EU Sanctions Against Ukraine 2026: What Companies and Banks Must Verify

Key data

Banks, exporters and companies with operations in Russia or Belarus have an immediate compliance obligation as of May 11, 2026. Council Implementing Regulation (EU) 2026/1055 expands and updates the list of natural and legal persons subject to EU restrictive measures in the context of the Ukraine conflict, with entry into force on the same day as its publication.

There is no adaptation period. Any active commercial or financial relationship with the newly designated subjects constitutes a breach from that date.

What does this regulation establish?

This Implementing Regulation develops Regulation (EU) No. 269/2014, which is the base legal framework for restrictive measures related to actions that undermine or threaten the territorial integrity, sovereignty and independence of Ukraine.

The May 2026 update expands the list of designated subjects and imposes two types of specific measures:

• Asset freezing: the funds and economic resources of the persons and entities included in the list are blocked. No EU company or financial entity may make funds or economic resources available to them.
• Travel ban: designated natural persons are prohibited from entering and transiting through the territory of the European Union.

The obligation for European companies is clear: verify that they do not maintain commercial or financial relationships with any of the newly designated subjects. This verification must be carried out actively, not passively.

Economic and operational impact

The impact is not only legal: it has direct operational consequences for any company with exposure to Russian or Belarusian markets.

The main practical implications are:

• Review of counterparties: any contract, credit line, supplier or customer relationship involving the newly designated parties must be suspended immediately.
• Payment blocking: financial entities must freeze any pending transactions with listed subjects.
• Sanctions risk: non-compliance triggers administrative and criminal sanctions according to the legislation of each Member State. In Spain, the sanctioning regime for international sanctions may include substantial fines and disqualifications.
• Reputational risk: maintaining relationships with sanctioned entities can generate consequences beyond strictly legal matters, including exclusion from public procurement or restrictions on access to financing.

For financial entities, the obligation is especially critical: banks must update their counterparty screening systems with the new list published on May 11, 2026.

Who does it affect?

This regulation is especially relevant for:

• Banks and financial entities with operations in Russia or Belarus, or with clients operating in those markets.
• Exporters and importers with active commercial relationships with Russian or Belarusian counterparties.
• Companies with subsidiaries or shareholdings in Russia or Belarus.
• Advisors and consulting firms that provide services to entities with exposure to those markets.
• Logistics and transport companies that operate routes or services linked to those territories.
• Law firms and compliance firms that manage regulatory compliance for clients with activity in the region.

Practical example

A Spanish bank that maintains an active credit line with a Russian company included in the new list of Council Implementing Regulation (EU) 2026/1055 has the obligation, as of May 11, 2026, to freeze that credit line and block any pending fund disbursement.

If the bank does not update its counterparty screening system and allows a transfer to that company to be executed after May 11, it incurs a breach of EU restrictive measures. This may result in an administrative sanctioning proceeding and, depending on the severity, in criminal liability for those responsible at the entity.

The same scenario applies to an exporter that has a pending order for delivery to a designated company: the delivery of goods is equivalent to making economic resources available to a sanctioned subject.

What should companies do now?

1. Access the updated list: consult the full text of Council Implementing Regulation (EU) 2026/1055 to identify the newly designated subjects.
2. Review all active counterparties: cross-reference the list of clients, suppliers, partners and payment beneficiaries with the newly designated parties. Prioritize relationships with Russia and Belarus.
3. Suspend relationships with designated parties: if any counterparty included in the list is detected, immediately suspend any active commercial or financial relationship.
4. Update screening systems: financial entities must incorporate the new list into their counterparty control tools and transaction filters.
5. Document the verification process: keep evidence of the review process performed. In case of inspection or sanctioning proceeding, due diligence documentation is key to demonstrating diligence.
6. Consult with the legal or compliance team: if there is uncertainty about whether a counterparty is affected or about specific obligations, consult with a specialist in international sanctions before making decisions.

Official source

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional.