Energy Sanctions Reloaded

The European Commission proposed a ban on Russian gas imports based on Article 207 TFEU – a legal basis related to the EU’s Common Commercial Policy (CCP), rather than the Common Foreign and Security Policy (CFSP). This proposal compels us to reconsider the boundaries between CFSP sanctions and trade policy. Although these policy domains often overlap in practice, the new proposal seems to overlook that the EU maintains a distinct legal framework for imposing sanctions, which is typically grounded in CFSP provisions. If the ban is ultimately enacted under Article 207 TFEU, there is a risk that one or more Member States opposing these new sanctions against Russia will challenge it on the grounds that this EU Regulation is based on the wrong legal basis.

A new chapter in eliminating Russian energy

The proposal marks a new chapter in the EU’s efforts to eliminate Russian energy from its supply mix. It introduces a phased ban on imports of Russian natural gas – both pipeline and LNG – starting January 1, 2026, with some transitional exemptions for pre-existing contracts. The proposal further prohibits access to European LNG terminal services for Russian-controlled entities. To ensure compliance, the Regulation mandates detailed contract disclosures from importers and terminal operators, presumes Russian origin for gas entering at certain interconnection points, and tasks customs and energy regulators with strict monitoring and information exchange. Complementing these measures, Member States must develop national diversification plans for both gas and oil, outlining how they will fully replace Russian supplies by 2028.

While the Regulation blends trade restrictions, energy planning, and enforcement architecture into a single comprehensive legal framework, it also marks a departure from the previous sanction practice vis-à-vis Russia: whereas the EU had previously relied on the provisions of the CFSP under Articles 29 TEU and Article 215 TFEU, the proposed regulation is based on Article 207 TFEU, the legal basis for the EU’s CCP and complemented by Article 194(2) TFEU, to account for its energy-related dimensions (which will not be the focus here). This raises an essential question: where exactly does the threshold lie between adopting an import ban under the CFSP legal framework and doing so under the CCP?

Why the boundary between foreign policy and trade matters

There is no single, unified external policy at the EU level. Instead, the various domains of EU external action – including the CFSP and the CCP – are spread across different provisions of the Treaties and operate under distinct legal bases and governance structures. Under Article 24(1) TEU, the CFSP is governed by “specific rules and procedures”, notably requiring unanimity in decision-making in the Council. By contrast, unilateral trade measures fall under Article 207(2) TFEU and are adopted through the ordinary legislative procedure, implying the full involvement of the European Parliament and qualified majority voting in the Council.

It has long been established in the context of CFSP agreements that the choice of legal basis carries constitutional significance: the Union can only act within the powers conferred by the Treaties and must therefore anchor any measure to a provision that clearly grants the competence to adopt it. As the Court previously held in Titanium dioxide, a dual legal basis cannot be used when the procedures for each legal basis are incompatible with one another. Despite the Court’s refinements following the Treaty of Lisbon, this formula has remained essentially intact, preserving the distinction between procedural regimes.

Because of these distinct procedural requirements, it is crucial to determine whether a measure falls within the scope of the CFSP or the CCP. The separation of these external policies is manifested in Article 40 TEU, a reciprocal non-affection clause that reinforces a strict division of EU external action. In practice, however, this demarcation has done little to clarify legal basis questions – especially given the integrated external objectives under Article 21(2) TEU and the broad scope of the CFSP under Article 24(1), both of which leave significant room for institutional conflict. While Article 24(1) TEU and Article 275 TFEU empower the Court to ensure compliance with Article 40 TEU, it has notably refrained from relying on this provision in recent rulings when determining the appropriate legal basis of contested measures.

The challenge of choosing a correct legal basis in the context of EU external relations is that foreign policy and trade obviously interact with each other. This is especially true today, as trade is increasingly weaponised in various forms and export restrictions are employed to further national security objectives. The core tension lies in the fact that, while strictly separating foreign policy and trade no longer serves the interests of the Union and its Member States, EU law still requires a distinction between the two. Ultimately, the key question under EU law is whether a given measure must be adopted by unanimity or can proceed by qualified majority voting.

Nevertheless, early case law has established that – regardless whether a trade policy measure pursues commercial or perhaps non-commercial objectives – its purpose does not alter its nature. While such EU measures should still be qualified as trade policy and be based on Article 207 TFEU,  they can still advance wider foreign and security policy objectives. As we will demonstrate below, however, putting this idea into practice is far from straightforward within the current EU legal framework.

Linking foreign policy and trade together

The EU Treaties do not prevent trade policy from serving foreign policy and security objectives. In fact, the Treaties do not draw a strict line between different types of external objectives. Instead, Article 21(2) TEU sets out a list of aims that guide all areas of EU external action – including foreign policy and trade. Article 21(3) TEU also sets out a broader requirement: the EU must ensure consistency across its various external action policies, as well as between these and its internal policies. One could even argue that the Lisbon Treaty has already created the necessary legal framework that allows to design and implement a more coherent EU external action, enabling the Union to use a combination of external policy tools to advance EU security objectives.

Recent years have shown an increasing trend of advancing CFSP objectives using trade competence. Adopted in 2023, the Anti-Coercion Instrument (ACI) equips the EU with a tool to deter and respond to economic coercion by third countries. In essence, it allows the EU to use various forms of trade restrictions in response to third-country economic coercion that threatens the sovereignty of the Union or its Member States. The logic behind the ACI mirrors that of the EU’s CFSP restrictive measures: both aim to defend core interests through calibrated economic pressure. This proximity became apparent both during the legislative process and is reflected in the ACI’s functionality. While the instrument’s response measures all fall within the scope of the CCP, their underlying aim is to navigate geopolitical tensions – and not to regulate trade in the traditional sense.

