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
Bessent Says Trump Administration May Alter Russia Sanctions to End the War in Ukraine
Secretary of the Treasury Scott Bessent recently stated in an interview that the US is prepared to either rollback or increase sanctions on Russia, depending on how talks to end the war in Ukraine proceed. Bessent added that Trump is “committed to ending this conflict very quickly.” Relatedly, Bessent said that Ukrainian President Volodymyr Zelenskyy had not yet committed to sign a proposed minerals deal, which in Bessent’s words would be part of an “elegant plan” to bring Ukraine closer to the US. Zelenskyy has rejected the Trump administration’s proposal that Ukraine repay US wartime aid with minerals.
Bipartisan Group of Lawmakers Call for Transfer of Frozen Russian Assets to Ukraine
During the Munich Security Conference, Sens. Jim Risch (R-ID) and Jeanne Shaheen (D-NH) —the Chairman and Ranking Member of the Senate Foreign Relations Committee, respectively—as well as Sens. Lindsey Graham (R-SC) and Sheldon Whitehouse (D-RI), called on the Trump administration and Group of Seven (G7) allies to “unlock” the value of approximately $300 billion in frozen Russian assets for the benefit of Ukraine. In particular, the Senators suggest either seizing the assets for Ukraine or using the assets as collateral for a larger loan to Ukraine.
The letter from senior Members of Congress came just days before Trump administration officials began negotiations with Russia concerning an end to the war in Ukraine. It also came just before President Trump delivered scathing criticism of Ukrainian President Volodymyr Zelenskyy, calling him a “Dictator without Elections” and lamenting the aid the US and allies have given Ukraine since Russia’s invasion. Although the letter suggests there is still strong bipartisan Congressional support for aid to Ukraine, it is unclear whether Congressional Republicans will continue to back Ukraine given Trump’s views on Zelenskyy and US aid to Ukraine.
US Designates Cartels as Terrorist Organizations
The US has formally named eight cartels as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs). These determinations were made by Secretary of State Marco Rubio in accordance with President Trump’s recent Executive Order (EO), “Designating Cartels and Other Organizations as Foreign Terrorist Organizations and Specially Designated Global Terrorists,” which was signed on January 20, 2025. As we have previously noted, the primary effect of an FTO designation is to prohibit US persons or those subject to US jurisdiction from knowingly providing “material support or resources” to an FTO, whereas the primary effect of an SDGT designation is the imposition of blocking sanctions. Given the reach of the cartels named in the determinations, companies with business interests or investments in certain regions with cartel activity may be impacted by the determinations.
Attorney General Pam Bondi also recently issued a memorandum directing the DOJ to, among other things, pursue a “total-elimination policy” regarding cartels and transnational criminal organizations. This suggests that enforcement of these designations is likely to be a priority for the Trump administration.
OFAC Sanctions Rwandan Minister and Militant Leader
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned James Kabarebe, Rwanda’s Minister of State for Regional Integration, as well as Lawrence Kanyuka Kingston, a March 23 Movement (M23) and Congo River Alliance senior member, for their alleged roles in enabling M23 and the Rwandan Defense Force’s (RDF) destabilizing activities in eastern Democratic Republic of Congo (DRC).
M23 began their most recent offensive in eastern DRC shortly after President Trump’s inauguration in January 2025. Since then, the group has made rapid progress. M23’s capture of Goma, the capital and largest city in North Kivu Province, as well as other neighboring territories drew condemnation from the Chairman of the Senate Foreign Relations Committee, Sen. Jim Risch (R-ID), and a joint statement from the Group of Seven (G7) foreign ministers calling for an end to the conflict. More recently, M23 has forced DRC troops to withdraw from the city of Bukavu, the capital of the South Kivu Province.
In her remarks to the United Nations Security Council (UNSC), US Chargé d ’Affaires ad interim Dorothy Shea stated that the US is prepared to work with other relevant UN members on sanctions of actors in the region.
Lutnick Confirmed as Secretary of Commerce
The Senate voted 51-45 to confirm Howard Lutnick as the next Secretary of Commerce. Lutnick will now oversee multiple key bureaus and agencies, including the Bureau of Industry and Security (BIS) and International Trade Administration (ITA).
