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
Trump Administration Weighs Sanctions in Negotiations with Russia
Uncertainty over the direction of Russia sanctions increased last week with indications from the White House that it was simultaneously considering options to ease and increase sanctions on Russia.
Reuters reported that the White House requested the Departments of State and the Treasury to draft a list of sanctions that could be eased, including those on Russian oligarchs. Secretary of the Treasury Scott Bessent previously suggested the US could roll back sanctions on Russia depending on the trajectory of negotiations over the war in Ukraine. It is unclear precisely what measures are under consideration, but the reporting suggests the administration is engaged in a serious effort to review existing measures and identify those that could potentially be removed.
However, in a Friday morning post on Truth Social, President Trump stated that he was “strongly considering large scale Banking Sanctions, Sanctions, and Tariffs” on Russia until a ceasefire and peace agreement are reached. Bessent made a similar statement a day earlier during a speech at the Economic Club of New York, where he asserted the US would “not hesitate to go all in” on sanctions if needed to generate leverage in peace negotiations.
The situation remains highly fluid and much will likely depend on what leaders in Ukraine and Russia do going forward.
Multiple US Agencies Take Action Against Chinese Hackers
Three US agencies—the Departments of the Treasury, Justice, and State—announced a series of actions targeting alleged Chinese hackers.
- The Department of the Treasury designated a Shanghai-based malicious cyber actor and data broker, Zhou Shuai, and his company for allegedly acquiring, brokering, and selling data from sensitive US critical infrastructure networks.
- The Department of Justice (DOJ) unsealed indictments charging Zhou Shuai and his counterpart, Yin Kecheng, as well as ten other China-based individuals allegedly connected with large-scale, multi-year computer intrusion and data theft operations.
- The Department of State announced two reward offers under the Transnational Organized Crime Rewards Program (TOCRP) of up to $2 million each for information leading to the arrest or conviction of Yin Kecheng and Zhou Shuai.
The Trump administration is likely to be aggressive in pursuing actions targeting Chinese persons engaged in hacking and other harmful cyber activity. There is also strong bipartisan support for such measures in Congress.
State and Treasury Target the Houthis
The Departments of State and the Treasury imposed sanctions on Ansar Allah, more commonly referred to as the Houthis.
In particular, the Department of State formally re-designated the Houthis as a Foreign Terrorist Organization (FTO). The Houthis were originally designated as an FTO and Specially Designated Global Terrorist (SDGT) in January 2021 under the first Trump administration, but were subsequently removed from those lists in February 2021 as the Biden administration sought to reorient US foreign policy in Yemen. An FTO designation prohibits US persons or those subject to US jurisdiction from knowingly providing “material support or resources” to FTOs and also requires US financial institutions to block any funds in their possession in which an FTO has an interest.
Shortly after the Department of State’s announcement, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated seven Houthi members for allegedly smuggling military-grade items and weapons systems into Houthi-controlled areas of Yemen. OFAC also designated one Houthi-affiliated operative and his company, which allegedly recruited Yemeni civilians to fight on behalf of Russia in Ukraine and generated revenue to support other Houthi operations.
OFAC Sanctions Head of Darknet Marketplace
OFAC designated the Iran-based sole administrator of Nemesis, which OFAC described as an online “darknet marketplace” used by narcotics traffickers and cybercriminals to trade in illegal drugs. According to the press release, this is OFAC’s first action as a member of the FBI-led interagency Joint Criminal Opioid and Darknet Enforcement (JCODE) Team. Combating trade in illegal drugs, particularly fentanyl, is a top priority of the Trump administration and likely to be a priority for OFAC going forward. OFAC also identified 49 virtual currency addresses as blocked property due to their connection with the Nemesis administrator.
Department of State Adopts New Visa Restriction Policy
Secretary of State Marco Rubio announced the US is adopting a new visa restriction policy aimed at those responsible for knowingly facilitating illegal immigration to the US.
Rubio noted the visa restriction policy applies mostly to foreign government officials, including immigration and customs officials and airport and port authority officials, but that it could also include other individuals. Moreover, he noted that failure to enforce immigration laws or establish and implement policies and practices that knowingly facilitate the transit of migrants intending to illegally immigrate into the US, specifically via the southern border, would trigger visa restrictions.
Lawmakers Reintroduce Falun Gong Protection Act
Sen. Ted Cruz (R-TX), alongside Sens. Ron Johnson (R-WI), Rick Scott (R-FL), and Thom Tillis (R-NC) reintroduced the Falun Gong Protection Act in the Senate. Rep. Scott Perry (R-PA) introduced companion legislation in the House.
