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 Expands Authorizations for Transactions Involving Venezuelan Oil
OFAC has continued to issue general licenses (GLs) in support of the Trump administration’s plans to expand the production of Venezuela’s oil industry and US access to the industry. Following the issuance of GL 46, “Authorizing Certain Activities Involving Venezuelan-Origin Oil,” on January 29, which we covered previously, OFAC issued several new FAQs regarding GL 46 and two new GLs, as discussed below.
On February 3, OFAC issued GL 47, “Authorizing the Sale of U.S.-Origin Diluents to Venezuela.” Under GL 47, OFAC authorizes transactions prohibited by the VSR, including those involving the Government of Venezuela (“GoV”), Petróleos de Venezuela, S.A. (“PdVSA”), or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest (“PdVSA Entities”), that are ordinarily incident and necessary to the exportation, reexportation, sale, resale, supply, storage, marketing, delivery, or transportation of US-origin diluents to Venezuela, provided that any contract for such transactions with the GoV, PdVSA, or PdVSA Entities, is governed by US law, and that any dispute resolution under the contract occurs in the US.
Similar to GL 46, GL 47 confirms that the authorized transactions include arranging of shipping and logistics services, including chartering vessels, obtaining marine insurance and protection and indemnity (P&I) coverage, and arranging port and terminal services, including with port authorities or terminal operators that are part of the GoV. Notably, GL 47 also authorizes processing of payments to or with port authorities or terminal operators that are part of the GoV.
As with GL 46, GL 47 introduces a reporting requirement for persons that export, reexport, sell, resell, or supply US-origin diluents to Venezuela pursuant to the general license. Such persons must provide a report to the Departments of State and Energy that identifies certain information about each transaction within ten days after execution, and every 90 days thereafter while the transaction is ongoing.
GL 47 does not authorize, among other things, transactions involving a person in or organized under the laws of Iran, North Korea, or Cuba, or any entity that is owned or controlled, directly or indirectly, by or in a joint venture with such persons. As opposed to GL 46, GL 47 does not explicitly prohibit transactions involving persons in or organized under the laws of Russia or China, though separate sanctions restrictions may still apply.
On February 2, OFAC issued GL 5U, “Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After March 20, 2026.” GL 5U is the latest extension in the long-running delay in the effective date of GL 5’s authorization of transactions related to, the provision of financing for, and other dealings in the PdVSA 2020 8.5 Percent Bond that would be prohibited by Executive Order (EO) 13835, as amended. In addition to issuing GL 5U, OFAC also amended FAQ 595.
For more information about GLs 5U, 46, and 47, please reach out to a member of Steptoe’s Economic Sanctions team.
Trump Administration Announces New Sanctions on Iran as Officials Meet in Oman
On February 6, President Trump issued an executive order establishing a framework for the imposition of secondary tariffs on countries that directly or indirectly purchase, import, or otherwise acquire goods or services from Iran. President Trump initially announced “25 percent” secondary tariffs targeting countries importing from Iran on January 12. Notably, the executive order only sets 25 percent as an “example” of a tariff that could be issued under the new authority. This action follows a January 29 executive order authorizing secondary tariffs on countries selling oil or petroleum products to Cuba. President Trump has now issued executive orders authorizing secondary tariffs targeting Cuba, Russia, Iran, and Venezuela.
On the same day, the State Department sanctioned 15 entities, two individuals, and 14 vessels, it said are part of Iran’s “shadow fleet,” for their alleged connection to the illicit trade in Iranian petroleum, petroleum products, and petrochemical products. The State Department said that the US will act to “hold both the Iranian regime and its partners accountable” so long as the Iranian regime continues to attempt to evade sanctions and generate oil and petrochemical revenues, which State said the Iranian regime uses to fund oppressive behavior at home and support terrorist activities and proxies abroad.
The State Department’s sanctions follow recent actions taken by OFAC to either curb the Iranian regime’s sources of funding or hold its officials accountable for violent crackdowns on public protests. This includes sanctions announced on January 30, January 23, and January 15.
These actions also come as the US and Iranian delegations engage in indirect talks in Oman to address, among other things, the future of Iran’s nuclear program.
UK Developments
OFSI Announces New Regime Pages for Sanctions Notices
OFSI has confirmed that, following the closure of the OFSI Consolidated List of Asset Freeze Targets, new regime specific pages have been launched on the UK Sanctions List. These pages will host all future sanctions notices relating to designation changes under each regime. While the legacy financial sanctions regime pages will remain accessible for reference, they will no longer be updated. Businesses should ensure they are using the new regime pages as the authoritative source for ongoing designation updates.
