Overview
The Sanctions Update, compiled by attorneys from Steptoe’s award-winning International Trade and Regulatory Compliance team and the Stepwise: Risk Outlook editorial team, publishes every Monday. Guided by the expertise of Steptoe’s industry-leading IRC team, the Sanctions Update compiles and contextualizes weekly developments in international regulatory enforcement and compliance, as well as offers insights on geopolitical context, business impacts, and forthcoming risks.
For more detailed analysis on related issues, see Steptoe’s International Compliance Blog. For information on industry-specific monitoring or bespoke services, please contact the team here.
Lede
Outbound Investment Restrictions Legislation on Track to Become Law
On December 10, the US House of Representatives overwhelmingly passed the FY 2026 National Defense Authorization Act (NDAA), sending the bill to the Senate for a final vote. The NDAA, a must-pass bill, is a massive package of national security-related legislation and the final text includes the Comprehensive Investment National Security Act, or Coins Act, which will impose significant new barriers on US companies investing in countries of concern. This legislation adds a new dimension to the US economic security regime, compelling businesses to refresh their operational due diligence.
The Coins Act is bipartisan legislation that establishes a far-reaching outbound investment screening system requiring US companies and investors to alert the US Treasury Department when they invest in countries of concern in potential dual-use technologies that benefit military modernization efforts, surveillance states and human rights abuses. Citing International Emergency Economic Powers Act (IEEPA) authorities, the President is authorized to prevent countries of concern from exploiting US capital to undermine US national security and foreign policy.
The countries of concern are: the People’s Republic of China, including the Hong Kong and Macau Special Administrative Regions; the Republic of Cuba; the Islamic Republic of Iran; the Democratic People’s Republic of Korea, the Russian Federation; and the Bolivarian Republic of Venezuela under the regime of Nicolas Maduro Moros. This list is expanded from the 2024 draft legislation that focused exclusively on China.
The Act codifies much of existing Treasury Department restrictions on outbound investments, while expanding the list of notifiable technologies beyond semiconductor technology and microelectronics and artificial intelligence systems to quantum information technologies, high-performance computing and supercomputing, and hypersonics systems. The Act authorizes the Treasury Secretary, in consultation with the appropriate congressional committees, to define the technical parameters of the technologies and to add to the categories that enable the military, intelligence, surveillance, or cyber-enabled capabilities of a country of concern.
The legislation pertains to equity and debt investments, including passive or index-based investments, joint ventures, private equity and venture capital funds.
The Act formalizes a framework requiring US investors to notify regulators of transactions involving sensitive technology and for Treasury Department to develop an enforcement program for handling breaches in reporting or reporting evasion activities. The technical specifications for covered transactions are complex, requiring specialized expertise to determine if a specific investment is prohibited or merely notifiable. The Treasury Department established a knowledge standard, obligating the US person to undertake a reasonable and diligent inquiry on the facts of the transaction.
The program differs from the Committee on Foreign Investment in the United States (CFIUS) in that it places the primary responsibility for compliance, including conducting extensive due diligence, solely on US persons (investors, asset managers), not the government or the foreign counterparties.
This legislation is supported by the Select Committee on the CCP, which held hearings, conducted a series of investigations and drafted reports over the past two years on the risks posed by China benefiting from US capital investments. The 2024 version of the Coins Act, which focused exclusively on China, did not make it into the final text of the FY 2025 NDAA. In February, President Trump released a Presidential Memorandum directing a review of existing restrictions for limiting US investment in China’s advance technologies and to consider expanding the scope of restrictions. President Trump is expected to sign the legislation into law as currently written once it reaches his desk, likely before the end of the year.
The Chinese Ministry of Commerce (MOFCOM) has been critical of growing restrictions on two-way investments with China, saying that the US is exploiting the concept of national security, engaging in discriminatory practices, and resorting to non-market measures that severely disrupt normal economic and trade cooperation between businesses of the two countries. The legislation comes at a sensitive time in the US-Chinese trade relationship, with a trade truce in place, brokered by US President Trump and Chinese President Xi during their meeting in South Korea in October. While the agreement as announced publicly did not address restrictions on two-way investments, the trade environment is fragile and the legislation, which includes other measures targeting Chinese activities, such as the BIOSECURE Act (restricting government contracting with biotechnology firms from countries of concern), is likely to add to trade tensions.
