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
Sanctions on Iran Continue as the Conflict with Iran Escalates
On June 20, US Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced that it was sanctioning individuals, entities, and vessels across multiple jurisdictions for their alleged involvement in Iran’s defense industry or with Ansarallah (commonly referred to as the “Houthis”), a Specially Designated Global Terrorist (SDGT) and Foreign Terrorist Organization (FTO) with ties to the Iranian regime:
- In one action, OFAC designated one individual and eight entities for their alleged involvement in the procurement and transshipment of sensitive machinery for Iran’s defense industry. All individuals, entities, and vessels were designated pursuant to Executive Order (E.O.) 13382, which targets proliferators of weapons of mass destruction and their means of delivery.
- In a separate action, OFAC designated four individuals and 12 entities alleged to have imported oil and other illicit goods in support of the Houthis. All individuals and entities were designated pursuant to E.O. 13224, as amended, which aims to, inter alia, disrupt the financial support network for terrorists and terrorist organizations. According to OFAC, this is the single largest action taken against the Houthis to date.
The US has maintained robust sanctions against Iran under the second Trump administration, in accordance with President Trump’s “maximum pressure” strategy as set forth in National Security Presidential Memorandum 2 (NSPM-2). These most recent sanctions actions occurred before several US military strikes against Iranian nuclear facilities over the weekend. President Trump has signaled that these strikes should push Iran to make peace with Israel, while at the same time signaling that future attacks could be forthcoming should peace not be achieved.
OFAC Sanctions CJNG Leaders
OFAC has sanctioned five Mexico-based leaders of the Cartel Jalisco Nueva Generacion (CJNG), a Specially Designated National (SDN), SDGT, and FTO. According to OFAC, one of the sanctioned leaders, Ricardo Ruiz Velasco, is the prime suspect in the killing of Valeria Márquez, a Mexican TikTok influencer.
At the same time as OFAC’s press release, the Department of State’s Bureau of International Narcotics and Law Enforcement Affairs, through its Narcotics Rewards Program, announced that it was offering a reward of up to $15 million for information leading to the arrest or conviction of the founder and current leader of CJNG, Ruben Oseguera Cervantes. The Bureau also announced that it was offering a reward of up to $5 million for information leading to the arrest or conviction of a CJNG commander, Audias Flores Silva, who was accused by OFAC of controlling laboratories used to produce methamphetamine and other illicit drugs trafficked into the United States. Both men were designated by OFAC pursuant to E.O. 14059 and E.O. 13224.
Trump Indicates Opposition to New Sanctions on Russia
During his remarks to the press at the G7 Summit, President Trump suggested that he will not issue more sanctions against Russia despite the European Union (EU) and United Kingdom’s (UK) push for more coordinated action with the US.
Most of President Trump’s hesitation during his remarks appears to stem from the cost of sanctions to the US. Specifically, President Trump stated that, “[w]hen I sanction a country, that costs the US a lot of money – a tremendous amount of money . . .” and that just imposing more sanctions is “[is] not that easy.” President Trump suggested to reporters that he would wait to see whether the EU and UK issue new sanctions first. We expect the Trump administration is also considering the prospect of peace negotiations with the Kremlin and Kyiv, which President Trump said would be “screwed up” if more sanctions were imposed.
Senators Introduce Bill to Repeal Statute underlying Syria Sanctions
Senator Jeanne Shaheen (D-NH), the Ranking Member of the Senate Foreign Relations Committee, alongside Senator Rand Paul (R-KY) recently introduced a bill (S. 2133) to repeal the Caesar Syria Civilian Protection Act of 2019 (the “Caesar Act”). The bill was referred to the Senate Foreign Relations Committee on June 18, 2025. Companion legislation was introduced in the House (H.R. 3941) by Representative Joe Wilson (R-SC) on June 12, 2025, and subsequently referred to the House Committees on Foreign Affairs, the Judiciary, and Financial Services.
