Overview
The Sanctions Update is compiled by Steptoe’s International Trade and Regulatory Compliance team and Steptoe’s Strategic Risk team. You can subscribe to receive the Sanctions Update every week through Steptoe’s International Compliance Blog and Stepwise Risk Outlook publication home pages.
For more information or advice on any of the developments discussed below, please contact a member of our sanctions team here.
US Developments
US Launches “Economic Fury” Amid Negotiations with Iran
As negotiations over an end to the conflict in Iran continue, Washington has announced its plans to ramp up economic pressure on Tehran. Dubbed “Economic Fury,” the Trump administration has said that its new approach to the conflict will be the “financial equivalent” of a bombing campaign. The Department of the Treasury has already acted to impose costs on those determined to be supporting Iran.
On April 15, 2026, OFAC announced sanctions against more than two dozen individuals, entities, and vessels alleged to be operating within the network of Iranian oil shipping magnate Mohammad Hossein Shamkhani (“Shamkhani”), the son of now-deceased senior Iranian security official Ali Shamkhani. Those targeted include individuals, entities, and vessels located or registered in the United Arab Emirates (UAE), the Netherlands, the Marshall Islands, and India. OFAC previously imposed sanctions on Shamkhani and over 100 individuals, entities, and vessels affiliated with him on July 30, 2025.
In a statement accompanying the designations, Secretary of the Treasury Scott Bessent said that Treasury will continue to cut off Iran’s illicit smuggling and terrorist proxy networks. He also warned financial institutions that Treasury will leverage “all tools and authorities, including secondary sanctions, against those who continue to support Tehran’s terrorist activities.”
Bessent later elaborated on his warning, stating at a press conference that Treasury had already sent a letter to financial institutions in China, Hong Kong, the UAE, and Oman, threatening to levy secondary sanctions if they allowed illicit Iranian funds, such as those that may be derived from oil smuggling, to pass through their institutions. These letters, as well as Bessent’s statement, are a significant escalation in the Trump administration’s economic approach to the conflict in Iran. Thus far, the administration had largely contained its military and economic pressure to Iran; now, the approach is expanding to target those whom it determines enable the Iranian regime to continue fighting, including by processing payments related to its illicit oil sales.
OFAC followed these announcements with additional sanctions on April 17 against seven Iraqi militia commanders allegedly responsible for planning, directing, and executing attacks against US personnel, facilities, and interests in Iraq. Bessent linked these designations to “Economic Fury,” saying that the sanctioned individuals were members of Iraqi terrorist militias that are backed by Iran.
While “Economic Fury” represents a shift in the Trump administration’s approach to the conflict, Treasury had already tacitly begun its pressure campaign by allowing for licenses authorizing the purchase of Russian and Iranian-origin oil or petroleum products at sea, namely General License (GL) 134A and GL U, to expire. President Trump had also previously announced an immediate 50 percent tariff on all goods sold to the United States by countries supplying weapons to Iran, though that policy has yet to be formally implemented.
US Continues to Ease Sanctions on Venezuela
On April 14, 2026, OFAC published two new GLs authorizing certain transactions with the Government of Venezuela (“GoV”) and named Venezuelan financial institutions.
- GL 56, “Authorizing Commercial-Related Negotiations of Contingent Contracts with the Government of Venezuela,” authorizes certain transactions prohibited by Executive Order (EO) 13884 that are ordinarily incident and necessary to engaging in commercial-related negotiations of contracts with the GoV, provided that the entry into and performance of such contracts are made expressly contingent upon separate authorization from OFAC.
- GL 56 outlines a number of activities which it does not authorize, including transactions involving persons located in Russia, Iran, North Korea, or Cuba, or any entity that is owned or controlled by or in a joint venture with such persons.
- GL 57, “Authorizing Financial Services Transactions Involving Certain Venezuelan Banks and Government of Venezuela Individuals,” authorizes all transactions prohibited by the Venezuela Sanctions Regulations (VSR) that are ordinarily incident and necessary to the provision, exportation, or reexportation, directly or indirectly, of financial services to, from, or for the benefit of the following financial institutions:
- Banco Central de Venezuela;
- Banco de Venezuela, S.A. Banco Universal (“Banco de Venezuela”);
- Banco Digital de los Trabajadores Banco Universal C.A.;
- Banco del Tesoro, C.A. Banco Universal (“Banco del Tesoro”);
- Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest; or
- Any individual whose property and interests in property are blocked solely pursuant to EO 13884 because that individual meets the definition of “Government of Venezuela,” as defined in EO 13884, including current employees of the “Government of Venezuela,” excluding any individual identified on OFAC’s List of Specially Designated Nationals and Blocked Persons (the “SDN List”).
