International businesses with Russia-linked operations, contracts, or counterparties face a layered compliance environment in which EU sanctions packages, Russian procedural countermeasures, and export control regimes interact in ways that create simultaneous legal exposure across multiple jurisdictions. Navigating that environment requires a clear understanding of which obligations apply, where conflict-of-laws tensions arise, and how procedural tools such as Russian anti-suit injunctions under APC RF arts. 248.1–248.2 can constrain a company's options abroad. Ferraz & Whitmore advises EU-based and third-country clients on the cross-border dimensions of this compliance challenge, subject to the restrictions that EU sanctions impose on legal services directed at the Russian state or at sanctioned entities.
Why the Compliance Landscape Has Intensified in 2025–2026
The EU sanctions programme against Russia has expanded materially since early 2025. The 20th sanctions package entered into force on 23 April 2026, followed by the 21st package – Regulation (EU) 2026/1848 – adopted on 23 July 2026. Among the most operationally significant recent measures is the digital rouble (RUBx) ban, which took effect from 24 May 2026, closing a potential settlement channel that some market participants had begun to explore.
Alongside these substantive restrictions, Council Regulation (EU) 2026/506, also adopted on 23 April 2026, introduced a dedicated anti-suit protection mechanism for EU persons who are sued by sanctioned Russian counterparties in Russian courts in breach of a contractual jurisdiction or arbitration clause. Switzerland adopted a parallel provision under art. 29d of its sanctions framework. These instruments reflect a growing legislative acknowledgement that compliance is not merely a matter of avoiding prohibited transactions – it also involves defending contractual dispute-resolution rights against procedural pressure from Russian courts.
The Russian Procedural Dimension: APC RF Arts. 248.1 and 248.2
Russian procedural law has developed its own countermeasures. APC RF art. 248.1 grants Russian Arbitrazh courts exclusive jurisdiction over sanctions-related commercial disputes involving Russian parties, even where the underlying contract designates a foreign court or arbitral tribunal. Art. 248.2 enables those courts to issue anti-suit and anti-arbitration injunctions, with financial penalties of up to the full amount of the claim at stake.
For several years, these provisions were applied expansively. However, Constitutional Court Ruling No. 999-O of 29 April 2025 introduced an important qualification: the mechanism is not automatic. A Russian court must find that real, concrete obstacles to access to justice exist before invoking exclusive jurisdiction or granting injunctive relief under these articles. The Supreme Court of Russia's Thematic Review No. 8/2026, published in June 2026, further consolidated practice on when those conditions are treated as satisfied, providing a more predictable – though still demanding – analytical framework.
For international clients, the practical consequence is that any Russia-linked contractual relationship carries a non-trivial risk of becoming subject to parallel proceedings: one before the contractually designated tribunal and one before an Arbitrazh court. Knowing how to assess that risk in advance, and how to respond procedurally if it materialises, is a core element of sanctions compliance strategy.
Core Compliance Obligations for International Businesses
Compliance with EU sanctions in the Russia context is not limited to transaction screening. The obligations that most frequently give rise to enforcement exposure or commercial disruption include the following:
- Asset freeze compliance: Identifying whether any counterparty, beneficial owner, or entity in a corporate structure is a designated person subject to an EU asset freeze, and ensuring that no funds or economic resources are made available to them directly or indirectly.
- Export controls and dual-use goods: Verifying that goods, technology, or services do not fall within the categories restricted under successive EU packages, including items subject to the common high-priority goods list and sector-specific prohibitions.
- Sanctions screening: Maintaining screening procedures that are proportionate to the volume and nature of Russia-linked activity, cover subsidiaries and intermediaries, and are updated promptly when new designations or package amendments are published.
- Best-efforts obligation: Where EU law requires operators to use best efforts to ensure that foreign subsidiaries or third-country partners do not circumvent restrictions, documenting those efforts adequately to demonstrate good faith to competent authorities.
- Circumvention risk: Assessing whether transaction structures, including re-routing through third countries, could be characterised as circumvention under EU law, regardless of whether the intermediary jurisdiction itself has adopted equivalent restrictions.
- Digital rouble exposure: Reviewing any outstanding payment obligations or settlement arrangements involving RUBx instruments in light of the prohibition effective from 24 May 2026.
- Legal services restrictions: Understanding that EU sanctions restrict the provision of certain legal advisory services to the Russian government and to entities established in Russia, with limited exceptions including access-to-justice carve-outs – a dimension that affects how and by whom compliance work can be structured.
If your organisation is reviewing its Russia-linked exposure and would benefit from an initial assessment of which obligations apply to your specific structure, you are welcome to reach out to the team at info@ferrazwhitmore.com or visit our contacts page.
