Overview
Lede
Brazil’s Rejection of Magnitsky Sanctions Intensifies Spat with US over Bolsonaro, Tariffs, and BRICs
Last week, Brazil’s Supreme Court ruled that foreign “judicial decisions, laws, decrees, and executive orders” are unenforceable in Brazil unless with domestic “approval or in compliance with international judicial cooperation mechanisms.” The order—which mentioned by name recent UK court rulings against the Brazilian Mining Association over the Mariana and Brumadinho dam disasters—was a veiled response to the Trump administration’s July imposition of sanctions under the Magnitsky Act on Supreme Court Justice Alexandre de Moraes, who is presiding over the politically-charged trial of former Brazilian president, and Trump ally, Jair Bolsonaro.
While the legal impact of Brazil’s ruling remains to be seen, the diplomatic and economic consequences are already unfolding. Brazilian markets and financial institutions stumbled in the aftermath of the ruling, which they fear could endanger access to US markets or provoke further action from Washington. Shares in major Brazilian stocks slid between two and eight percent in the immediate aftermath of the Brazilian decision, while investors voiced fears of broader impacts for financial firms. Despite concerns, however, some of the largest Brazilian banks are reportedly concluding that US sanctions against de Moraes apply only to his dollar-based accounts, and will have limited impact on the Brazilian financial system.
The sanctions—and Brazil’s defiant response—highlight the growing, highly politicized schism between Washington and Brasília. Over the summer, geopolitical tensions in the bilateral relationship have surged over trade issues and, most divisively, the ongoing trial of former President Jair Bolsonaro over his alleged 2022 coup attempt. President Trump—who has long enjoyed warm relations with Bolsonaro, a fellow right populist—has repeatedly condemned the proceedings. On July 9, the president imposed a blanket 50% tariff on Brazilian exports, citing Brazil’s “witch hunt” against Bolsonaro; on July 15, US Trade Representative Jamieson Greer announced investigations into Brazil’s trade practices under Section 301 of the Trade Act, targeted at digital trade and tariffs; and on July 18, the State Department revoked the visas of most Brazilian Supreme Court Justices and other officials involved in Bolsonaro’s persecution. On July 30, the US imposed sanctions on Supreme Court Justice Alexandre de Moraes pursuant to Global Magnitsky Human Rights Accountability Act—which builds upon the Global Magnitsky Human Rights Accountability Act—for de Moraes’ involvement with “oppressive campaign of censorship, arbitrary detentions that violate human rights, and politicized prosecutions.”
Brazil’s leftist President Luiz Inácio Lula da Silva (“Lula”) has not taken the US’ recent steps sitting down. Lula has called the moves “unacceptable blackmail” and an affront to the country’s sovereignty. He has threatened taxes on American technology companies, while Brazil’s right-wing Congress is mulling retaliatory tariffs. Meanwhile, the Brazilian Supreme Court has stepped up enforcement against Bolsonaro—briefly imposing house arrest with an ankle monitor, and freezing the assets of his son, Eduardo, a Congressman in Brazil who took leave to move to Texas and lobby on his father’s behalf, amid an investigation into the legality of his efforts. Analysts argue that US tariffs, rather than hurting Lula via the economy, provide him a “get out of jail free” card for any upcoming turbulence. The Trump administration’s efforts to punish Brasília have rallied the country around Lula’s government—another example of an “anti-Trump bump” for incumbent left-wing politicians pushing back against American trade policies (see also: Canada and Australia).
Despite appearances, the mounting US-Brazil feud is not just about Bolsonaro. President Trump is, in part, ramping up pressure on Brazil to secure a more favorable bilateral relationship amid post-“Liberation Day” tariff back-and-forth (a gambit that is ongoing in multiple other relationships). More broadly, the White House also likely seeks to make an example out of Brazil and the broader BRICS bloc, of which Brazil is a founding member. BRICS is perceived by Washington as attempting to establish an alternative economic and diplomatic system , out of reach of Western sanctions and pressure tactics. Just days before the US announced its decision to impose 50% tariffs on Brazil, Brazil hosted a summit for the informal group, which last year expanded to add Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia, and the UAE. The US’ goal to make clear the costs of strengthening BRICS as an alternative to the US-led international order may backfire, as heightened confrontation with the US is leading Brazil to deepen its economic and diplomatic ties with alternate partners.
