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
State Department Condemns Sanctions on Israeli Officials by US Allies
The US has publicly criticized the coordinated sanctions that Canada, Norway, New Zealand, Australia, and the UK imposed on Israel’s Finance Minister, Bezalel Smotrich, and National Security Minister, Itamar Ben Gvir. Secretary of State Marco Rubio asserted that the sanctions “do not advance U.S.-led efforts” to end the war, and implored the sanctioning governments to “not forget who the real enemy is” and to reverse their sanctions.
Relatedly, Reuters reported that the Trump administration is discouraging governments across the world from attending a United Nations (UN) conference, co-hosted by France and Saudi Arabia, on a possible two-state solution for Israel and Palestine. According to Reuters, the US has sent cables to multiple countries warning of diplomatic consequences if they pursue what it views as “anti-Israel” actions, including the recognition of a Palestinian state.
The Trump administration has recently imposed sanctions against individuals that it has deemed to be engaged in transgressions against Israel. The US, for instance, recently sanctioned two judges at the International Criminal Court (ICC) who authorized the issuance of arrest warrants targeting Israel’s Prime Minister, Bejamin Netanyahu, and former Minister of Defense, Yoav Gallant. It had also previously used the same authority, Executive Order (E.O.) 14203, to sanction ICC Prosecutor Karim Khan.
Treasury Sanctions “Sham Charities” Linked to Hamas and the PFLP
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned five individuals and five “sham charities” for their alleged financial support of Hama’s Military Wing and its terrorist activities. OFAC also sanctioned one entity for its alleged affiliation with the Popular Front for the Liberation of Palestine (PFLP), a designated Foreign Terrorist Organization (FTO) and Specially Designated Global Terrorist (SDGT). According to OFAC, the sanctioned organizations and the individuals who run them exploit their statuses as non-profit organizations to raise funds under the façade of humanitarian support when, in actuality, they funnel the money to terrorist organizations. OFAC asserts that Hamas and the PFLP have long used this tactic to misappropriate public support for legitimate humanitarian causes. The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) published an industry alert to financial institutions regarding Hamas financing activities in October 2023.
OFAC Sanctions Faction of Sinaloa Cartel
OFAC has sanctioned Los Chapitos, a faction of the Mexico-based FTO and SDGT Sinaloa Cartel, for its alleged facilitation of fentanyl trafficking and production. Secretary of the Treasury Scott Bessent stated that Los Chapitos is “at the forefront of fentanyl trafficking into the United States” and that the Treasury Department is “executing on President Trump’s mandate to completely eliminate drug cartels . . . [and] maximizing all available tools to stop the fentanyl crisis . . .”
OFAC also designated two alleged leaders of Los Chapitos – who are also the sons of incarcerated Sinaloa Cartel leaders Joaquin “El Chapo” Guzman Loera – as well as a regional network of alleged Los Chapitos associates and businesses. OFAC coordinated with the US Drug Enforcement Administration (DEA) on the designations.
DOJ Unseals Indictment of Russian Crypto Mogul for Alleged Sanctions Evasion
The Department of Justice (DOJ) unsealed a 22-count indictment charging Iurii Gugnin, the Russian founder and president of Evita Investments Inc. (“Evita Investments”) and Evita Pay Inc. (“Evita Pay”) (together, “Evita”), with, among other things, wire and bank fraud, money laundering, violation of the International Emergency Economic Powers Act (IEEPA) and failing to implement an effective anti-money laundering (AML) compliance program.
Specifically, the DOJ alleges that Gugnin moved over “half a billion dollars” through the US financial system via the use of cryptocurrency, primarily the stablecoin Tether, to the benefit of sanctioned Russian banks and to help Russian end-users acquire sensitive technology. The DOJ further alleges that Gugnin repeatedly lied to the banks and cryptocurrency exchanges with which he conducted business, telling them that Evita did not deal with entities in Russian or entities that were sanctioned when, in fact, Evita facilitated payments in funds held at sanctioned Russian banks.
The indictments comes as the Senate voted, by a margin of 68-30, to pass a motion to invoke cloture on the GENIUS Act (S. 1582), which is Congress’s first major attempt to establish a regulatory framework for payment stablecoins.
A key argument by opponents of the GENIUS Act has been the concern regarding the strength of its AML provisions. Senator Elizabeth Warren (D-MA), the Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, has long expressed such concerns, and recently urged her colleagues to vote against the GENIUS Act unless “critical fixes are made.” In her remarks, Warren cited the new indictment against Gugnin as an example of why stronger regulations are needed.
