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
OFAC Sanctions TdA Money Laundering Network
On December 3, OFAC sanctioned multiple individuals and entities allegedly affiliated with Tren de Aragua (TdA), a transnational criminal organization (TCO) that the Trump administration designated as a Foreign Terrorist Organization (FTO) and Specially Designated Global Terrorist (SDGT). Concurrently, the Department of State announced an increase in the reward offer for information leading to the arrest or conviction of Giovanni Vicente Mosquera Serrano, an alleged leader of TdA.
The Trump administration continues to levy sanctions against members or affiliates of cartels and TCOs, in line with the President’s Executive Order (EO) calling for the “total elimination” of these organizations’ ability to threaten the territory, safety, and security of the United States.
OFAC Issues Another Lukoil-Related GL, Publishes FAQ
On December 4, OFAC issued Russia-related General License (GL) 128B, authorizing certain transactions involving Lukoil International GmbH (“LIG”) or any entity in which LIG owns, directly or indirectly, a 50 percent or greater interest through April 28, 2026 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. Notably, this includes certain transactions with Lukoil North America LLC and Lukoil Americas Corporation.
On the same day, OFAC published a new Russia-related Frequently Asked Question (FAQ), OFAC FAQ 1225. OFAC FAQ 1225 provides guidance on the activities permitted by GL 128B and the related GL 131, which authorizes certain transactions ordinarily incident and necessary to the negotiation of and entry into contracts with PJSC Lukoil or any of its affiliates for the sale, disposition, or transfer of LIG or any entity in which LIG owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.
Lawmakers Introduce Bill to Sanction IUU Fishing
On December 2, the Ranking Member of the House Foreign Affairs Committee, Rep. Gregory Meeks (D-NY), and the Chairwoman of the Subcommittee on East Asia and the Pacific, Rep. Young Kim (R-CA), introduced legislation requiring the President to impose sanctions, including visa restrictions and asset blocking, on foreign individuals, entities, and vessels determined to knowingly be involved in illegal, unreported, and unregulated fishing (“IUU fishing”).
The bill, which will be referred to as the “Stop Illegal Fishing Act,” is ostensibly aimed at IUU fishing from the People’s Republic of China (PRC). In the associated press release, Reps. Meeks and Kim state that nearly half of the vessels that engage in IUU fishing originate from the PRC.
Senator Calls for More Pressure on Putin
On December 4, the Ranking Member of the Senate Foreign Relations Committee, Sen. Jeanne Shaheen (D-NH), issued a statement urging Congress to pass legislation, the Designating the Russian Federation as a State Sponsor of Terrorism Act, designating Russia as a State Sponsor of Terrorism (SST). Currently, there are only four other countries that are designated as SSTs: Cuba, North Korea, Iran, and Syria, with Syria’s status currently under review by the United States in accordance with section 8(b) of EO 14312.
SSTs are subject to restrictions on US foreign assistance; a ban on defense exports and sales; certain controls on exports of dual-use items; and other additional financial and trade restrictions.
The Act is one of several pieces of Russia-related sanctions legislation pending in Congress. As reported previously, Congress has renewed interest in passing measures aimed at holding Russia accountable for the war in Ukraine, including through the Sanctioning Russia Act of 2025. Whether these bills pass will largely depend on President Trump, who continues to negotiate a peace plan with Russia and Ukraine.
UK Developments
UK Issues New Syria Sanctions Guidance to Support Businesses and NGOs
The UK has issued new guidance on the Syria sanctions regime to support businesses and NGOs engaging in Syria after significant easing measures were introduced during 2025. Earlier this year, the UK amended the Syria (Sanctions) (EU Exit) Regulations 2019, narrowing the regime’s purpose and designation criteria, lifting selected trade, finance and transport restrictions, removing sanctions on the Syrian Central Bank and other state-linked bodies, and delisting President Ahmed al-Shara’a. The new guidance clarifies that certain key restrictions continue to apply, including asset freezes on individuals and entities meeting the revised criteria and trade prohibitions on chemical and biological weapons, gold and precious metals, luxury goods and military items. The guidance also explains how UK measures interact with UN sanctions. While the UN has delisted President al-Shara’a, sanctions remain on Hay’at Tahrir Al-Sham (HTS), meaning businesses must avoid directly or indirectly providing funds to UN-designated groups. Overall, the new guidance provides practical clarity for organisations seeking to operate lawfully in Syria under the revised UK sanctions framework.