On the same day, OFAC removed Reinaldo Enrique Muñoz Pedroza (“Muñoz Pedroza”) from the SDN List. Muñoz Pedroza was the former Solicitor General of Venezuela and was previously sanctioned by OFAC on September 4, 2020, for his support of the Maduro regime.
In addition, OFAC issued a new FAQ 1248 addressing which parties are responsible for fulfilling the reporting requirements under recent Venezuela-related GLs related to purchases and investment in Venezuela’s natural resources sectors.
OFAC Sanctions Nicaraguan Government Officials, Gold Firms
On April 16, 2026, OFAC sanctioned five individuals and seven companies operating in Nicaragua’s gold sector that allegedly help Nicaragua’s co-presidents, Rosario Murillo (“Murillo”) and Daniel Ortega (“Ortega”) (the “Murillo-Ortega regime”), generate revenue and maintain control in the country. Among those targeted by Treasury were Nicaragua’s Vice Minister of Energy and Mines, Nicaraguan entities that have assumed gold concessions previously held by sanctioned parties, and individuals and entities alleged to have forcibly seized a gold processing site owned by BHMB Mining Nicaragua S.A. (“BHMB”), a Nicaraguan company with foreign investment from a US company.
Secretary Bessent said in an accompanying statement that the Murillo-Ortega regime “has sought to fill its own coffers through the use of [] gold companies and co-conspirators by confiscating American investments in Nicaragua and using them to generate funds to maintain its political power.” He warned that the US will not allow such confiscation and that it will continue to target revenue streams that empower the Murillo-Ortega regime.
In addition to the above-mentioned officials and gold companies, in the same announcement, OFAC also designated two of Murillo and Ortega’s sons.
Treasury also issued a new Nicaragua-related GL 5, authorizing wind-down transactions involving one of the sanctioned entities, Exportadora de Metales Sociedad Anonima (“EMSA”), and any entity in which EMSA owns a 50 percent or greater interest, through 12:01 a.m. Eastern Daylight Time (EDT) on May 16, 2026, subject to certain conditions and restrictions.
OFAC Targets Cartel-Linked Casinos Involved in Money Laundering, Cash Smuggling
On April 14, 2026, OFAC sanctioned three individuals and three entities allegedly involved in a money laundering and cash smuggling enterprise operated by Cartel del Noreste (CDN), a Mexican drug trafficking organization designated by the US as a Foreign Terrorist Organization (FTO), Transnational Criminal Organization (TCO), and Specially Designated Global Terrorist (SDGT). According to OFAC, two of the entities involved are casinos operating near the US-Mexico border. At least one of the casinos, Casino Centenario, is alleged to be used as a “stash house” by CDN for illicit drugs, as well as a vehicle to launder money.
OFAC’s designations follow similar actions targeting gambling establishments for their alleged involvement in money laundering for cartels. For example, on November 13, 2025, Treasury sanctioned multiple Mexico-based gambling establishments for their connection to the Hysa Organized Crime Group (HOCG), a TCO that allegedly laundered proceeds of drug trafficking.
Treasury issued a new Counter Terrorism-related GL 35, authorizing wind-down transactions involving the three sanctioned entities – namely Comercializadora y Arrendadora de Mexico, S.A. de C.V. (CAMSA), Casino Centenario, and Diamante Casino – or any entity in which they own a 50 percent or greater interest, through 12:01 a.m. EDT, May 14, 2026, subject to conditions and restrictions.
OFAC Sanctions Recruitment Network Enabling War in Sudan
On April 17, 2026, OFAC sanctioned five individuals and entities allegedly involved in recruiting and deploying former Colombian military personnel to Sudan to fight on behalf of the Rapid Support Forces (RSF). Treasury stated that the network has fueled the conflict between the RSF and the Sudanese Armed Forces (SAF), contributing to one of the world’s worst humanitarian crises. Secretary Bessent condemned the failure of both the RSF and SAF to commit to a humanitarian truce. The Trump administration has called on the parties to implement an immediate, unconditional three‑month ceasefire.
OFAC Amends Two Lukoil-related GLs
On April 14, 2026, OFAC issued two amended Russia-related GLs, namely GL 128C and 130A.
- GL 128 authorized certain transactions otherwise prohibited by EO 14024 involving Lukoil International GmbH (“LIG”) or any entity in which LIG owns, directly or indirectly, a 50 percent or greater interest (the “LIG Entities”) that are ordinarily incident and necessary to the purchase of goods and services from, or the maintenance, operation, or wind down of, physical retail service stations located outside of Russia. GL 128C, “Authorizing Certain Transactions Involving Lukoil Retail Service Stations Located Outside of Russia,” extends the term of that authorization by another six months through 12:01 a.m. EDT, October 29, 2026.