The Caesar Act, in part, sanctions the Syrian government and those who facilitate its acquisition of certain goods, services, or technologies that support military activities or Syria’s aviation, oil, or gas production industries. When OFAC announced that it was issuing Syria General License (GL) 25 on May 23, 2025, which authorized certain transactions otherwise prohibited by the Syria Sanctions Regulations, the Department of State concurrently announced that it was issuing a 180-day waiver of mandatory Caesar Act sanctions. The shift in policy, as well as the proposed legislation from Senators Shaheen and Paul and Representative Wilson, reflect the changing attitudes of Trump administration officials and Members of Congress to Syria’s new interim government under President Ahmed al-Sharaa.
DOJ Declines to Prosecute Company Following VSD of Sanctions Violations
The Department of Justice’s (DOJ) National Security Division (NSD) and the US Attorney’s Office of the Southern District of Texas announced that DOJ has declined to prosecute White Deer Management LLC (“White Deer”) and its affiliates after the firm voluntarily self-disclosed criminal violations of US sanctions and export controls committed by a company it had acquired, Unicat Catalyst Technologies LLC (“Unicat”).
According to Assistant Attorney General for National Security John A. Eisenberg, the DOJ’s decision to “decline prosecution of the acquiror and extend a non-prosecution agreement to the acquired entity in this case reflects the [NSD’s] strong commitment to rewarding responsible corporate leadership.” OFAC had previously entered into a settlement agreement with Unicat for a civil penalty of $3,882,797. OFAC asserted that Unicat committed 13 apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR) as well as one apparent violation of the Venezuela Sanctions Regulations (VSR) for allegedly providing catalyst products and consulting services to Iran and selling catalysts to a blocked entity in Venezuela.
For more on the NSD’s recent trend toward corporate declinations, read this blog post by Steptoe partners Andrew Adams and Brian Fleming.
UK Developments
UK Imposes New Sanctions on Russia’s Energy, Financial, and Military Sectors
On 17 June 2025, the UK Government imposed new sanctions on Russia following further Russian attacks on Kyiv, which were intended to increase economic pressure on Russia and impact its ability to fund its war in Ukraine. In particular, 10 new designations were made under the Russia sanctions regime, which targeted: (i) UK-based individuals involved in providing electronics on the UK’s Common High Priority List items to Russia through various shell companies; (ii) GUGI (i.e., the Main Directorate of Deep-Sea Research of the Russian Ministry of Defence), which is the military agency leading the development of Russia’s underwater intelligence gathering operations, to protect the UK from attacks on subsea infrastructure; (iii) enablers of Russia’s illicit oil trade through the crewing and managing of “shadow fleet” vessels; and (iv) businesses operating in the Russian energy, extractives, and financial services sectors. The new sanctions also crack down further on Russia’s shadow fleet, specifying 20 additional oil tankers. In announcing the new sanctions, Foreign Secretary Lammy also stated that the UK intends to work with its international partners to tighten the oil price cap to further constrain Russian revenue generation capable of use to fund the war.
OFSI Publishes Sanctions Threat Assessment for Art Market Participants and the High Value Goods Sector
On 18 June 2025, OFSI published its threat assessment for art market participants and the high value goods sector, following the recent introduction of mandatory financial sanctions reporting obligations on the sector. The threat assessment identifies the risk of designated persons facing financial pressures due to UK financial sanctions, attempting to sell high value goods or transfer them beyond the reach of UK asset freeze regulations, identifying a series of red flags and case studies that those active in the sector should be alert to. Russian designated persons and their enablers efforts to deal with high value goods in the UK in breach of asset freeze prohibitions are identified as a particular area of risk. Additionally, persons designated under several other UK sanctions regimes also were identified as posing a particularly elevated risk; namely, the Libya, North Korea, Counter Terrorism (Domestic), Global Anti-Corruption, and Global Human Rights sanctions regimes.
EU Developments
European Commission Unveils REPowerEU Proposal to Phase out Russian Gas and Oil Imports
On June 17, the European Commission presented its REPowerEU proposal to gradually phase out the import of Russian gas and oil into the EU by the end of 2027. This marks the first step in the implementation of the REPowerEU roadmap, as previously reported in our May 12 Sanctions Update.