This iteration of the Falun Gong Protection Act requires the President to impose property-blocking sanctions and visa restrictions on foreign persons who have knowingly and directly engaged in or facilitated the involuntary harvesting of organs within China. It also requires the Secretary of State to submit to the appropriate congressional committees a report on the organ transplant policies and practices of China, including those against the Falun Gong.
The bill was introduced in prior sessions of Congress but, while gaining some traction, was not enacted.
Senate Foreign Relations Committee Leaders Introduce Chinese Fentanyl Legislation
Sens. Jim Risch (R-ID) and Jeanne Shaheen (D-NH), the Chair and Ranking Member of the Senate Foreign Relations Committee, respectively, introduced the Break Up Suspicious Transactions of Fentanyl Act (or the BUST FENTANYL Act).
As explained by Risch and Shaheen, the bill would:
- Expand sanctions authorities to allow the U.S. to target Chinese government owned or controlled entities, including financial institutions, being used to finance foreign opioid trafficking.
- Broaden the list of methamphetamine precursor chemicals tracked in the annual International Narcotics Control Strategy Report (INCSR).
- Encourage the Trump Administration to:
- identify individuals and entities from China involved in the production and trafficking of fentanyl and its precursor chemicals
- target Chinese financial institutions that enable money laundering
- report on the establishment of U.S. Drug Enforcement Agency offices in China
Combatting the flow of fentanyl is a top priority for the Trump administration, but it remains to be seen whether that will translate into congressional action.
UK Developments
UK Relaxes Syria Sanctions
Having recently telegraphed its intention to relax aspects of its Syria sanctions package, on March 6, 2025, the UK delisted 24 previously sanctioned entities, including the Central Bank of Syria and a swathe of state-owned entities operating in the petroleum, banking, textile, tobacco, and transportation sectors. The decision to lift the freeze on the assets of these entities has been undertaken, according to a Foreign, Commonwealth and Development Office spokesperson, to help the people of Syria rebuild their country and economy and reflects an intention on the part of the UK government to judge Syria’s interim authorities “on their actions, not their words.” UK sanctions on members of the Assad regime, as well as those involved in the illicit trade in captagon, remain in effect.
EU Developments
EU Council Prolongs Sanctions for Misappropriation of Ukrainian State Funds
The Council Decision 2014/119/CFSP, which imposes restrictive measures on individuals responsible for the misappropriation of Ukrainian state funds and for human rights violations in Ukraine, has been extended until March 6, 2026. This decision, originally enacted in 2014, continues to target three remaining individuals—two former government officials and a businessman.
Switzerland Expands Sanctions Against Russia Following EU's 16th Sanctions Package
Switzerland has expanded its sanctions against Russia by adopting additional measures from the EU’s 16th sanctions package. Effective March 4, the Federal Department of Economic Affairs, Education and Research (EAER) has sanctioned 48 individuals and 35 entities, including supporters of the Russian military complex, with asset freezes and entry bans. Additionally, 74 vessels from third countries, mainly tankers circumventing oil price caps or transporting military goods for Russia, are now subject to service bans. Stricter export controls have been imposed on 53 new entities, and three banks using Russia's SPFS system have been added to the transaction ban. Furthermore, from 17 March, 13 Russian financial institutions will be subject to a ban on providing specialized financial messaging services (SWIFT). The EAER is also considering further measures from the EU's sanctions package.
European Countries Consider Seizing €200bn in Frozen Russian Assets
European countries, including France and Germany, are now reportedly considering the seizure of over €200bn in frozen Russian assets as part of ongoing efforts to negotiate a ceasefire in Ukraine. This significant shift follows discussions among EU nations and the UK about utilizing these assets, which were initially frozen by G7 allies in response to Russia's invasion of Ukraine in 2022. Most of these assets, held in Belgium’s central security depository Euroclear, are currently generating income used to repay G7 loans to Ukraine, but the underlying assets remain untouched. The use of the underlying assets has been much debated among world leaders and international law scholars, as it raises complex legal questions.
It was revealed that French officials have proposed that these assets could be seized if Russia violates a future ceasefire, providing security guarantees for Kyiv. This proposal has received positive feedback but remains under discussion. UK Prime Minister Sir Keir Starmer and Germany’s chancellor-in-waiting Friedrich Merz have expressed interest in exploring how these assets might be utilized to ensure compliance with any future peace agreements and to support Ukraine's post-conflict recovery.