- GL 130 authorized certain transactions otherwise prohibited by EO 14024 involving Lukoil Neftohim Burgas JSC; Lukoil Bulgaria EOOD; Lukoil Aviation Bulgaria EOOD; Lukoil Bulgaria Bunker EOOD; or any entity in which one or more of these entities own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest. GL 130A, “Authorizing Transactions Involving Certain Lukoil Entities in Bulgaria,” extends the term of the license by six months, through 12:01 a.m. EDT, October 29, 2026.
In addition, OFAC issued an amended FAQ 1225 reflecting the changes made in GL 128C.
UK Developments
OFSI Issues New General Licence for Prince Group Insolvency Activities
OFSI has issued General Licence INT/2026/9491628, permitting certain insolvency-related payments and activities involving the Prince Group and its subsidiaries (the “GL”). The GL, which came into force on April 14, 2026, provides a basis for parties to engage in specified transactions connected to insolvency proceedings, subject to defined conditions. The GL is intended to facilitate the orderly administration of insolvency processes where sanctioned entities are involved, while maintaining the integrity of the UK sanctions regime. Parties seeking to rely on the GL should review its terms carefully to ensure compliance with all conditions and reporting requirements.
OFSI Publishes 2026–2029 Strategy and New Operating Model
OFSI has published its strategy for 2026–2029, and an accompanying blog, setting out its priorities for the next three years as it enters its second decade of operation. The strategy outlines an ambition to ensure that UK financial sanctions remain effective, resilient, and impactful, building on OFSI’s expanded capabilities in licensing, enforcement, intelligence, and international cooperation over recent years. Central to the strategy is a new operating model structured around four pillars: (i) Promote, (ii) Enable, (iii) Respond, and (iv) Change (“PERC”). OFSI aims to improve clarity around sanctions obligations and expectations, facilitate legitimate activity through enhanced guidance and licensing processes, respond more quickly and proportionately to breaches using its full enforcement toolkit, and embed long-term improvements by learning from enforcement activity and stakeholder engagement. The strategy signals a continued focus on strengthening compliance outcomes while supporting businesses in navigating increasingly complex sanctions regimes through a more systematic use of data to identify high-risk areas and proactively enforce violations of UK financial sanctions.
OFSI Amends and Extends Iran Interim Necessities General Licence
OFSI has amended General Licence INT/2025/7628424, which permits certain payments by certain UK-designated Iranian banks to support essential activities, including payments to UK-based employees and directors (the “Iran GL”). The amendments expand the scope of permitted activity and extend the duration of the licence, which will now expire on October 22, 2026. Key changes include an expanded definition of “IT Providers” to cover a broader range of digital and software services, as well as new permissions allowing UK-designated persons to reimburse third parties for payments made on their behalf from UK accounts. The Iran GL also introduces provisions enabling currency conversion, fee deductions, and transfers between accounts to facilitate permitted payments. Associated reporting requirements have been updated to reflect these changes. Businesses relying on the Iran GL should review the amended terms carefully to ensure compliance with all conditions and obligations.
UK Accountant Charged in “Shadow Fleet” Sanctions and Money Laundering Case
The UK National Crime Agency has charged a UK-based shipping accountant, John Ormerod, with criminal offences relating to alleged breaches of the Russia sanctions regime and associated money laundering. The charges, authorised by the Crown Prosecution Service, relate to an alleged transfer of £200,000 in breach of asset freeze provisions under the Russia (Sanctions) (EU Exit) Regulations 2019, as well as a separate £100,000 transaction said to involve the proceeds of criminal conduct. The case is notable as it follows Ormerod’s recent removal from the UK sanctions list in March 2026 and represents one of the first criminal prosecutions linked to Russia’s “shadow fleet” operations. The allegations centre on the acquisition of oil tankers linked to Russian interests, highlighting enforcement focus on complex ownership structures and maritime sanctions evasion. The defendant is due to appear before Westminster Magistrates’ Court in May 2026.
EU Developments
Hungary to Maintain Block on 20th Sanctions Package Against Russia at Upcoming Foreign Affairs Council
The EU is not expected to reach an agreement on its 20th sanctions package against Russia at the upcoming Foreign Affairs Council on April 21. According to reports, Hungary is likely to continue to withhold its approval despite recent elections that brought Prime Minister Viktor Orbán’s leadership to an end. Discussions at the latest meeting of the EU Council’s Political and Security Committee reportedly reflected warnings from representatives of the outgoing Hungarian administration that no immediate policy shifts should be expected during the transition period.
