time that companies are already consuming.
Sanctions Screening and the Circumvention Risk
One consistent enforcement theme across EU member states in 2025 and 2026 has been the prosecution of sanctions circumvention – the use of third-country intermediaries, shell structures or informal value-transfer mechanisms to benefit restricted persons. The 21st package reinforces the existing framework: it is not necessary for a company to be the primary actor in a circumvention scheme to face liability.
For Germany-based businesses, several structural factors heighten this risk:
- Germany's position as a major European hub for export controls and dual-use goods creates a high volume of transactions requiring screening;
- The Handelsregister (commercial register) reflects ownership structures that may not capture de facto beneficial control by restricted persons;
- The Mahnverfahren (payment order procedure) and other civil debt-recovery mechanisms can inadvertently involve a restricted party if sanctions screening is not conducted before initiating proceedings;
- Routing through jurisdictions flagged in earlier Commission guidance – including in analysis of sanctions circumvention risk patterns – continues to attract regulatory scrutiny.
Effective sanctions screening now needs to be integrated into transaction-approval workflows, not treated as a back-office check. This applies to new customer onboarding, contract renewals, and – critically – to any payment instruction that passes through a German legal entity.
Immediate Action Items for International Companies
Given the overlapping effective dates and the scope of the 21st package, the following actions are warranted now:
- Audit existing LNG and energy contracts to determine whether they fall under the 25 April 2026 ban or within the transitional window expiring 1 January 2027, and begin alternative sourcing or renegotiation as appropriate.
- Review digital asset and financial infrastructure for any residual exposure to the digital rouble, RUBx, or Russian-linked crypto arrangements prohibited since 24 May 2026.
- Map beneficial ownership across German-registered entities (GmbH and other forms) to identify any direct or indirect participation by listed or sanctioned persons, including through trust structures not visible in the Handelsregister.
- Update sanctions screening protocols to reflect the new designations and prohibitions in Council Regulation (EU) 2026/1848, and verify that your compliance software has been updated accordingly.
- Assess divestment timelines for any Russian-linked assets where the derogation ending 31 December 2026 may apply, and initiate the authorisation process with the competent national authority without delay.
If your organisation requires support mapping these action items against your specific structure, our sanctions and trade practice in Germany is ready to assist. Please write to info@ferrazwhitmore.com or visit our contacts page to arrange a consultation.
Cross-Border Considerations
Many German-based groups operate alongside entities in other EU jurisdictions. Because EU sanctions regulations apply directly and uniformly across member states, the obligations under Council Regulation (EU) 2026/1848 are the same in Germany as in Italy or Portugal – but enforcement approaches, national derogation procedures and competent authority contacts differ. Our Germany sanctions and trade practice works closely with colleagues covering other jurisdictions, including our Italy sanctions practice, to provide consistent multi-jurisdictional advice where needed.
The interaction between German corporate law, BaFin regulatory requirements, and EU sanctions regulation creates a compliance environment where a gap in one layer can expose a group to liability across the whole structure. Seeking coordinated advice from a law firm Germany with cross-border capability is not a precaution – it is a practical necessity at the current pace of regulatory change.
To discuss how the 21st package affects your specific situation, contact our team at info@ferrazwhitmore.com or through our contacts page. We can assess your exposure, support the authorisation process with the relevant competent authority, and help implement the procedural changes your compliance programme needs.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.