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, State Continue to Apply Pressure on Iranian Financial Networks
The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the US Department of State continue to apply economic pressure on the Iranian regime, consistent with the terms of President Trump’s “maximum pressure” strategy set forth in National Security Presidential Memorandum 2 (NSPM-2):
- On September 16, OFAC sanctioned a pair of alleged Iranian “financial facilitators” and more than a dozen Hong Kong- and United Arab Emirate (UAE)-based individuals and entities it alleged played a role in coordinating funds transfers, including from the illicit sale of Iranian petroleum, for the benefit of the IRGC-Qods Force (IRGC-QF) and Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL). The IRGC-QF is a Foreign Terrorist Organization (FTO) and Specially Designated Global Terrorists (SDGT), and MODAFL is an SDGT.
- Concurrently, the State Department revoked a sanctions exception issued in 2018 under the Iran Freedom and Counter-Proliferation Act (IFCA) for reconstruction assistance and economic development for Afghanistan. The State Department noted that persons operating the Chabahar Port or engaging in other activities described in the IFCA on or after September 29, 2025, the effective date of the revocation, may expose themselves to sanctions under the IFCA.
- On September 17, the State Department designated four Iran-aligned militia groups as FTOs. These groups—Harakat al-Nujaba, Kata’ib Sayyid al-Shuhada, Harakat Ansar Allah al-Awfiya, and Kata’ib al-Imam Ali—were previously designated as SDGTs.
OFAC Targets Sinaloa Cartel Faction and Its Network
On September 18, OFAC sanctioned Los Mayos, a faction of the Sinaloa Cartel that is allegedly responsible for producing and trafficking fentanyl and other drugs into the US, as well as for kidnapping, extortion, money laundering, and other such crimes. OFAC also sanctioned the alleged leader of Los Mayos’ armed wing, the alleged leader of a separate Sinaloa Cartel-affiliated gang, and five individuals and 15 companies alleged to be connected to one of Los Mayos’ regional networks. These designations followed Treasury Under Secretary for Terrorism and Financial Intelligence John K. Hurley’s visit to the US-Mexico Border and meetings with law enforcement and the US Department of Justice on approaches to dismantle cartels.
Relatedly, two days before OFAC’s designations, the State Department’s Bureau of International Narcotics and Law Enforcement Affairs announced a reward of up to $5 million under the Narcotics Rewards Program (NRP) for information leading to the arrest or conviction of Sinaloa Cartel leader Juan José Ponce Félix, who it alleges is the founder and leader of Los Rusos, the primary armed wing of Los Mayos.
OFAC and the Department of State’s recent actions are in line with President Trump’s January 20, 2025 Directive calling for, among other things, the “total elimination” of cartels and other transnational criminal organizations (TCO).
OFAC Sanctions Sudanese Islamist Actors
OFAC has sanctioned two Sudanese Islamist actors for their alleged involvement in Sudan’s ongoing civil war, as well as their connections to Iran. Specifically, OFAC alleges that Gebreil Ibrahim Mohamed Fediel (“Gebreil”), Sudan’s Finance Minister, and the Al-Baraa Bin Malik Brigade (“BBMB”), a Sudan-based militia, have collaborated with the Iranian regime or IRGC-QF in furtherance of the Sudanese Islamist movement, which, OFAC states, acts as an impediment to Sudan’s progress toward ending its civil war and to a Sudanese democratic transition.
OFAC regularly targeted individuals and entities involved in the Sudanese civil war during the Biden administration. These designations are the first OFAC sanctions targeting individuals in Sudan during the second Trump administration.
UK Developments
UK Sanctions Georgia-linked Supporters of Russia’s War in Ukraine
The UK Government has designated 4 individuals and entities and specified 2 ships under the Russia sanctions regime. According to a UK Government press release, these sanctions target Georgian-linked supporters of Russia’s war in Ukraine. Specifically, politician and businessman, Levan Vasadze, for using his platforms to spread pro-Russian disinformation and businessman, Otar Partskhaladze, for his role as a director of the Moscow Business Brokerage, which operates in the Russian construction and financial services sectors. Two companies, Aeza International Ltd and Helico Group LLC, have also been sanctioned for providing internet services to Russian disinformation campaigns and operating in the Russian transport sector, respectively. Finally, two oil tankers (Bavly and Karakuz) have been sanctioned for transporting Russian oil to the Georgian port of Batumi, as part of the ‘shadow fleet.’ The action follows the downgrading of the UK’s ties with Georgia in 2024 and reflects an effort to target the international network spreading Russian disinformation and its funders.
OFSI Streamlines News Media and Civilian Telecommunications General Licences
OFSI has issued General Licence INT/2025/7159960 (Global News Media Activities), which authorizes people providing news reporting and journalistic services by a recognized UK news publisher or media services, as well as those providing goods or services necessary for the provision of such services, to carry out any activity reasonably necessary to enable the receipt or provision of those services, including making or receiving payments to, from, or via a UK designated person or an entity owned or controlled by such a person. The General Licence applies in respect of all UK autonomous sanctions regulations and is of indefinite duration. OFSI has also amended General Licence INT/2022/1875276 (Continuation of Business and Basic Needs for Telecommunications Services), which applies in relation to certain designations made under the UK’s Russia sanctions regime. The revised General Licence is now tailored specifically to address activities related to the provision of civilian telecommunications services and no longer addresses news media services, which are now addressed as part of the expanded Global News Media Activities General Licence. It has also been issued for an indefinite term.