UK Exporter Pays £620,515 Compound Settlement for Export Control Breaches
Her Majesty’s Revenue and Customs (HMRC) has published a penalty notice confirming that a UK exporter paid a £620,515.04 compound settlement in September 2025 for unlicensed exports of military-listed goods in breach of The Export Control Order 2008. The settlement reflects HMRC’s continued enforcement focus on strategic export controls, particularly where military items are exported without the required licences. Compound settlements are only offered in limited circumstances, and this case illustrates the criteria HMRC applies. A settlement may be proposed where the breach was inadvertent, or caused by deficiencies in internal compliance systems, and where the exporter has voluntarily disclosed the breach to HMRC. Intentional violations or attempts to evade controls typically result in harsher enforcement responses. The case serves as a reminder to exporters of the importance of robust internal controls, accurate classification of goods and timely self-reporting of any compliance failures.
Court of Appeal Rejects Letter One’s Compensation Appeal in NSIA Case
The UK’s Court of Appeal has dismissed Letter One’s challenge seeking compensation under Article 1, Protocol 1 of the European Convention on Human Rights (“A1P1”) following the UK Government’s 2022 order requiring it to divest its shareholding in broadband company, Upp, under the National Security and Investment Act (NSIA). Letter One, whose ultimate beneficial owners include UK-sanctioned Russian individuals Mikhail Fridman, Petr Aven, and German Khan, argued that it was forced to sell Upp at below-market value because of the UK Government’s intervention and was therefore entitled to additional compensation.
Having failed on all grounds in the UK High Court, Letter One was granted permission to appeal solely on whether A1P1 required compensation beyond the proceeds of the compelled sale. The Court of Appeal rejected this argument, holding that no such entitlement arose. In doing so, the court relied heavily on the principles affirmed in Shvidler, emphasising the UK Government’s broad discretion to impose proportionate measures in the national security context. The ruling confirms that, where national security risks are identified, the courts will afford significant deference to ministerial judgment, and compensation will not automatically be available for losses arising from NSIA divestment orders.
UK Publishes New Downloadable Formats of the UK Sanctions List Ahead of 2026 Single-List Transition
As part of preparations for the move to a single, consolidated list of UK sanctions designations from January 28, 2026, the UK Government has released additional downloadable formats of the UK Sanctions List on GOV.UK. The list is now available in CSV and TXT formats, alongside an updated HTML version, to support businesses integrating designations data into screening tools and compliance systems. The expanded file formats are intended to make it easier for organisations—particularly those with automated or high-volume screening processes—to transition away from the OFSI Consolidated List before it formally closes next year. Firms are encouraged to begin using the UK Sanctions List as their primary data source well ahead of the January 2026 deadline and to raise any issues with the Foreign, Commonwealth & Development Office.
UK High Court Enforces Arbitral Order Requiring Withdrawal of Russian Proceedings Aimed at Undermining Sanctions
The UK High Court has enforced a London arbitral tribunal’s order requiring EuroChem NW2 to withdraw Russian court proceedings that were initiated to frustrate EU and UK sanctions, in Tecnimont SpA and MT Russia v EuroChem NW2 and EuroChem [2025] EWHC 3151 (Comm). The dispute arose from a construction contract that required arbitration in London under ICC Rules. After Tecnimont commenced arbitration, EuroChem NW2 began parallel proceedings in Russia despite an existing arbitral order directing it to withdraw them—a move viewed as an attempt to circumvent sanctions restrictions. EuroChem NW2 argued that it could not comply because Russian law allegedly required the claims to be heard domestically and exposed its directors to potential prosecution. The High Court rejected this, finding insufficient evidence of any real risk of prosecution and concluding that the Russian proceedings were “at least in large part” intended to undermine EU and UK sanctions.