Rubio Reportedly Seeking Sanctions Investigation of Harvard
According to a report from the New York Times, Secretary Rubio is pushing to investigate whether Harvard University violated federal sanctions by collaborating on a health insurance conference in China that may have included sanctioned persons. The Times reports that Rubio signed off on a letter recommending that OFAC opens the investigation within the past month, though neither the Treasury or State Department has confirmed that an investigation is ongoing. Harvard has been the subject of intense scrutiny by the Trump administration in recent months.
UK Developments
UK Designates Two Israeli Ministers
On June 10, 2025, the UK designated two Israeli ministers, Itamar Ben-Gvir and Bezalel Smotrich, under the Global Human Rights Sanctions Regime for engaging in, inciting, promoting, and/or supporting activity that amounts to serious human rights abuses against Palestinian individuals in the West Bank. The sanctions were imposed in coordination with equivalent measures by Australia, Canada, New Zealand, and Norway. The two men are now subject to an asset freeze, making available, and director disqualification sanctions, as well as a UK travel ban. In announcing the designations, it was emphasised that the measures “do not deviate from our unwavering support for Israel’s security and we continue to condemn the horrific terror attacks of 7 October by Hamas.” Nonetheless, the sanctions represent a significant development and reflect increased concern from many of Israel’s Western partners, who have taken unprecedented steps to condemn – and now impose sanctions – in response to the current situation in Gaza. The Foreign, Commonwealth, and Development Office also emphasised that the Messrs. Ben-Gvir and Smotrich were being designated in their personal capacity and that the sanctions were not intended to flow down to the Israeli ministries that they head up.
OFSI Amends GTLK General Licence
On June 12, 2025, OFSI amended General Licence INT/2023/3263556, which authorises certain insolvency-related payments and activities involving GTLK Europe, GTLK Capital, and their subsidiaries. The amendments incorporate sanctions on the provision of financial services for the purpose of foreign exchange reserve and asset management to certain Russian institutions within the scope of the licence and clarify that any resulting payments must be credited to that person’s account, add certain new definitions relevant to the interpretation of the licence, clarify that any funds made available to UK designated persons must be held in a frozen account and any economic resources made available must be treated as frozen, and expand the reporting requirement under the licence.
EU Developments
EU Presents 18th Sanctions Package Against Russia
On June 10, European Commission President Ursula von der Leyen and High Representative Kaja Kallas introduced the EU’s 18th sanctions package against Russia. The proposal targets Russia’s energy and banking sectors, alongside its military industry, aiming to increase pressure and advance efforts toward a ceasefire in its ongoing war against Ukraine.
In the energy sector, the new sanctions package seeks to tighten restrictions by adding 77 shadow fleet vessels, used to circumvent oil transport bans, to the list of those prohibited from accessing EU ports. Additionally, the package proposes to introduce a ban on the import of refined products produced from Russian crude oil. The 18th sanctions package also intends to lower the price cap on Russian oil from its current level of 60 dollars per barrel, as set by the G7 coalition, to 45 dollars per barrel. Furthermore, a new transaction ban would be introduced for Nord Stream 1 and Nord Stream 2, preventing EU operators from engaging in any transactions related to those pipelines.
The banking sector would also face expanded restrictions. The proposal converts the current SWIFT ban on certain Russian banks into a full transaction ban and extends this restriction to 22 additional banks and financial entities in third countries that help Russia evade sanctions. The Russian Direct Investment Fund, along with its subsidiaries and investment projects, would also be sanctioned under the proposed measures.
In the military sector, the proposed restrictive measures aim to further undermine Russia’s ability to sustain its war efforts. The package proposes listing 22 new entities, including companies in China and Belarus, that are directly involved in the production of weapons or in supporting such activities. Stricter controls on dual-use goods and technologies are also included in the proposal to limit Russia’s access to critical resources for its military operations.
While several Member States, including France, Germany, Italy, and Poland have reportedly welcomed the 18th sanctions package, others, such as Slovakia and Hungary, have expressed concerns. Slovak Prime Minister Robert Fico has stated that he will oppose any measures that compromise national interests. Despite these reservations, an agreement on the package is expected to be reached by the end of June. Discussions among Member States on the proposal are set to begin this week.
Advocate General Opinion Backs EU Sanctions Criterion Targeting Russian Businesspersons
Advocate General Medina of the European Court of Justice (ECJ) recently issued a series of non-binding opinions supporting the legality of the EU sanctions criterion relating to leading businesspersons whose economic activities provide substantial revenue to the Russian government.