OFSI Amends FAQ Clarifying When to Refuse Business to UK Designated Persons
OFSI has expanded its Financial Sanctions Guidance with FAQ 133, which provides more detailed guidance on when relevant firms subject to mandatory sanctions reporting obligations are expected to submit reports to OFSI after refusing business to a UK designated person. The updated FAQ confirms that the obligation to report turns less on whether a transaction ultimately proceeds, and more on the nature and depth of the firm’s interaction with the UK designated person and the information obtained in the course of business. OFSI explains that reporting is expected when a firm has progressed onboarding or due diligence to a meaningful stage and acquired direct knowledge about a UK designated person or information that could be relevant to sanctions enforcement. By contrast, OFSI does not expect reporting where interaction with a UK designated person is minimal and occurs at a very early screening stage. The revised FAQ reinforces a risk based approach. Firms are expected to exercise judgement and focus reporting on situations where their engagement with a UK designated person generates information that could assist OFSI’s understanding of sanctions exposure, potential breaches or evasion risks, rather than adopting a blanket reporting approach for every refused interaction.
UK to Legislate to Proscribe the Iranian Revolutionary Guard
The UK Government has announced that it will introduce new legislation to enable the proscription of the Iranian Revolutionary Guard Corps (“IRGC”) under the Terrorism Act 2000. The IRGC is already subject to extensive UK financial sanctions but cannot currently be proscribed as a terrorist organisation without bespoke legislation due to its status as a state entity. The move follows similar announcements by the EU and reflects growing international alignment. If adopted, proscription would create new criminal offences and expand enforcement powers beyond the existing sanctions framework.
UK Targets Perpetrators of Human Rights in Latest Designations under Iran Regime
The UK Government has made 11 new designations under the Iran sanctions regime (notice). According to a UK Government press release, the designations include one entity and 10 individuals, including Minister of the Interior, police chiefs and prolific Iranian Revolutionary Guard Corps (IRGC) members, for their role in recent violence committed against protestors in Iran. The announcement follows commitments set out by both the Prime Minister and the Foreign Secretary earlier this month to bring forward sanctions to hold the Iranian authorities to account for its violent response to recent peaceful protests. The newly added designations are now subject to an asset freeze, and, in the case of individuals, a UK travel ban.
UK Targets Sudanese Armed Forces in Latest Round of Designations under Sudan Regime
The UK Government has made six new designations under the Sudan sanctions regime (notice). According to a UK Government press release, the designations include six individuals suspected of committing atrocities in the war in Sudan, or fuelling the conflict through the supply of mercenaries and military equipment. In pertinent part, these measures target senior commanders in both the Rapid Support Forces (RSF) and Sudanese Armed Forces (SAF), whose soldiers are suspected of carrying out massacres against the civilian population. The newly added designations are now subject to an asset freeze and a UK travel ban.
OFSI Amends Russia Humanitarian Assistance General Licence and Two FAQs
OFSI has amended General Licence INT/2022/1947936 for humanitarian activity (the “GL”). The GL was originally granted under regulation 64 of The Russia (Sanctions) (EU Exit) Regulations 2019 and grants certain persons permission to perform activities that support basic human needs in relation to the conflict in Ukraine and non-government controlled Ukrainian territory. In pertinent part, Annex I of the GL was amended to remove Bank FC Otkritie and replace it with BM-Bank, reflecting their merger. Any persons intending to use the GL should consult the copy of the licence for full details of the permissions and usage requirements. Additionally, associated FAQs 147-148 have been amended to reflect the amendment to the GL.
EU Developments
EU Presents 20th Sanctions Package Against Russia
On February 6, European Commission President Ursula von der Leyen unveiled the EU’s 20th sanctions package against Russia. The proposal targets energy, financial services, and trade, with the aim of further increasing pressure on Russia to bring it to the negotiation table with Ukraine.
In the energy sector, the new sanctions package introduces a full maritime services ban for Russian crude oil, to be enacted in coordination with international partners following a G7 decision. The package also expands restrictive measures against Russia’s shadow fleet by adding 43 vessels to the sanctions list, bringing the total to 640. As a further step, the 20th sanctions package will impose prohibitions on the provision of maintenance and other services for liquefied natural gas (LNG) tankers and icebreakers, in order to limit Russia’s ability to develop future gas export projects. These measures are intended to complement the LNG import ban adopted with the 19th sanctions package and the RePowerEU Regulation.
The banking and crypto sectors will also face expanded restrictions. The proposal includes the designation of 20 additional Russian regional banks and measures targeting cryptocurrencies, including companies that trade them and platforms that facilitate crypto transactions, with the aim of closing remaining circumvention channels. The sanctions package will also target several banks in third countries that are involved in facilitating illegal trade in sanctioned goods.