US Developments
OFAC Designates Maduro Regime Affiliates and Venezuelan Sanctions Evaders
On December 11, OFAC designated three members of President Nicolas Maduro’s family, a Panamanian businessman, six shipping companies, and multiple vessels. According to OFAC, two of the family members are narco-traffickers operating in Venezuela, and were consequently sanctioned under counternarcotics authorities, namely Executive Order (EO) 14059. The third family member, along with the Panamanian businessman, the six shipping companies, and numerous vessels, are allegedly connected with the illicit shipment of Venezuelan oil, the Government of Venezuela or its affiliate entities, such as Petroleos de Venezuela, SA (PdVSA), or both.
The Trump administration continues to ramp up pressure on the Maduro regime. Just days before OFAC’s designations, President Trump announced that the US had seized an oil tanker off the coast of Venezuela. According to White House Press Secretary Karoline Leavitt, the tanker was a sanctioned “shadow vessel” alleged to be carrying oil in support of the Islamic Revolutionary Guard Corps (IRGC).
OFAC Sanctions Network Connected to Sudan Civil War
On December 9, OFAC sanctioned four individuals and four entities it alleged were part of a network that recruits former Colombian military personnel and trains soldiers, including children, to fight for the Rapid Support Forces (RSF) in Sudan, a paramilitary group the State Department previously determined has perpetrated genocide in the Darfur region of Sudan.
According to OFAC, hundreds of former Colombian military personnel have traveled to Sudan to fight alongside the RSF since September 2024. These individuals, OFAC said, provide the RSF with “tactical and technical expertise,” serving in a variety of capacities and participating in numerous battles, including those which helped the RSF capture El Fasher on October 26. OFAC’s designations target Colombian individuals and entities that allegedly recruit, train, and deploy these fighters.
OFAC and the State Department have indicated that the US remains committed to the principles outlined in the Joint Statement on Restoring Peace and Security in Sudan, which includes, among other aspects, “a three-month humanitarian truce followed by a permanent ceasefire and a transparent transition process leading to an independent, civilian-led government.”
President Trump announced that the US would make a new effort to end the war in Sudan on November 19, following a meeting with Saudi Crown Prince Mohammed bin Salman.
US Reportedly Raises Prospect of Further ICC Sanctions
According to Reuters, the Trump administration has told the International Criminal Court (ICC) that ICC officials and the ICC itself may be targeted with sanctions if it does not amend its founding document to ensure immunity for certain individuals, including President Trump.
President Trump issued EO 14203, “Imposing Sanctions on the International Criminal Court,” earlier this year. The original target of EO 14023, as outlined in the Annex to EO 14203, was Karim Khan, the Prosecutor of the ICC. Since then, the Trump administration has used EO 14203 to impose blocking sanctions on multiple of individuals and entities affiliated with the ICC and its efforts to arrest, detain, or otherwise prosecute US or Israeli nationals. These include sanctions on September 4, August 20, July 9, and June 5,
While the ICC has not yet initiated an investigation into actions taken under the current Trump administration, Reuters reports that there is “open chatter” that it could target President Trump and his top officials after his term ends, particularly for the US military strikes on alleged narco-traffickers in the Caribbean.
OFAC Extends Term of General License Related to Lukoil’s Foreign Business
On December 10, OFAC announced that it was issuing Russia-related General License (GL) 131A, “Authorizing Certain Transactions for the Negotiation of and Entry Into Contingent Contracts for the Sale of Lukoil International GmbH and Related Maintenance Activities.” GL 131A extends the deadline for negotiations to purchase the foreign assets of PJSC Lukoil.
More specifically, GL 131A extends until January 17, 2026 the authorization for certain transactions prohibited by EO 14024 that are ordinarily incident and necessary to the negotiation of and entry into contracts with Lukoil or any of its affiliates for the sale, disposition, or transfer of Lukoil International GmbH (“LIG”) or any entities it owns 50 percent or more.
UK Developments
UK Briefing Highlights Sanctions as Key Tool Against Iranian State Threat Activity
The UK House of Commons Library has published a new briefing outlining the UK’s growing use of sanctions to counter Iranian state-linked activity, including transnational repression, malign intelligence operations, and cyber activity targeting individuals in the UK. The paper summarises concerns extending far beyond Iran’s nuclear programme and regional proxy networks, noting that the Islamic Revolutionary Guard Corps (IRGC) Quds Force plays a central role in operations targeting dissidents, journalists, dual nationals, and perceived opponents overseas. The briefing highlights that UK Government responses have increasingly relied on sanctions to disrupt these activities, consistent with the findings of the Intelligence and Security Committee’s 2025 report on Iran. Sanctions have been used to restrict the financial and operational reach of Iranian state actors and affiliates suspected of involvement in surveillance, intimidation and cyber operations on UK soil. For businesses this underscores the need for enhanced due diligence where exposure to Iranian state-linked entities, proxies or facilitators is possible, particularly given the expanding scope of UK designations targeting Iran’s security apparatus and overseas repression networks.