During his confirmation hearing, Lutnick stated he had a very “jaundiced” view of China, adding that “they only care about themselves and seek to harm us.” To combat this, and partly in response recent Chinese AI advances, Lutnick stated his support for increased controls on US exports of certain technologies to China. He also stated that he planned to “empower BIS with tariffs to enforce strict policies” and that export controls must be “backed by tariffs” in order to be fully effective.
UK Developments
UK Warns of Risks of a Bad Peace Deal with Russia
The UK has announced the imposition of fresh sanctions against members of Putin’s inner circle and companies at the intersection of the Russian energy and defence sectors alongside a joint op-ed by Foreign Secretary Lammy and Defence Secretary Healey outlining the importance and contours of a strong and durable peace in Ukraine. They state that a bad peace would embolden China, Iran, and North Korea, as well as harm European security and economies. For example, Russia’s 2022 invasion of Ukraine took one and a half percent off global GDP and added three percent to European inflation. The need for President Zelensky to participate in peace talks about Ukraine and for the UK to play its part in giving President Zelensky the strongest possible hand in those talks was underscored. In support of that commitment, the Secretaries of State emphasized the need to “turn up the pressure on Russia,” with sanctions on energy being a particular priority.
Prospect of Rwanda Sanctions Rises as Tensions in DRC Mount
During a speech at the G20 Foreign Ministerial Meeting in South Africa, Foreign Secretary Lammy highlighted the Rwandan Defence Force operations in the eastern Democratic Republic of Congo (DRC) as a blatant breach of the UN Charter that risks escalating into a regional conflict, noting that further breaches of the DRC’s sovereignty “will have consequences.” Foreign Secretary Lammy’s statement built on previous comments by Ambassador Kariuki, the UK Deputy Permanent Representative to the UN, which suggested the UK is actively considering a range of steps in coordination with its international partners. The US imposed sanctions on a number of individuals and entities in response to the situation in the DRC on February 20, 2025.
EU Developments
EU Agrees on 16th Sanctions Package Against Russia
On Wednesday, February 19, the European Union reached an agreement on its 16thsanctions package against Russia, set to be adopted by EU foreign ministers on Monday, coinciding with the third anniversary of Russia’s invasion of Ukraine. Discussions on the new sanctions package focused on measures such as banning aluminum imports, a proposal previously stalled due to economic concerns from some member states. In November 2023, the EU had already banned certain aluminum products, including aluminum wire, foil, and extruded items. However, semi-finished aluminum had not yet faced any trade restrictions.
The sanctions package also alluded to targeting video game consoles and software for oil and gas exploration, as well as potentially extending sanctions to 50 new entities. The final package reportedly includes a phased-in ban on importing Russian aluminum products, increased measures targeting Russia's crude oil sales, and restrictions on the sales of video game consoles. The objective of the package is also to undermine Russia's manufacturing strength by implementing export prohibitions on items such as chromium and chemical precursors (compounds used to produce other chemicals). Additionally, it targets 73 "shadow fleet" tankers that Russia uses to export crude oil, circumventing existing sanctions bringing the total number of such ships to 152. The package also imposes sanctions on 13 Russian banks and various individuals and entities deemed to be supporting Russia's war efforts. As had been anticipated, this package does not include a ban on Russian liquefied natural gas (LNG).
The 16thpackage comes as the EU seeks to maintain pressure on Moscow and bolster support for Kyiv, particularly as there are concerns that US President Donald Trump might relax US sanctions as part of a peace agreement with Russia. US Secretary of State Marco Rubio suggested that EU sanctions could play a role in these negotiations, underscoring the importance of EU participation in any peace discussions. EU officials has expressed concerns about the potential weakening of their sanctions' impact if the US decides to lift its restrictions.
Sanctioned Russian Ship Maia-1 Approaches Europe via Suez Canal
The Maia-1, a Russian ship sanctioned for transporting arms from North Korea, is set to enter the Mediterranean through the Suez Canal, marking its first entry into European waters. Owned by MG-Flot and sanctioned by the US, EU, and UK, the vessel is heading to a Russian port on the Baltic coast for an LNG facility project. The Maia-1's journey, starting from Vladivostok and involving cargo pickup near Shanghai, challenges the western sanctions system. The ship's entry into European waters raises significant questions about the enforcement of sanctions as it tests the resolve of the West to maintain economic pressure on Russia amid ongoing support for Ukraine.