EU Developments
EU Presents 19th Sanctions Package Against Russia
On September 19, European Commission President Ursula von der Leyen and High Representative Kaja Kallas unveiled the EU’s 19th sanctions package against Russia. The proposal focuses on Russia’s energy, financial sectors, as well as its military industry, with the objective of increasing pressure on Russia to bring it to the negotiation table with Ukraine.
In the energy sector, the new sanctions package seeks to tighten restrictions by introducing a ban on Russian LNG imports by January 2027. Additionally, the package proposes expanding sanctions on Russia’s shadow fleet and its enablers, adding 118 additional vessels. Energy trading companies Rosneft and Gazpromneft will be included in the list of entities subject to a full transaction ban. The 19th sanctions package also includes asset freeze designations for refineries, oil traders, and petrochemical companies in third countries, including China.
The banking and crypto sectors would also face expanded restrictions to curb circumvention. The proposal introduces sanctions targeting crypto platforms and prohibits transactions in cryptocurrencies. Additionally, it imposes a transaction ban on additional banks in Russia and on banks operating in third countries. The proposal also includes the listing of foreign banks connected to Russian alternative payment service systems. Lastly, it restricts transactions with entities in special economic zones.
In the military sector, the proposed restrictive measures aim to cut off Russia's access to key technologies including AI and geospatial data. The package proposes new direct export restrictions for items and technologies used on the battlefield. It also includes the listing of 45 companies in Russia and third countries that will be subject to export restrictions.
European Commission Proposes Sanctions Against Hamas, Extremist Ministers of the Israeli Government and Violent Settlers Alongside the Suspension of Trade Concessions with Israel
The European Commission formally submitted a proposal to the EU Council to impose sanctions on Hamas, extremist ministers within the Israeli government, and violent settlers in the West Bank to address serious human rights violations in Gaza and the West Bank. The proposed package of restrictive measures includes 4 draft legal acts and 19 listing proposals. Nine of the listings target extremist ministers of the Israeli government and violent settlers under the EU Global Human Rights Sanctions Regime. Ten additional listings target senior members of the Hamas politburo under a newly defined criterion in the Hamas Sanctions Regime.
This initiative was accompanied by a parallel proposal to suspend certain trade-related provisions of the EU-Israel Association Agreement, also known as the Euro-Mediterranean Agreement. The suspension of trade-related provisions is grounded in the European Commission’s recent assessment that Israel is in breach of Article 2 of the Association Agreement, which establishes respect for human rights and democratic principles as a foundational element of the partnership.
In a review presented to the Foreign Affairs Council on June 23, the High Representative of the EU concluded that the Israeli government’s actions in Gaza and the West Bank, including the blockade of humanitarian aid and ongoing bombardments constitute a serious material breach of the Association Agreement and justify its unilateral suspension by the European Union.
The EU Council will need to agree on each proposal. Although several Member State ambassadors, including those from Spain and Belgium, endorsed moving forward with the proposals, others have withheld support. The positions of Germany and Italy are expected to be decisive for ensuring the adoption of the respective proposals as the process moves forward.
EU Council Extends Sanctions Regime Targeting Individuals and Entities Responsible for Threatening the Territorial Integrity of Ukraine
The EU Council has extended the sanctions regime established under Decision 2014/145/ CFSP for an additional six months, until March 15, 2026. Following a review of the individual designations listed in the Annex to Decision 2014/145/CFSP, the EU Council determined that the information concerning 142 individuals and 134 entities should be updated. Furthermore, the entries for one deceased individual and one other individual have been removed from the Annex. Regulation 269/2014 was also amended to reflect these changes. The restrictive measures that will continue to apply include travel bans for listed individuals, asset freezes, and a prohibition on making funds or other economic resources.
Asia-Pacific Developments
Sanctions Deepen Discounts as China’s Iranian Oil Imports Face Quotas and Oversupply
Sanctions have contributed to a slowdown in Chinese purchases of Iranian oil, as record-high crude inventories in Shandong and a lack of import quotas for independent refiners have limited their ability to buy, prompting Iranian suppliers to offer steeper discounts to maintain export levels. These independent refiners, often referred to as "teapots," are facing reduced margins, prompting Iranian suppliers to offer deeper discounts—now over $6 per barrel below Brent benchmarks—to maintain sales. US sanctions have further complicated the situation, notably targeting the Haiye Dongjiakou terminal in Qingdao, which previously handled significant volumes of Iranian crude. Following the sanctions, operations at the terminal were halted, and traders began rerouting shipments to nearby facilities. Despite these challenges, China remains Iran’s dominant oil customer, importing over 90% of its exports and often disguising the origin of the oil as Malaysian to bypass restrictions.
Chinese Defense Universities Deepen Research Ties with Russia Amid Western Sanctions
In order to mitigate the impact of Western sanctions, Chinese universities affiliated with the country’s defense sector have significantly expanded their research collaborations with Russian institutions since 2019, deepening ties in areas with potential military applications, according to a recent study by the Australian Strategic Policy Institute (ASPI). The ASPI study revealed that these partnerships, involving all 68 universities linked to China’s defense system, are providing Russia with access to advanced technologies. In return, China benefits from Russian expertise in fields like aircraft engine development, where Russia remains strong. Notable collaborations include joint programs between Beihang University and the Moscow Aviation Institute, and between Xi’an Technological University and Peter the Great St. Petersburg Polytechnic University, both focusing on strategic technologies such as drones and aerodynamics. The Harbin Institute of Technology has also intensified its cooperation with Russian counterparts, hosting joint education centers and signing new agreements with major Russian research bodies.