UK Targets China-based Companies and Russian Entities in Latest Round of Designations Under Cyber and Russia Sanctions Regimes
The UK Government has made two new designations under the Cyber sanctions regime and seven new designations under the Russia sanctions regime. According to a UK Government press release, the designations made under the Cyber sanctions regime comprise China-based companies (i.e., Sichuan Anxun Information Technology Co. Ltd and Integrity Technology Group Incorporated) that have carried out cyberattacks against the UK and its allies. The Russia sanctions designations include Russian organisations responsible for vast malign online networks that specialise in flooding social media with counterfeit documents and deepfake material in English, German, and French, which advances Russia’s strategic aims and contributes to Russian efforts to destabilise Ukraine. The newly added designations are now subject to an asset freeze, and, in the case of individuals, a UK travel ban.
UK Anti-Corruption Strategy Signals Expanded Use of Sanctions Against Professional Enablers
The UK Government’s newly announced Anti-Corruption Strategy 2025 places sanctions at the centre of its plan to disrupt corrupt networks and illicit finance. The strategy explicitly commits to expanding the use of UK sanctions to target “professional enablers” — lawyers, accountants and financial intermediaries who facilitate the movement of illicit funds, including those used to evade sanctions regimes. The National Crime Agency (NCA) will receive strengthened capability and coordination powers to identify and pursue enablers involved in laundering criminal proceeds linked to sanctioned individuals and networks. The UK Government also emphasises the national security threat posed by illicit finance and signals a more assertive sanctions posture both domestically and internationally. This includes plans to host a major illicit finance summit in 2026 to coordinate global enforcement efforts against networks using dirty money to fund organised crime, evade sanctions, and destabilise democratic systems. For affected businesses, the announcement reinforces the growing expectation that they implement robust processes to detect and report sanctions-related financial crime, particularly where clients or counterparties may be linked to corruption or sanctions evasion.
UK Targets Rapid Support Forces Commanders in Latest Round of Designations Under Sudan Sanctions Regime
The UK Government has made four new designations under the Sudan sanctions regime. According to a UK Government press release, the designations comprise four senior Rapid Support Forces commanders suspected of atrocities including mass killings, sexual violence, and deliberate attacks on civilians in El Fasher, Sudan. The designations include the following individuals: (i) Abdul Rahim Hamdan Dagalo, (ii) Gedo Hamdan Ahmed, (iii) Al-Fateh Abdullah Idris; and (iv) Tijani Ibrahim Moussa Mohamed. The newly added designations are now subject to an asset freeze and a UK travel ban.
EU Developments
EU Council Updates Sanctions Listings Targeting Russia’s Shadow Fleet Enablers and Hybrid Threats
On December 15, the EU Council announced new listings regarding two EU sanctions frameworks against Russia. First, the sanctions framework in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine was amended to include an additional five individuals and four entities responsible for supporting Russia’s shadow fleet and its value chain. The newly sanctioned individuals are businessmen linked directly or indirectly to major Russian state-owned oil companies, Rosneft and Lukoil. The designated entities are shipping companies based in the United Arab Emirates, Vietnam and Russia, which own or manage tankers subject to EU restrictive measures or those imposed by third countries due to their role in Russia’s shadow fleet, transporting crude oil or petroleum products using irregular and high‑risk shipping methods.
Second, the EU sanctions framework in response to Russia’s destabilizing actions (Council Decision 2024/2643 and Regulation (EU) 2024/2642) was amended to add twelve individuals and two entities involved in hybrid threats including foreign information manipulation and interference, malicious cyber activities, electronic warfare, and disinformation campaigns targeting the EU, its Member States, and partners. Those listed include foreign policy analysts linked to Russia, as well as the International Russophile Movement and the 142nd Separate Electronic Warfare Battalion, which has disrupted communications and is linked to recent GPS signal failures within several EU Member States. Members of the Russian Military Intelligence Agency and the cyber group Cadet Blizzard were also sanctioned for cyber-attacks against Ukraine, EU Member States and NATO allies.
The EU sanctions regime now applies to a total of 59 individuals and 17 entities. The restrictive measures include asset freezes, travel bans, and prohibitions on making funds or economic resources available.
