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 Supreme Court Strikes Down IEEPA Tariffs
On February 20, the Supreme Court ruled in Learning Resources Inc. et al. v. Trump that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. For the moment, the Court’s opinion invalidates a major component of President Trump’s foreign policy. However, significant uncertainty remains in the trade landscape. President Trump immediately announced new global tariffs, and the process for tariff refunds remains unclear. We provide a summary of these considerations below. A more detailed analysis of the decision, its impact, and what comes next is available on Steptoe’s Global Trade & Investment Law blog, here.
Background and Decision
In February 2025, President Trump imposed tariffs under IEEPA on imports from Canada, Mexico, and China, to address national emergencies he declared relating to illegal immigration and fentanyl trafficking. These tariffs were followed by the “Liberation Day” tariffs on April 2, 2025, which imposed a 10% global tariff baseline and higher rates on certain countries to reduce significant US trade deficits. In a 6-3 decision, the Court held that IEEPA does not give the President authority to impose tariffs. In short, the majority concluded that Congress did not delegate the tariff power in IEEPA, which, in the majority’s view, functioned as a sanctions authority rather than a revenue-raising tariff statute.
Uncertainty on Tariff Refunds
The Court was silent on what should be done, if anything, regarding refunds for tariffs that were paid. Speaking after the decision on Friday, President Trump stated that the question of refunds “has to get litigated” in lower courts, maybe “for the next five years.” As a result, companies still face uncertainty regarding the process for obtaining refunds on IEEPA tariffs that they have already paid. As discussed in a prior post, the difficulty of securing a refund will depend in significant part on how the Trump administration approaches the process.
We note that under the long-standing procedures for claiming refunds of duties or tariffs, importers typically must file a protest with US Customs and Border Protection (CBP) within 180 days of liquidation of a specific entry. However, in December 2025, the CIT issued an opinion stating that this “protest first, then appeal” strategy was not necessary for companies to protect any refunds resulting from the invalidation of the IEEPA tariffs. In addition, hundreds of companies have been filing lawsuits to protect any refunds owed. On December 23, 2025, the CIT issued a standing order that automatically stayed all newly filed suits from importers seeking IEEPA tariff refunds until the resolution of Learning Resources. The CIT has also stated that it would impose case management procedures if needed after the Supreme Court’s decision. That being said, companies may still find it prudent to file protests due to the novelty of this situation.
New Tariffs
Shortly after the Supreme Court’s ruling, President Trump imposed a new 10% global tariff, effective on February 24, under Section 122 of the Trade Act of 1974. However, the President may only impose a Section 122 tariff for a maximum of 150 days, with any extension beyond that period requiring congressional approval. On Saturday, President Trump announced that the global tariff would be increased to 15 percent, the maximum amount authorized under Section 122.
President Trump also said the administration will initiate new trade investigations under Section 301 of the Trade Act of 1974, which grants the President the authority to impose tariffs in response to unfair foreign trade practices or violations of US trade agreements. Section 301 does not impose limits on the level or duration of tariffs, but it does require a formal investigation that can take up to a year to complete.
The President could also consider using Section 338 of the Tariff Act of 1930 to impose future tariffs. Section 338 authorizes the President to impose tariffs of up to 50% on countries that take discriminatory trade measures, directly or indirectly, against the United States. Section 338 grants the President broad discretion to determine what constitutes discrimination against US commerce. It also allows the President to take further retaliatory measures if countries subject to Section 338 tariffs continue or escalate their discriminatory conduct. This provision has not been invoked in decades, and no President has ever used it to impose tariffs.
For more on the impact of the Court’s ruling and the evolving trade landscape, please reach out to a member of Steptoe’s Trade Policy practice.
OFAC Targets Mexican Timeshare Fraud Network
On February 19, OFAC sanctioned a timeshare fraud network led by Cartel de Jalisco Nueva Generacion (CJNG), a Foreign Terrorist Organization (FTO) and Specially Designated Global Terrorist (SDGT). Specifically, the action targeted Kovay Gardens, a Mexican timeshare resort, as well as five Mexican individuals and 17 Mexican entities associated with the network.
In an accompanying statement, Secretary of the Treasury Scott Bessent said that Treasury will continue its efforts to “completely eradicate the cartels’ ability to generate revenue and terrorize Americans,” in line with President Trump’s Executive Order calling for the “total elimination” of cartels’ presence in and ability to threaten the United States.
Treasury Sanctions RSF Commanders
On February 19, OFAC sanctioned three commanders of the Rapid Support Forces (RSF), a Sudanese paramilitary group. OFAC alleged that the three commanders were involved in the RSF’s 18-month siege and ultimate capture of El-Fasher, in which the RSF perpetrated a campaign of human rights abuses.
