The European Council has formally prolonged the sanctions against Russian companies, banks, and nationals for another six months until July 31, 2016, the Brussels-based body said on December 21, three days after the EU members state ambassadors agreed on the move.

The decision is conditioned by the implementation of the Minsk II agreements between Russia and Ukraine and the view that the agreements will not be complied with by the end of 2015.

The prolongation of the sanctions in place since July 2015 and most notably limiting access to capital markets and restricting access to hydrocarbon extraction technologies was expected by analysts and Russian officials.

The press secretary of Russian Prime Minister Dmitry Medvedev, Natalia Timakova, said Russia was not intending to expand the retaliatory food imports embargo against EU in response to the prolongation. The embargo was introduced in August 2014 and will remain in effect until August 2016.

Meanwhile, the Ministry of Foreign Affairs in Moscow issued a statement saying that it sees no grounds for tying the sanctions to the implementation of the internationally-brokered Minsk II agreements to settle the conflict in Ukraine.

On December 4, Moody's Investors Service said that although the situation in Ukraine has improved, it does not expect the existing sanctions to be eased or lifted until the parties involved in the conflict "demonstrate their willingness to abide by the terms of Minsk II [peace treaty] for a sustained period of time".

At the same time, the status of the annexed Crimea peninsula is seen as a "potentially insoluble impediment to any final resolution of the impasse between Ukraine and Russia", Moody's added.