Newsletter of the main news 11.08/17.08

1️⃣ Frozen Russian Assets

The EU has carried out the third transfer of revenues from frozen assets of the Central Bank of Russia: €1.6 billion, accrued in the first half of 2025, will be directed to support Ukraine. From now on, 95% of these proceeds will go through the Ukraine Loan Coordination Mechanism (ULCM), which covers repayments on EU and other creditors’ loans, while 5% will be channeled via the European Peace Facility. The two previous tranches, in July 2024 and April 2025, were also allocated to support Ukraine.

The State Property Fund auctioned the confiscated Vinnytsiapobuthim plant, formerly owned by sanctioned Russian oligarch Volodymyr Plesovskykh, for UAH 608 million. The winner was Afina-Group LLC, whose beneficiaries are Ruslan Shostak and Valerii Kiptik, owners of the Eva and Varus retail chains. The enterprise, with infrastructure and personnel, must retain its operations and meet social obligations, including debt repayment and employee guarantees. The state emphasized that proceeds from the sale will be used for Ukraine’s recovery.

2️⃣ International Sanctions Policy

Switzerland joined the EU’s 18th sanctions package and, as of August 12, expanded restrictions against Russia. Fourteen individuals, 41 companies, and 105 “shadow fleet” vessels transporting oil and military goods were subjected to asset freezes and resource bans. In addition, the price cap on Russian oil was lowered to $47.6 per barrel, effective September 3. Twenty-six more entities came under stricter export controls, while additional lists targeted actors in Moldova and Belarus.

India’s largest lender, SBI, suspended overseas trade and currency operations with Nayara Energy, nearly half-owned by Rosneft, to avoid secondary U.S. sanctions. This move restricted the company’s access to international payments and nearly halted Russian oil supplies: in August, Nayara received only four cargoes of Urals crude, while output at its Vadinar refinery fell fourfold. Company leadership is seeking alternative banking partners, including UCO Bank, which has prior experience operating under sanctions, to secure import and export settlements.

China imposed counter-sanctions on Lithuania’s UAB Urbo Bankas and AB Mano Bankas, banning Chinese organizations and citizens from cooperating with them. Beijing stated this was retaliation for EU sanctions on Chinese banks and firms accused of aiding Russia in evading restrictions. The Ministry of Commerce urged Brussels to “correct its mistakes” and stop harming China’s interests. The EU had explained its measures by citing these banks’ provision of cryptocurrency services that helped Russia circumvent sanctions.

The European Commission denied media reports suggesting possible sanctions relief for Russia in the event of a ceasefire. Deputy chief spokesperson Arianna Podesta stressed that the EU is not considering any concessions and will maintain maximum pressure on Moscow. She called claims of a “review of restrictions” speculative, adding that member states are already working on the 19th sanctions package, expected in September.

The U.S. Treasury temporarily eased sanctions, authorizing a narrow range of transactions necessary to organize the Putin–Trump meeting in Alaska on August 15. The license is valid until August 20 and does not allow unfreezing of assets or lifting other restrictions, applying only to activities directly linked to summit preparations.

Cyprus is establishing the EMEK unit to enforce sanctions, set to be fully operational by late 2025. It will coordinate implementation, issue licenses, impose fines up to €100,000, and investigate breaches of EU, UN, and national measures. The reform, based on three new laws, criminalizes sanctions violations and introduces new reporting requirements for individuals and companies. Cyprus has already frozen £1.5 billion in Russian assets and is now tightening enforcement in cooperation with the UK, US, and other partners.

Dutch football club Vitesse Arnhem was suspended from national leagues due to suspected ownership or control by sanctioned Russian oligarch Roman Abramovich. Following regulatory violations and sanction-related risks, the Dutch football league removed the team from the second division. Vitesse’s appeal was rejected by the Midden-Netherlands District Court, while the government’s investigation continues.

The EU’s 19th sanctions package against Russia could be adopted as early as September, the European Commission announced. Deputy Chief Spokesperson Arianna Podestà emphasized that the EU continues pressure after 18 packages already imposed. Lithuanian Foreign Minister Kęstutis Budrys urged swift preparation of new measures to intensify pressure on Russia, increase military support for Ukraine, and accelerate its EU integration.