Cross-Border Dimensions: EU, Switzerland, and Third-Country Intermediaries
One of the most challenging aspects of Russia sanctions compliance for international businesses is that obligations do not stop at the EU border. Clients operating through holding structures in third countries, or sourcing goods via Central Asian or South Caucasian intermediaries, must account for the best-efforts obligation that EU law imposes on EU persons in relation to their non-EU subsidiaries and affiliates. The European Commission has issued guidance indicating that "best efforts" requires affirmative action – not merely the absence of instructions to circumvent.
Switzerland's parallel framework, including the recently adopted art. 29d anti-suit protection, means that Swiss-domiciled entities face comparable procedural exposure when dealing with sanctioned Russian counterparties. For groups with entities in both the EU and Switzerland, aligning compliance programmes across both frameworks is an increasingly practical necessity rather than a theoretical consideration.
Jurisdictions such as Kazakhstan have become relevant transit points in Russia-linked supply chains, and the EU has specifically addressed this in successive packages by adding obligations on operators to conduct enhanced due diligence on goods flowing through high-risk third countries. Our colleagues advise on the Kazakhstan-specific dimension of these cross-border compliance questions; further detail is available on the Kazakhstan sanctions and trade page.
Self-Assessment: Key Questions for Your Organisation
Before commissioning external legal advice, organisations often benefit from a structured internal review. The following questions can help identify where priority gaps exist:
- Does your counterparty or beneficial ownership chain include any person or entity listed on the EU Consolidated Sanctions List or equivalent national lists?
- Have you updated your sanctions screening procedures to reflect the 20th and 21st EU packages, including the RUBx prohibition?
- Do any of your contracts with Russian counterparties designate a non-Russian dispute-resolution forum, and have you assessed the risk of an APC art. 248.1 exclusive jurisdiction claim?
- If you have non-EU subsidiaries with Russia exposure, have you documented the steps taken to satisfy your best-efforts obligation under EU law?
- Are goods or technology in your supply chain subject to export controls under the EU dual-use or common high-priority goods frameworks?
- Has your legal team reviewed whether any pending or ongoing dispute involving a sanctioned Russian counterparty triggers the protections under Council Regulation (EU) 2026/506?
- Do you have a clear escalation procedure when a potential circumvention concern is identified internally?
How Ferraz & Whitmore Approaches This Work
Our work on Russia sanctions compliance is structured around the specific legal exposure of non-Russian clients – primarily EU-domiciled businesses, investment funds, and financial institutions, as well as third-country entities that operate within the EU regulatory perimeter. We do not represent sanctioned persons or entities.
In practice, our engagements in this area typically cover: mapping sanctions exposure across corporate structures; reviewing and strengthening compliance programmes against the specific obligations of the relevant EU packages; advising on the procedural risk posed by APC arts. 248.1 and 248.2 in the context of ongoing or anticipated disputes; and coordinating multi-jurisdictional responses where Swiss, EU, and third-country frameworks interact. Where a client is considering or managing an exit from the Russian market, our step-by-step guidance on that process is set out in the Russia market exit guide, which we update as the regulatory position develops.
For clients who need broader support on their Russian corporate structures, including questions about restructuring or winding down entities established in Russia, our Russia corporate law practice works alongside the sanctions team to address the intersection of compliance and entity management.
Typical Pitfalls and How to Anticipate Them
Based on experience advising clients across successive sanctions packages, certain patterns of compliance failure recur. Understanding them in advance reduces both legal exposure and operational disruption.
- Delayed screening updates: Each new sanctions package introduces new designations and category restrictions. Organisations that rely on quarterly or ad hoc screening cycles rather than automated triggers risk a compliance gap in the period immediately after a new package is adopted.
- Incomplete beneficial ownership analysis: Asset freeze obligations attach to entities that are owned or controlled by designated persons, not only to those persons directly. Chains of ownership that pass through third-country holding companies are a frequent source of undetected exposure.
- Underestimating APC art. 248.2 penalties: The financial penalties available under art. 248.2 are calibrated to the amount of the underlying claim. In a substantial commercial dispute, this means the cost of non-compliance with a Russian injunction can be very significant, even for a company that ultimately prevails in its contractually designated forum.
- Misreading the access-to-justice exception for legal services: The exception that permits certain legal advisory services to Russian-established entities is narrow and condition-dependent. Assuming it applies without legal analysis of the specific service being provided and the nature of the recipient is a material risk.
- Insufficient documentation of best-efforts steps: Regulators assessing circumvention cases have placed increasing weight on whether operators can demonstrate, through contemporaneous documentation, that they took affirmative steps to prevent non-EU affiliates from facilitating prohibited transactions.
If any of these scenarios resonate with your organisation's current situation, we are available to discuss the specific facts and identify an appropriate path forward. Please contact us at info@ferrazwhitmore.com or through our contacts page.
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.