UK Adds Two Designations to Domestic Counter-Terrorism Sanctions Regime
The UK Government has designated one individual, Gurpreet Singh Rehal, and one entity, Babbar Akali Lehar, under the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019. According to the UK Government notice, both are alleged to be linked to Babbar Khalsa, a UK-proscribed militant organisation. Mr Rehal is allegedly involved in purchasing weapons and other military materials for Babbar Khalsa, while Babbar Akali Lehar is said to promote and support the group’s activities, including recruitment efforts. Both designations are now subject to an asset freeze, and, in the case of Mr Rehal, a UK travel ban.
UK Targets Russia’s GRU in Latest Round of Designations Under Russia and Cyber Sanctions Regimes
The UK Government has designated eight individuals under the Cyber sanctions regime (notice), and four individuals and entities under the Russia sanctions regime (notice). The designations include sanctions on the Russian military intelligence agency (GRU) in its entirety, and also follow the publication of the Dawn Sturgess Inquiry’s final report, which concluded that President Putin personally authorised the GRU to poison Sergei and Yulia Skripal with the nerve agent Novichok in Salisbury in 2018. According to a UK Government press release, the designations include eight cyber military intelligence officers responsible for GRU cyber operations targeting Yulia Skripal and a further three officers responsible for orchestrating hostile activity in Ukraine and across Europe, including plotting a terror attack on Ukrainian supermarkets targeting innocent civilians. The newly added designations are now subject to an asset freeze, and, in the case of individuals, a UK travel ban.
OTSI Publishes Review of its First Year in Operation
The UK’s Office of Trade Sanctions Implementation (“OTSI”) has published its first annual corporate report, covering its operations from October 10, 2024, to October 9, 2025. The report provides the clearest overview to date of how the UK’s newest sanctions enforcement body is exercising its powers and what businesses should expect as OTSI moves into its second year. OTSI reports steady growth in capability, with staff recruited from law enforcement, financial services, and private-sector compliance, supported by investment in new tools to enable intelligence-led investigations. In its first year, OTSI handled 60 licence applications, issuing 12 (full or partial) licences and refusing three, with an average processing time of 82 working days. Enforcement activity was also significant: OTSI received 146 potential breach reports, mostly from the financial services sector under mandatory reporting obligations. Although no monetary penalties have been issued to date, several cases have been referred to HMRC and other agencies, and OTSI highlights that civil penalties will feature in future enforcement actions. OTSI plans to deliver more proactive enforcement, expand its licensing function, and broaden its support to businesses across sectors in the year ahead. Its 2026 priorities include additional sanctions guidance, new digital reporting tools, and the use of actionable intelligence to support real-time compliance monitoring. Businesses involved in trade, shipping, logistics or financial flows connected to high-risk jurisdictions should expect closer scrutiny, greater demands for due diligence, and a more assertive enforcement posture as OTSI continues to scale.
EU Developments
EU Council Renews EU Global Human Rights Sanctions Regime
The EU Council has renewed the EU Global Human Rights Sanctions Regime for another year, until December 8, 2026. Established in December 2020, the sanctions framework targets individuals and entities responsible for, involved in, or associated with serious human rights violations and abuses worldwide. Currently, 135 individuals and 37 entities are listed under the EU Global Human Rights Sanctions Regime and are subject to asset freezes, travel bans within the EU, and a prohibition on making funds or economic resources available to them.
In addition to the renewal, the EU Council amended the entries of 27 individuals and 12 entities in the Annex to Decision 2020/1999.
EU Council and European Parliament Agree on the Phasing out of Russian Gas Imports Under REPowerEU
On December 3, the EU Council and European Parliament reached a provisional agreement on the Commission’s legislative proposal to phase out Russian gas imports under the REPowerEU roadmap to end dependency on Russian energy. The deal confirmed that imports of Russian pipeline gas and liquefied natural gas (LNG) imports will be prohibited six weeks after the Regulation enters into force, while allowing a transition period for existing contracts. For short-term supply contracts concluded before June 17, 2025, the ban will apply from April 25, 2026, for LNG and June 17, 2026 for pipeline gas. For long-term contracts, LNG imports will be prohibited from January 1, 2027, and pipeline gas imports from September 30, 2027 (or at the latest on November 1, 2027, for certain Member States). This transition period aligns with the timeline set under the 19th sanctions package for the full prohibition on the purchase, import, or transfer of LNG originating or exported from Russia.