The U.S. sanctioned Russian crypto exchange Garantex, its successor Grinex, three executives, and six affiliated firms in Russia and Kyrgyzstan used for money laundering. Authorities said the platform served cybercriminals and offered a $6 million reward for information leading to arrests. Of that, $5 million was designated for information on Aleksandr Mira Serda, a citizen of Russia and Ghana registered in St. Petersburg.

Sanctions derailed Russia’s project to build two Icebreaker7-class vessels, ordered in 2021. The ships, designed to operate on diesel and LNG and cut through 1.5-meter ice, were to be subcontracted to Turkey’s Kuzey Star Shipyard, but the deal collapsed after Russia’s invasion of Ukraine. Initially planned for delivery in 2024 and later delayed to 2026, the contract has now been terminated, with the shipyard ordered to return a RUB 9.27 billion advance to Rosmorport.

New sanctions are unlikely to compel Russia to accept a ceasefire, U.S. Secretary of State Marco Rubio told NBC News. He noted that their impact would take months or years and warned new measures could derail peace talks. Rubio stressed that existing sanctions remain effective: when Russians landed in Alaska, they had to pay cash to refuel planes, being cut off from the U.S. banking system.

3️⃣ Sanctions Violations and Evasion

Siemens AG launched an internal probe after Reuters reported that Russia’s Biysk Oleum Plant, a producer of explosives for the military, had allegedly acquired Siemens equipment via Chinese intermediaries. The company reiterated its zero tolerance for sanction evasion, though parallel imports cannot be fully prevented. Siemens pledged to notify authorities if the claims are confirmed. Media reports suggested at least three Simatic systems may have been delivered, potentially boosting Russian defense production.

Sanctions on Russia impacted India’s Nayara Energy, partly owned by Rosneft, which for the first time in four years shipped diesel to China. The EM Zenith tanker, carrying nearly 500,000 barrels, initially headed for Malaysia but diverted to Zhoushan after EU restrictions disrupted several shipments. Sanctions also complicated payments, forcing Nayara to demand prepayments or letters of credit and reduce output at its Vadinar refinery. This marked the first diesel export from India to China since April 2021.

The Australian Federation of Ukrainian Organisations condemned imports of fuel containing Russian oil into Australia, which it said funneled over $2 billion in tax revenues to Russia. The group argued such trade funds Russian missiles and drones and is campaigning for closure of this sanction loophole. AFUO is staging protests, contacting senators, and will rally on August 17 at the Kurnell terminal where another tanker is due to arrive.

Vietnamese banks tightened checks on Russian transactions to avoid secondary Western sanctions. Transfers are now permitted only for goods genuinely imported into Vietnam or when a company has a local founder, requiring full documentation such as contracts, invoices, and customs papers. The stricter rules, in force since mid-summer, have already caused delays and rejections. While direct trade remains largely unaffected, transit schemes have become far more difficult.

Japan’s Ministry of Economy uncovered a scheme involving more than 300 Tsugami machine tools diverted through Chinese intermediaries, around 30 of which were found in Russian defense facilities. Tsugami was ordered to cut ties with implicated partners and halt support for equipment in Russia. Authorities also investigated Ferrotec, whose products were traced to Russian firms Epiel, Mikron, and Vympel. Several contracts were terminated, and exports are now closely monitored.

4️⃣ Ukraine’s Sanctions Policy

Russia has failed to fulfill state defense orders for Kh-59M2/M2A missiles due to shortages of components and production delays, Ukraine’s military intelligence (HUR) reported. Of the 116 companies involved in their production, nearly 40% are not under sanctions, allowing Russia to partially sustain capacity. Despite using cannibalized parts from old systems and even mock seekers instead of radar heads, Russian plants report persistent delays. Ukrainian intelligence stressed that extending sanctions to lower-tier suppliers would further disrupt production.

President Volodymyr Zelensky introduced sanctions against firms supplying AI components for Russian drones. Targets include Russian companies Progmatik, Umnye Ptitsy, Neurolab, and CBST, as well as six Chinese suppliers of engines, cameras, chips, and navigation modules. The measures aim to choke off technologies that enable AI-powered drones to navigate, evade jamming, and strike autonomously on the battlefield.