Under the legislative proposal, new contracts for importing Russian gas will be prohibited starting January 1, 2026. Imports under existing short-term contracts will cease by June 17, 2026, except in cases of pipeline gas delivered to landlocked countries with ongoing long-term contract obligations, which will be permitted until the end of 2027. Additionally, all imports under long-term contracts will come to an end by December 31, 2027. The proposal also bans long-term contracts for liquefied natural gas (LNG) terminal services involving Russian customers or entities controlled by Russian undertakings. Lastly, to ensure a gradual and coordinated phase-out of Russian fossil fuels from the EU market, Member States will be required to develop and implement diversification plans.
The REPowerEU initiative aims to address the remaining dependencies on Russian energy imports while contributing to the broader objectives of the Clean Industrial Deal and the Action Plan for Affordable Energy. The roadmap has reportedly faced pushback from Hungary and Slovakia, which have voiced opposition to sanctions targeting Russian gas.
EU Council Renews Sanctions Against Russia Over Crimea Annexation
The EU Council has renewed the restrictive measures against Russia over its illegal annexation of Crimea and the city of Sevastopol until June 23, 2026. First introduced in June 2014, the sanctions include a ban on the import of goods from Crimea or Sevastopol into the EU, as well as prohibitions on infrastructural or financial investment in these regions and the provision of tourism services. The measures also restrict the export of certain goods and technologies to Crimean companies or for use in sectors such as transport, telecommunications, and energy, along with activities related to the prospection and production of oil, gas, and mineral resources. With this decision, the EU reaffirms its refusal to recognize Russia’s illegal annexation of Crimea and Sevastopol, condemning it as a violation of international law.
EU Commission Updates FAQs on Sanctions Against Russia For Targeted Vessels
The European Commission recently published updated FAQs to provide greater clarity on the rules surrounding vessels targeted under Annex XLII of Council Regulation 833/2014, particularly those carrying dangerous or polluting goods, such as oil. The update outlines exceptional circumstances under which such vessels may be granted temporary access to EU ports to offload dangerous or polluting cargo, despite restrictions, when it is necessary to prevent or mitigate substantial risks to human health, safety, or the environment.
Asia-Pacific Developments
Taiwan and Malaysia Navigate Rising US-China Tensions Over AI Chip Restrictions
On June 16, 2025, Taiwan’s Ministry of Economic Affairs (MOEA) reportedly confirmed the addition of Huawei Technologies and Semiconductor Manufacturing International Corp (SMIC) to its Strategic High-Tech Commodities (SHTC) Export Control Entity list. Both companies, already sanctioned by the US, are key players in China’s efforts to develop AI chips as alternatives to Nvidia’s advanced semiconductors. In response, China’s Ministry of Foreign Affairs (MOFA) criticized Taiwan’s government, stating, “The DPP authorities’ kneeling and ingratiating themselves with the US will only hurt and ruin Taiwan’s interests.”
Just days later, on June 19, 2025, similar tensions surfaced in Malaysia, where reports emerged that Malaysia is investigating claims that Chinese engineers used Nvidia-powered data centers to bypass US export controls and train AI models. This development could strain Malaysia’s trade talks with the US, as the country faces pressure to tighten oversight of semiconductor activities. Despite Malaysia’s digital minister promoting recent tech collaborations with China, the trade ministry emphasized that companies must comply with export restrictions to avoid secondary sanctions, reflecting a careful balancing act in navigating global chip policies.
China Reviews Sanctions on UK Parliamentarians
China is reportedly reviewing its 2021 sanctions on nine UK citizens, including five Members of Parliament and two peers, in a potential move toward easing tensions with the UK. The sanctions were imposed in retaliation for the UK sanctioning Chinese officials over human rights abuses against Uyghurs in Xinjiang. This development follows a series of high-level meetings in London between Chinese officials and UK government figures, focused on trade and diplomatic ties.
China’s reconsideration comes amid broader efforts to improve international relations, as it recently lifted sanctions on EU officials while seeking better ties with Brussels. UK officials, however, maintain there is no plan to remove their own sanctions on Chinese officials. While a UK-China trade deal remains unlikely, there are plans for further diplomatic engagement, with UK officials potentially visiting Beijing later this year.