During negotiations, the EU co-legislators also secured a commitment from the European Commission to present a legislative proposal at the beginning of 2026 to phase out Russian oil imports, with the ban to take effect no later than the end of 2027.
Asia-Pacific Developments
China Urges Global Resistance to Unilateral Sanctions on UN’s First International Day Against UCMs
On December 4, 2025, marking the first International Day Against Unilateral Coercive Measures (UCMs) and the 39th anniversary of the Declaration on the Right to Development, Chinese envoy Sun Lei reportedly urged UN member states and international organizations to unite against unlawful unilateral sanctions. Speaking at an informal UN General Assembly (UNGA) meeting, Sun warned that UCMs—often imposed by a handful of Western nations—violate the UN Charter, undermine international law, infringe on human rights, hinder the UN 2030 Agenda, and “seriously jeopardize multilateralism, the international order and the global governance system.” He stressed UCMs’ disproportionate impact on developing countries, noting that the UNGA has adopted over 100 resolutions rejecting them, and called for revoking them “immediately, unconditionally, and completely.” As a member of the Global South and a target of such measures, China pledged under its Global Governance Initiative to resist sanctions, safeguard an UN-centered international system, and promote equitable global governance. The Ministry of Foreign Affairs (MOFA) echoed this stance, urging the international community to “strengthen solidarity and cooperation, jointly reject unilateralism,” uphold international law, and work toward a fairer global order.
Australia Designates 45 Sanctioned Vessels for Russia Under Autonomous Sanctions Regulations
On December 4, 2025, Australia’s Minister for Foreign Affairs designated 45 vessels as sanctioned for Russia under regulation 8 of the Autonomous Sanctions Regulations 2011. Under the regulation, a vessel can be sanctioned regardless of ownership, registration, or flag, and remains sanctioned even if its name, flag, or registration changes. Designation enables the Minister to order a sanctioned vessel to leave Australia via a specified route or prohibit it from entering certain ports or any Australian port. This move expands Australia’s enforcement capabilities against Russian-linked maritime activities as part of coordinated global sanctions responding to Russia’s actions in breach of international norms.
Putin and Modi Defy US Sanctions with Pledge of Uninterrupted Russian Oil Supply to India
On December 5, 2025, during the annual India-Russia summit in Delhi, Russian President Vladimir Putin reportedly told Indian Prime Minister Narendra Modi that Russia will maintain “uninterrupted” oil shipments to India, underscoring the resilience of bilateral ties despite US sanctions. Modi called energy security a key pillar of the partnership. The meeting marked Putin’s first visit to India since the 2022 invasion of Ukraine, which triggered sweeping Western sanctions, forcing Russia to seek new energy buyers. India, Russia’s second-largest crude oil customer after China, bought 38% of its crude exports in October. US–India tensions have risen after Donald Trump imposed a 25% tariff on Indian imports of Russian oil in August. New Delhi called the tariffs “unreasonable and unjustified” and reaffirmed its decades-old defense and geopolitical ties with Russia. On Indian television a day earlier, Putin openly challenged US interference, noting Washington still buys Russian nuclear fuel, and questioned “why India shouldn’t have the same privilege.”
Australia Sanctions Taliban Officials Over Oppression of Women and Girls
On December 6, 2025, Australia reportedly imposed financial sanctions and travel bans on four senior officials in Afghanistan’s Taliban government, citing a worsening human rights situation, particularly for women and girls. Foreign Minister Penny Wong said the targeted individuals—three Taliban ministers and the group’s chief justice—were directly responsible for restricting women’s access “to education, employment, freedom of movement and the ability to participate in public life,” thereby undermining “good governance” and “the rule of law.” The measures fall under a new Australian framework allowing targeted action to pressure the Taliban over its repression of the Afghan people. Since seizing power in 2021, the Taliban has drawn global condemnation for enforcing sweeping restrictions on women’s rights, despite insisting it respects them under its interpretation of Islamic law. Australia, which withdrew its troops in August 2021 after two decades in Afghanistan, has resettled thousands of evacuees—mostly women and children—while much of Afghanistan’s population remains reliant on humanitarian aid.