US Developments
Trump Meets with Zelensky and European Leaders Following Summit with Putin
On August 18, President Trump met with Ukrainian President Volodymyr Zelensky and multiple European leaders, including the heads of state from the United Kingdom, France, Germany, Italy, and Finland, as well as NATO Secretary General Mark Rutte and European Commission President Ursula von der Leyen, to discuss the terms of a peace deal in Ukraine. The meeting followed President Trump’s one-day summit with Russian President Vladimir Putin in Alaska, which we have previously written on. The meeting with Zelensky and the other EU leaders did not result in any clear decisions with respect to additional sanctions targeting Russia, which President Trump had previously threatened but seemingly put on hold following his meeting with President Putin.
Against the backdrop of these talks, some US lawmakers have continued to criticize the Trump administration for not increasing pressure on the Kremlin through more stringent sanctions and export controls. Senator Elizabeth Warren (D-MA), the Ranking Member of the Senate Banking Committee, released a statement asserting that President Trump “has failed to recognize” that the US has “cards to play” in peace negotiations. Senator Jeanne Shaheen (D-NH), the Ranking Member of the Senate Foreign Relations Committee, similarly warned the Trump administration that, if it “can’t hold Putin’s feet to the fire, Congress will act” by passing the Sanctioning Russia Act of 2025, a sweeping sanctions- and tariff-related bill that enjoys strong bipartisan support, but has been placed on hold by Republican leadership as Trump pursues further negotiations with Russia.
Trump Signs Bipartisan Export Control Transparency Law
On August 19, President Trump signed the bipartisan “Maintaining American Superiority by Improving Export Control Transparency Act.” The Act requires the Secretary of Commerce to annually submit a report to Congress on end-use checks undertaken by the Bureau of Industry and Security (BIS) and license applications or other requests for authorization submitted to BIS for the export, re-export, release, and in-country transfer of items that are subject to the Export Administration Regulations to an entity that is on the Entity List or the Military End-User List and located in an arms embargoed country, including China.
For license applications or requests for authorization, the report must include (i) the name of each applicant or requestor; (ii) a brief description of the related item, including the Export Control Classification Number (ECCN) and the reason for control; (iii) the name of the end-user; (iv) the end-user’s location; (v) a value estimate of the sale; and (vi) the decision with respect to the application or request. For end-use checks, the report must include the date, location, and result of the end-use check. The report must also include aggregated statistics on all license applications and other requests for authorization. Other than the aggregated statistics, the contents of the report are exempt from public disclosure.
The Act was introduced by Sen. Jim Banks (R-IN) and Sen. Mark Warner (D-VA), who expressed concern that BIS “lack[ed] transparency” in its licensing decisions and “rarely enforce[d] export controls on sensitive technology sales to China.” The Act garnered strong bipartisan support and passed the House through a voice vote and the Senate through unanimous consent.
OFAC Increases Pressure on Iranian Oil Networks
On August 21, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced that it was sanctioning individuals and entities across multiple jurisdictions for their alleged involvement in Iranian oil exports, including via an illicit network purportedly run by Antonios Margaritis. Concurrently, the State Department announced that it was imposing sanctions on two China-based crude oil and petroleum products terminal and storage operators for their alleged role in trading Iranian oil. This is the fourth round of sanctions targeting China-based terminal operators.
The US continues to apply pressure on Iran in accordance with President Trump’s National Security Presidential Memorandum 2 (NSPM-2). These sanctions, in particular, follow a recent trend of sanctioning individuals and entities allegedly connected with Iranian oil networks. They also come as Iran claims the moment for “effective” nuclear talks with the US has not arrived, and as the United Kingdom, France, and Germany (the “E3”) consider triggering the “snapback” mechanism to reinstate United Nations (UN) sanctions on Iran over its nuclear program.
Treasury Sanctions Costa Rican Narcotraffickers
OFAC has designated four Costa Rican nationals and two Costa Rica-based entities for their alleged involvement in narcotics trafficking and money laundering. John Hurley, the recently confirmed Under Secretary for Terrorism and Financial Intelligence, stated that Treasury will “continue to use all available tools to disrupt narcotrafficking organizations that threaten the safety of Americans,” including coordination with partners in third countries.
OFAC’s designation of Costa Rican individuals and entities was done in collaboration with the Drug Enforcement Administration’s (DEA) San José Country Office, Dallas Field Office, and Costa Rica’s Office of the Attorney General. It was the first public collaboration with Costa Rican authorities since the November 15, 2023 designation of Costa Rican narcotics trafficker Gilbert Hernan de Los Angeles Bell Fernandez.