OFAC previously sanctioned the leader of the RSF, Mohammad Hamdan Daglo Mousa (Hemedti), on January 7, 2025. On the same day, the State Department concluded that the RSF and allied militias had committed genocide in Sudan.
OFAC Amends Venezuela-related General License
On February 18, OFAC issued an amended Venezuela-related General License (GL) 50A, “Authorizing Transactions Related to Oil or Gas Sector Operations in Venezuela of Certain Entities.”
GL 50A amends GL 50 by adding Établissements Maurel & Prom SA (“Maurel & Prom”) to the Annex of authorized entities, thereby extending the authorization for certain transactions ordinarily prohibited by the Venezuela Sanctions Regulations (VSR), including those involving the Government of Venezuela, Petróleos de Venezuela, S.A. (PdVSA), or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, that are related to oil or gas sector operations in Venezuela to Maurel & Prom and their subsidiaries.
On the same day, OFAC issued two new FAQs: FAQ 1236 and FAQ 1237 related to Venezuela-related GLs 30B, 46A, and 48. For more analysis on recent sanctions developments regarding Venezuela’s oil and gas sector, please see our recent posts on February 9 and February 18.
UK Developments
OFSI Launches Call for Evidence on Ownership and Control Test
OFSI has launched a call for evidence on how the UK’s ownership and control test within the financial sanctions regime operates in practice. The review seeks views from firms and representative bodies on how the rules are applied, particularly in complex corporate structures where UK designated persons may exercise influence indirectly. While the ownership and control provisions are intended to prevent circumvention through layered entities, trusts or proxy arrangements, the challenges associated with assessing “hypothetical control” can generate additional compliance costs and legal risk. Therefore, OFSI is inviting evidence on how frequently issues of hypothetical control arise, their impact on business decisions including derisking, and whether existing legal concepts of control provide sufficient clarity. The objective of the call for evidence is to ensure the UK financial sanctions regime remains effective against evasion while proportionate and workable for legitimate businesses. The call for evidence closes on April 13, 2026, with a stakeholder webinar scheduled for March 3, 2026.
Company Director Jailed for Export Controls Violation
HM Revenue and Customs has secured a prison sentence of two years and one month against a company director for attempting to export military-grade night vision rifle sights to Hong Kong without export licensing. According to a Notice to Exporters published regarding the enforcement action, eight items were seized at Manchester airport in February 2022 and April 2023 and a further ten unlicensed shipments were identified following a search of the director’s home. The director misdescribed the items as “low-value cameras” to conceal their controlled status. The action highlights a continuing focus on UK export controls enforcement and a willingness to take action against individuals as well as companies for infractions of UK export licensing requirements.
EU Developments
EU Council Designates the Islamic Revolutionary Guard Corps as a Terrorist Organization
The EU Council has formally designated the Islamic Revolutionary Guard Corps (IRGC) as a terrorist organization under the EU terrorist list, established by Common Position 2001/931/CFSP and Regulation (EC) No 2580/2001. The designation entails an asset freeze and a prohibition from making funds and economic resources available to the IRGC.
This is the second time the IRGC is targeted under an EU sanctions regime. The IRGC is already listed under the separate EU sanctions regime and subject to the following sanctions: (i) an asset freeze and a prohibition to make available funds, other financial assets and economic resources, directly or indirectly, to or for the benefit of the IRGC; and (ii) a prohibition to provide financial services to, or for the benefit of, the IRGC. This means that, from an EU sanctions perspective, the IRGC is now subject to asset freeze and making available sanctions under two separate EU sanctions regime, i.e., the EU sanctions against Iran and the EU specific measures to combat terrorism.
Following this update, there are currently 13 individuals and 23 groups and entities subject to restrictive measures under the EU terrorist list.
Hungary to Block 20th Sanctions Package Against Russia
Hungary’s Foreign Minister Péter Szijjártó announced that Hungary will block the adoption of the EU’s 20th sanctions package against Russia at the scheduled Foreign Affairs Council meeting on February 23. According to Szijjártó, Hungary will not allow decisions to move forward until Ukraine resumes oil transit to Hungary and Slovakia via the Druzhba pipeline.
Hungary’s Prime Minister Viktor Orbán confirmed the planned blockade, asserting that Hungary will not stand by while the so-called “Friendship oil pipeline” is shut down. Orbán further announced that Hungary will secure its fuel supply and take necessary countermeasures until shipments resume. The countermeasures include suspending diesel exports from Hungary to Ukraine, refusing any military loans to Ukraine, and withholding approval for the proposed 20th sanctions package.
On the morning of the Foreign Affairs Council, High Representative of the EU Kaja Kallas addressed the press, indicating that there will not be progress on the sanctions package during the February 23 meeting, though efforts to advance discussions will continue.
