D1 Sanctions Architecture and Evasion
Sanctions Architecture and Evasion
Continue reading
The EU has built a two-layer architecture toward Russia this cycle. The first layer is the AML/CFT high-risk-third-country designation under Commission Delegated Regulation (EU) 2026/46, in force from 29 January 2026, which added Russia to the Annex of Delegated Regulation (EU) 2016/1675 under Article 9 of Directive (EU) 2015/849, triggering mandatory enhanced due diligence under Article 18a. This designation was created specifically because Russia's FATF status is suspended rather than formally grey- or black-listed, meaning the ordinary FATF-list-driven EDD trigger does not apply and a distinct EU mechanism was needed to fill the gap. The second layer is the sanctions-designation architecture proper: the EU's 21st sanctions package, adopted 23 July 2026, added 216 new designations (48 individuals, 168 entities), extended transaction bans to 33 additional Russian credit and financial institutions and 4 non-EU banks, and extended transaction bans to 14 non-EU crypto-asset service platforms, with a board-membership ban applying to any crypto-asset services business from 25 August 2026. Structurally, this represents the sanctions-designation perimeter continuing to widen outward toward third-country intermediaries and crypto-asset venues rather than remaining confined to direct Russian counterparties.
A distinct signal this cycle is internal to the EU's own sanctions-maintenance machinery rather than external designation activity. On 14 September 2026, the EU failed to extend its six-monthly asset-freeze regulation on schedule after Slovakia demanded the delisting of Alisher Usmanov and Mikhail Fridman, requiring a one-week extension to negotiate the rollover under the unanimity requirement governing EU sanctions renewal. This is the first sign this cycle of friction in the EU's sanctions-maintenance process itself, as distinct from the pattern of continued external designation activity that otherwise defines the architecture. The unanimity requirement is a structural feature of EU sanctions renewal, and this episode illustrates a live risk that individual Member States can leverage that requirement to force partial delisting or non-renewal, independent of any change in the underlying merits of a given designation.
Outlook
Whether the Slovakia-driven negotiation results in full renewal, partial delisting of the two named individuals, or a further delay is the immediate marker to watch. More structurally, whether this episode proves to be an isolated instance of Member-State leverage or the first of a recurring pattern under the unanimity requirement will shape how durable the EU's sanctions-maintenance architecture proves to be against Russia going forward.