State Department Sanctions ICC Judges and Prosecutors
The Department of State designated two International Criminal Court (ICC) judges—Kimberly Prost and Nicolas Yann Guillou—and two ICC prosecutors—Nazhat Shameem Khan and Mame Mandiaye Niang—for allegedly “directly engag[ing]” in efforts to investigate, arrest, detain, or prosecute US or Israeli nationals without the consent of either nation.
Specifically, the Department of State sanctioned Prost for ruling to authorize the ICC’s investigation into US personnel in Afghanistan; Guillou for ruling to authorize the ICC’s issuance of arrest warrants for Israeli Prime Minister Bejamin Netanyahu and former Minister of Defense Yoav Gallant; and Shameem Khan and Niang for “continuing to support” ICC actions against Israel, including upholding the ICC’s aforementioned arrest warrants since they assumed leadership for the ICC’s Office of the Prosecutor (OTP).
These designations follow similar sanctions imposed on ICC personnel on June 5, as well as on the United Nations Human Rights Council “Special Rapporteur on the Situation of Human Rights in the Palestinian Territories Occupied since 1967,” on July 9.
EU Developments
EU’s Strategy for Russian Energy in the 19th Sanctions Package
As the European Union is preparing to unveil its 19th sanctions package against Russia next month, EU officials have signaled that options for significant new measures targeting the oil sector are limited.
Building on its REPowerEU roadmap, which aims to phase out Russian gas and oil imports by 2027, the EU has already taken major steps to reduce reliance on Russian energy. The recently adopted 18th sanctions package included a ban on imports of refined petroleum products derived from Russian crude oil and a complete transaction ban on Nord Stream 1 and 2 pipelines. These measures raise questions about what additional steps the EU can take to exert further pressure on Russia.
Specialist reports indicate that the upcoming 19th sanctions package will prioritize strengthening existing measures rather than introducing new wide-ranging restrictions. Several EU officials have indicated that one likely action could involve expanding the blacklist of Russian shadow fleet vessels involved in sanctions circumvention.
Asia Developments
Japan Strengthens Support for Ukraine Through Sanctions and Security Commitments
On August 19, 2025, Japanese Prime Minister Shigeru Ishiba reportedly signaled Japan’s increased commitment to Ukraine’s security by announcing plans to “thoroughly discuss what our nation can and should do.” Central to Japan’s efforts has been the implementation of robust sanctions measures against Russia. Since the Russian invasion in 2022, Japan has imposed several measures, including freezing Russian sovereign assets, sanctioning private entities that finance Russia’s military activities, and taking steps to reduce reliance on Russian energy imports.
SeaLead Denies Iranian Links Amid Sanctions Crackdown
On August 22, 2025, Singapore-based container shipping group SeaLead reportedly denied any connections to the Iranian regime after being drawn into a sweeping US sanctions package that targets a network allegedly linked to sanctions busting and financial flows into Iran. Following the US Treasury’s decision to impose sanctions on 16 vessels chartered by SeaLead last month, the company has begun terminating its charter agreements and unloading affected ships at suitable ports. While SeaLead itself has not been sanctioned, the ships targeted were reportedly connected to a network overseen by Mohammad Hossein Shamkhani, the son of Ali Shamkhani, a prominent Iranian political adviser. SeaLead emphasized its stringent compliance measures, citing “regular [know your customer checks], sanctions screening, and due diligence on vessel owners prior to entering into any charter arragenments.” The group disavowed any ongoing ties with its ex-founder Jaideep Saigal, who has been linked to Draco Buren, a technical management firm alleged to have ties to the Hossein network. Additionally, SeaLead stated that it had never engaged in transporting goods for the Iranian government and maintained no direct or indirect connections to entities associated with Iran.
Russian LNG Tankers Depart Arctic Facility Following Sanctions and Compliance Concerns
Recently, several liquefied natural gas (LNG) tankers reportedly departed from Russia’s Arctic LNG 2 facility, which is sanctioned by the US. The vessels Iris and Voskhod began moving toward North Asia on August 15 after weeks of inactivity, joined by two additional tankers last week, according to Bloomberg. US sanctions are creating significant hurdles for Russia’s ability to secure buyers, while the facility reportedly relies on a fleet of ice-capable vessels—some with deliberately obscured ownership through frequent management shifts—to circumvent restrictions. This situation serves as a reminder of the complexities and risks surrounding global sanctions compliance. Gaps in enforcement can lead to both legal liabilities and financial repercussions.