The sanctions, introduced in February 2022 through amendments to Decision 2014/145/CFSP under the listing criterion of Article (2)(1)(g), include asset freezes on leading businesspersons who provide a substantial source of revenue to the Russian government. Five prominent businesspersons, listed in the amended Annex I to Regulation 269/2014, challenged the Council’s decision before the General Court, arguing that the restrictive measures were unjustified due to their lack of direct influence over the Russian government.
In the five opinions, Advocate General Medina recommended that the Court of Justice dismiss the appeals on the basis of the interpretation and appropriateness of the listing criterion. On interpretation, AG Medina clarified that "leading businesspersons" refers to individuals with significant influence within their economic sectors, while stressing that the EU Council is not required to prove a direct link or specific conduct connecting them to the Russian government. Regarding appropriateness, the Advocate General concluded that the measures are lawful and justified, noting that the sanctions imposed under the listing criterion aim to address the gravity of Russia’s actions by targeting major revenue streams that support its war efforts.
EU Council Amends Sanctions Regime to Target Individuals and Entities Undermining Democracy and Rule of Law in Guatemala
The EU Council has amended several pieces of sanctions legislation in view of the situation in Guatemala. Council Decision 2024/254 and Council Implementing Regulation (EU) 2024/287 were revised to include three additional individuals and one entity, while entries for five individuals were updated. The restrictive measures now apply to eight individuals and one entity and include asset freezes, travel bans, and a prohibition on making funds available to those listed. These amendments were adopted amid ongoing attacks destabilizing the democratically elected government of President Bernardo Arévalo.
Asia-Pacific Developments
China Plans to Turn Shenzhen into AI and Aviation Hub Amid US Sanctions
In response to escalating US sanctions, China has unveiled a sweeping reform plan to bolster hi-tech industries in Shenzhen, aiming to fortify the city’s resilience as a national tech hub and counter pressures on its major firms like Huawei and DJI. The plan includes measures to boost scalability in sectors like artificial intelligence, aviation, and energy storage by enhancing talent cultivation, expanding financing access, and streamlining technology deployment. Shenzhen, home to major firms like Huawei and Tencent, will strengthen its role as part of the Greater Bay Area by enabling secondary stock listings and fostering cross-border collaborations in trade, aviation, and technology. The reforms also focus on building AI-powered healthcare, modernizing regulations for unmanned aerial vehicles, upgrading trade infrastructure, and promoting the international use of the digital yuan.
Japan Imports Russian Crude on Sanctioned Tanker After Two-Year Halt
Japan has received its first shipment of Russian crude oil in over two years, despite the tanker, Voyager, being sanctioned by both the US and EU as part of efforts to curb Russian energy exports. Taiyo Oil Co., at the request of Japan's Ministry of Economy, Trade, and Industry (METI), facilitated the purchase to maintain operations of a Japan-backed LNG project tied to Sakhalin energy production. While the US and EU sanctions aim to restrict Russian oil exports, Japan continues to receive waivers for Sakhalin crude imports due to national energy security needs, with the EU waiver valid until mid-2026 and the US waiver likely to extend beyond June 2024. Before Russia's invasion of Ukraine, Japan routinely sourced oil from Sakhalin but paused imports following the war, despite maintaining stakes in the project. The global hesitation to use sanctioned Russian tankers is fading, as evidenced by increased Russian crude shipments to countries like India, China, and Syria, often involving creative methods like ship-to-ship transfers. Meanwhile, the EU has accused Sovcomflot, Russia’s state-owned shipping company, of circumventing sanctions by transferring tanker management to UAE-based entities.
Venezuela’s Oil Surge to China Defies US Crackdown
Despite tightened US sanctions that revoked permissions for companies to purchase Venezuelan oil, Venezuela's overall oil exports have remained stable, largely due to increased sales to China. While exports to traditional buyers in the US and Europe have declined, China has emerged as Venezuela's primary customer, importing 584,000 barrels per day in May, up from April. State oil company PDVSA has adapted by redirecting shipments, including heavy crude like Boscan, to Asia, bypassing the need for US permissions. In May, Venezuela exported 779,000 barrels of crude oil and fuel daily, matching the previous month’s levels, and completed significant oil deals before US licenses expired. These adjustments have allowed Venezuela to mitigate the impact of sanctions, which President Nicolas Maduro calls an “economic war,” and continue its oil trade amid political and economic pressures.