In addition to sanctions against Russia, EU ambassadors are scheduled to discuss the proposed €90 billion euro EU loan to Ukraine at the Foreign Affairs Council meeting. Hungary continues to block its approval of the loan, with the deadlock linked to the suspension of oil transits from Ukraine to Hungary via the Druzhba pipeline.
On April 19, Prime Minister Orbán announced that Hungary had been informed that Ukraine was ready to restore oil deliveries via the “Friendship pipeline” as early as Monday, contingent upon Hungary lifting its blockade of the loan. In response, Prime Minister Orbán reaffirmed that Hungary’s position remains unchanged and that approval of the loan will only be granted once oil supplies have resumed. Orbán further stressed that the disbursement of the €90 billion euro loan does not impose a financial burden or obligation on Hungary.
Asia-Pacific Developments
China Issues Regulations Countering Unlawful Extraterritorial Jurisdiction by Foreign States
China has issued new 20‑article regulations to introduce a new legal tool to counter foreign states’ unlawful extraterritorial and “long‑arm” jurisdiction. The rules provide that China’s Ministry of Justice (MOJ) will lead the identification of “unjustified extraterritorial measures.” In making these identifications, the MOJ will consider four factors: whether the foreign measures violate international law; whether they have an appropriate connection to the foreign state concerned; whether they harm China’s sovereignty, security, development interests, or the lawful rights of its citizens and organizations; and other relevant facts. Once a measure is identified as unjustified, the MOJ may authorize corresponding countermeasures by issuing a prohibition order. Failure to comply with such an order may result in civil and criminal liability. The regulations also introduce a new “Malicious Entity List” to designate non-Chinese entities and individuals that promote or participate in the implementation of “unjustified extraterritorial measures.” China has introduced multiple anti‑foreign sanctions laws and regulations over the past years, and it remains to be seen whether and how the MOJ, which has been given new authority, will employ this new tool.
Hong Kong Banks Face Sanctions Risk Amid US–China Legal Escalation
Hong Kong banks that rely on the SWIFT payment system are facing increased risk from potential US secondary sanctions as Washington escalates efforts to cut off Iran’s oil‑related financial flows, warning banks in Hong Kong and other jurisdictions against processing Iran‑linked transactions. US authorities cite evidence that billions of dollars were routed through correspondent accounts—often via shell companies—while Hong Kong banks, despite Hong Kong officials’ stated non‑enforcement of US sanctions, have largely complied in practice to retain access to US dollar clearing services and SWIFT. The risk is increasing as the US engages in a new “Economic Fury” campaign to increase pressure on Tehran to open the Strait of Hormuz.
Indian Refiners Use Yuan Channel for Iranian Oil Payments
Indian refiners have resumed limited purchases of Iranian crude under a temporary US sanctions waiver by settling payments in Chinese yuan through ICICI Bank. The payments, routed via ICICI’s Shanghai branch, were used for rare cargoes bought by state‑run Indian Oil Corporation and private refiner Reliance Industries, marking India’s first Iranian oil purchases in about seven years after previously halting imports in 2019 due to US sanctions. The arrangement reflects ongoing difficulties in financing Iran‑linked oil trades under sanctions, with one shipment involving an atypical payment structure in which most of the cargo value was paid once the tanker entered Indian waters rather than upon delivery. The waiver, introduced by Washington to ease oil prices during heightened Middle East tensions, is set to expire shortly, with US officials indicating it will not be renewed. India has similarly used yuan to pay for Russian oil since Western sanctions on Moscow in 2022, underscoring a broader shift toward non‑dollar settlement channels for sanctioned energy trades, although sources indicated India does not plan further Iranian purchases once the waiver ends.
Indonesia Moves Ahead With Russian Crude Imports Despite Sanctions Concerns
Indonesia plans to start importing crude oil from Russia in April 2026 through a mix of government‑to‑government and commercial arrangements, despite ongoing uncertainty over how long US sanctions waivers will be extended for Russian energy majors and Russian crude at sea. Energy Minister Bahlil Lahadalia said shipments could begin within weeks following high‑level talks between Indonesian President Prabowo Subianto and Russian President Vladimir Putin. The move is driven by intensifying competition for energy supplies and heightened supply risks after disruptions linked to the Strait of Hormuz, making timely access to crude a priority for Indonesia’s energy security. While Russian oil is commercially attractive, the decision carries political and sanctions‑related risks, prompting calls for diplomatic engagement with Washington. Indonesia has also signaled interest in broader energy cooperation with Russia, including storage and nuclear projects, as part of a strategy to diversify supplies in a volatile global energy environment.