This trend of advancing non-trade objectives using trade competence is also visible in the area of human rights. Both the EU’s Forced Labour Regulation and the Anti-Torture Regulation aim to uphold human rights by, respectively, banning products made using forced labour from the EU market and restricting trade in goods that could be used for capital punishment, torture, or other cruel, inhuman, or degrading treatment. While these measures are structurally similar to the recently proposed Russian gas ban in that they function as sanctions, they differ in scope and intent. Unlike the more horizontal focus of anti-torture or forced labour regimes, the proposal targets a specific country and a narrow category of goods, aligning it more closely with CFSP-style restrictive measures than with broader human rights trade instruments.

Considering these developments, it is hardly surprising that the EU is turning to trade measures once more to pursue non-commercial objectives. In fact, gradually integrating external policy areas may be the most pragmatic path forward after decades of artificial institutional separation.

Sanctions or trade?

As trade measures increasingly serve CFSP objectives, one might ask whether EU sanctions could not simply be based on Article 207(2) TFEU. This Treaty provision enables the Union to adopt unilateral trade measures, like the Anti-Coercion Instrument. After all, many sanctions – like import bans – take the form of trade instruments. Yet the EU developed a separate legal regime for sanctions, reflecting Member States’ long-standing insistence on keeping foreign policy distinct from trade, as it was seen as too politically sensitive to fully integrate into the EU’s supranational legal framework.

Quite uniquely, the adoption of sanctions requires the Union to adopt measures under both EU Treaties. The imposition of economic and financial sanctions (such as import bans) under Article 215 TFEU requires a prior CFSP Decision pursuant to Article 29 TEU. It could be argued that this complex procedural requirement reflects the division within the EU external action: trade sanctions may only be adopted following a prior foreign policy act by the Council.

This makes one wonder where exactly to draw the line between adopting an import ban under the CFSP or under the CCP legal framework. Depending on whether the EU adopts a CFSP or CCP route, substantive procedural differences can have significant distorting effects on policies. Under the CFSP’s two‑step process, urgent measures risk a delayed response, leaving the Union slower in reacting to crises. At the same time, actors may resort to some sort of norm shopping behaviour, steering proposals toward the framework with the more favourable odds of implementation. This may further fragment the coherence of EU action, if identical goals, such as import bans, can yield politically and legally misaligned measures. Lastly, it raises concerns about legitimacy when the core state function of security is pursued through different legal regimes, often on what appears to be a discretionary or inconsistent basis.

It inevitably prompts the question of why, if the EU phased out Russian oil under the CFSP, a similarly structured measure would now rely on a trade-based legal framework. The proposal makes it clear that the Commission saw little need to justify why the Russian gas import ban was not adopted under the CFSP framework. In it, the Commission merely states that such an import ban is consistent with the restrictive measures taken by the Union, making it compliant with Article 21(3) TEU. As for the legal basis, the Commission simply states the obvious: Article 207(2) TFEU applies, as the proposal introduces trade measures banning Russian gas imports and related services that fall under the CCP.

There are, however, some clues as to what may lie beneath the surface. Several news outlets have reported that the EU’s choice to “use” trade law for the Russian gas ban may be driven less by legal logic than by political pragmatism, and more concretely by the expected opposition from Hungary and Slovakia. Under the CFSP framework, either could veto the measure in the Council. By anchoring the proposal in trade law instead, the Commission may be seeking to sidestep unanimity and avoid a political deadlock.

Implicitly, this seems to be the justification for relying on the CCP rather than the CFSP legal regime. In the accompanying explanatory memorandum, the Commission justifies the choice of the instrument by referring to the “effectiveness and efficiency” of the proposed measure. What seems to be at stake here is not the effectiveness of the measure itself – after all, previous bans on Russian energy imports were already achieved through CFSP restrictive measures – but rather the efficiency of the legal decision-making process used to adopt it.

Another clue pointing in this direction is the Commission’s emphasis on the need to “act swiftly.” Given the scale and brutality of Russia’s war against Ukraine, this sense of urgency is undoubtedly justified. It would have been equally justified three years ago. The real question, then, seems to be whether the chosen route is genuinely quicker than adopting CFSP restrictive measures. While a qualified majority may be easier to secure than unanimity, the ordinary legislative procedure – in particular with the full parliamentary involvement – is hardly known for its speed. What the Commission seems to be signalling, in framing this as the faster path, is a political calculation: that bringing the gas ban through Parliament is more feasible in the short term than overcoming resistance in the Council.

The future

Although the current legislation is likely to undergo some amendment by the Council and the European Parliament, there is also a strong possibility that not all Member States will be satisfied with it. Seemingly, some Member States want to keep Russian gas flowing to EU territory. Therefore, if this measure gets adopted, one potential scenario could also include that the one or two Member States opposing new sanctions against Russia challenge this EU act before EU Courts on the ground that the measure is adopted on a wrong legal basis. They may argue that such measures are usually adopted under EU sanctions policy, requiring unanimity in the first step. This may bring some clarity of where the Court draws the line between the different legal regimes of the CCP and the CFSP.