EU Council Renews Sanctions Regime Targeting the Democratic Republic of Congo
The EU Council renewed restrictive measures in view of the situation in the Democratic Republic of the Congo (DRC) for another year, until December 12, 2026. The sanctions regime was first introduced in 2016 in response to serious human rights violations and obstruction of the electoral process in DRC. Restrictive measures currently target individuals and entities linked to serious human rights violations, electoral obstruction, and actions sustaining the armed conflict and instability in the DRC. At present, the sanctions regime applies to 31 individuals and two entities.
Alongside the renewal, the EU Council amended the entries of eight individuals and deleted the entry of one individual in Annex II to Decision 2010/788/CFSP.
EU General Court Upholds Commission’s Retroactive Derogations from the Blocking Statute
On December 10, the EU General Court delivered a judgment which clarified the European Commission’s powers under the EU Blocking Statute and upheld its ability to grant retroactive derogations from the prohibition in set out in Article 5 of Council Regulation (EC) 2271/96. The applicant challenged the Commission’s decisions granting authorization to a German central securities depository that sought permission to comply with US secondary sanctions against Iran after assets belonging to Middle East Bank’s Munich branch, listed by OFAC, were frozen. The Commission issued two retroactive authorizations in 2023 and 2024, which the General Court found permissible. The Court held that while retroactivity is exceptional in EU law, it is justified when necessary to achieve the measure’s purpose and protect legitimate interests.
Asia Developments
China Urges UK to Drop Cyber Sanctions and End Political Smears
China has sharply criticized the UK for imposing sanctions on two Chinese firms accused of cyberattacks, calling the move politically motivated and demanding its reversal. Foreign Ministry spokesperson Guo Jiakun stressed that China opposes hacking and rejects disinformation driven by political agendas, noting that Beijing has lodged formal protests with London. The Chinese embassy in the UK labeled the sanctions “illegal and unilateral,” alleging collusion with Washington. Guo also addressed speculation about Prime Minister Keir Starmer’s planned visit to China, saying no specific arrangements have been confirmed, while reiterating China’s commitment to strengthening bilateral ties.
Gazprom Ships First LNG Cargo to China After US Sanctions
Russian energy major Gazprom has completed its first liquefied natural gas (LNG) delivery to China from the Portovaya plant since US sanctions were imposed on the facility in January, according to LSEG shipping data. The cargo, transported by the vessel Valera from the Baltic Sea, arrived at China’s Beihai LNG terminal after being loaded on October 28. The Portovaya plant, which began operations in 2022 with an annual capacity of 1.5 million tons, had halted exports in February following sanctions aimed at curbing Russia’s LNG revenues. Current exports are expected to remain limited—about one cargo monthly—due to the terminal’s small scale and lack of dedicated carriers, significantly below Arctic LNG 2’s output.
India Employs Diversified Channels to Sustain Russian Oil Imports US
India is maintaining its Russian crude purchases despite escalating Western sanctions by strategically diversifying its suppliers and logistics. To navigate sanctions targeting major suppliers like Rosneft and Lukoil, India plans to source from partially sanctioned firms such as Surgutneftegaz and Gazprom Neft and to continue using a "shadow fleet" of older tankers with non-Western flags and insurance. New Delhi capitalizes on deeply discounted prices due to the G7 and EU price caps, which recently dropped to approximately $48 per barrel—well below Brent. Despite US pressure, including a 50% tariff on Indian goods and criticism from former officials, India still imported $3.55 billion worth of Russian crude in October and is projected to take in around 600,000 barrels per day this January, though that is below prior highs of up to 1.8 million bpd. State refiners like Indian Oil Corp and Nayara Energy are reportedly utilizing nearly full capacity to process Russian crude, underscoring New Delhi's pragmatic approach to ensure energy security at the expense of political friction with the West.
Indian Defense Firms Explore Joint Ventures with Russia Amid Sanctions Concerns
Sanctions concerns loom large as several senior executives from leading Indian defense companies, including Adani Defence and Bharat Forge, held rare meetings in Moscow this year to explore joint ventures with Russian counterparts—the first such visit since Russia’s 2022 invasion of Ukraine. The talks, which coincided with an official Indian delegation visit in late October, focused on co-producing spare parts for Russian-origin fighter jets, air defense systems, and other equipment, as well as proposals to establish manufacturing units in India for advanced defense technologies. These discussions align with New Delhi’s strategy to shift its long-standing defense ties with Russia toward joint research and production, supporting India’s self-reliance goals. However, industry insiders warn that deepening collaboration with Moscow could jeopardize India’s efforts to secure Western military technology and expose firms to secondary sanctions.