Regarding trade, the 20th sanctions package tightens export restrictions on a broad range of goods and services, including rubber, tractors and cybersecurity services. It further introduces new import bans on metals, chemicals, and critical minerals not yet subject to sanctions, valued at more than €570 million. Additional export restrictions will apply to items and technologies linked to Russia’s military effort, such as materials used in the production of explosives. The proposal also introduces a quota to cap existing imports of ammonia.
The Commission further proposes activating, for the first time, the anti‑circumvention tool of last resort, which would prohibit the export of computer numerical control machines and radios to jurisdictions considered at high risk of re-exporting these items to Russia.
Lastly, the proposal includes strengthened legal safeguards for EU companies, aiming to protect them from violations of intellectual property rights or from unfair expropriation in Russia arising from abusive court rulings connected to sanctions.
Discussions among Member States are set to begin shortly, with the goal of reaching agreement on the package by February 24, the fourth anniversary of Russia’s full-scale invasion of Ukraine. The Foreign Affairs Council is scheduled to meet on February 23, 2026.
CJEU Judgment on the Interpretation of Russia Import Ban
The Court of Justice of the European Union (CJEU) delivered its judgement in Case C-619/24 in response to a request for preliminary ruling from the Düsseldorf Finance Court concerning the prohibition in Article 3i(1) of Regulation 833/2014 on importing goods “generating significant revenues for Russia”.
The Court confirmed that the import ban applies to any good falling under the CN codes listed in Annex XXI to Regulation 833/2014, without it being necessary to verify for each transaction whether it generates significant revenues for the Russian Federation. The inclusion of a good in Annex XXI reflects the EU Council’s determination that it falls within the scope of the prohibition. The Court also ruled that the registration exception in Article 3i(3ad) for vehicles already in the EU on December 19, 2023 does not apply to vehicles that were in the EU as a result of a breach of the import ban.
Asia-Pacific Developments
Australia Announces New Sanctions Listings Related to Iran
On February 3, 2026, Australia’s Department of Foreign Affairs and Trade announced the listing of 20 individuals and 3 entities under the Autonomous Sanctions Regulations 2011 for their roles in Iran’s nuclear and missile programs, human rights abuses, and actions undermining governance and the rule of law. The designated individuals include senior Iranian military, security, and government figures, while the listed entities comprise components of the Islamic Revolutionary Guard Corps, including the Cyber Defence Command, the Quds Force Unit 840, and the IRGC Intelligence Organisation. The listings impose targeted financial sanctions and travel bans, and any dealings with controlled assets of these persons or entities are prohibited without authorisation.
Singapore Emphasizes International Coordination on Sanctions‑Evasion Risks in Maritime Shipping
On February 4, 2026, Singapore’s Acting Minister for Transport Jeffrey Siow outlined the Government’s efforts to coordinate with international partners to address illegal or deceptive shipping practices linked to sanctions evasion. Siow noted that such activities often occur just outside Singapore’s territorial waters and highlighted ongoing cooperation with Indonesia, Malaysia, and Thailand through information sharing and coordinated patrols in the Straits of Malacca. Singapore also monitors vessel movements under the Mandatory Ship Reporting System and reports breaches of International Maritime Organization requirements to relevant flag states. He reaffirmed that Singapore fully implements United Nations Security Council resolutions and may deny entry or detain vessels that fail to comply with domestic or international maritime obligations.
Hong Kong Court Sentences Jimmy Lai Over Alleged Sanctions‑Related Foreign Collusion
On February 9, 2026, Hong Kong media tycoon and pro‑democracy figure Jimmy Lai was sentenced to 20 years in prison after being convicted of conspiring with others to collude with foreign forces, including by lobbying overseas governments to impose sanctions or other punitive measures on China and Hong Kong.
UANI Report Highlights Ongoing Iranian Sanctions Evasion Through Malaysian Waters
United Against Nuclear Iran (UANI) issued a statement underscoring extensive Iranian sanctions‑evasion activity facilitated by ship‑to‑ship oil transfers occurring within Malaysia’s Exclusive Economic Zone. According to UANI, satellite imagery shows that ghost fleet tankers transporting Iranian crude to China routinely anchor off Eastern Johor and conduct transfers without scrutiny, with roughly 60 such vessels observed in the area on January 11, 2026. UANI noted that these operations persist despite earlier Malaysian commitments to tighten enforcement and urged stronger measures to address the continued use of Malaysian waters as a hub for Iranian oil smuggling and sanctions evasion activity.
