Overview
The Sanctions Update, compiled by attorneys from Steptoe’s award-winning International Regulatory Compliance team and the Stepwise: Risk Outlook editorial team, publishes every Monday. Guided by the knowledge of Steptoe’s industry-leading International Trade and Regulatory Compliance 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.
Subscribe to the Stepwise Risk Outlook here. To receive only the Sanctions Update edition (published most Mondays), select “Stepwise Risk Outlook: Sanctions Update.” 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.
The Lede
EU Poised to Crack Down on Russian Crypto Transactions
The EU is planning a broad crackdown on all cryptocurrency transactions involving Russia, an effort to comprehensively block one of Moscow’s few avenues for evading international financial sanctions as well as to avoid playing whack-a-mole with individual Russian crypto platforms. The crypto ban would prohibit any EU individual or entity from transferring cryptocurrencies to or from a Russia-based counterparty, regardless of the sanctions status of the individuals, platforms, or currencies involved. Though more comprehensive than the current strategy, enforcement would likely be imperfect; the EU has already banned crypto transactions, and the measure would simply prohibit transactions with any crypto-asset service provider established in Russia, meaning counterparties could still use intermediaries, third-country brokers, and shell entities to evade sanctions.
The measure is set to be proposed as part of the EU’s upcoming 20th sanctions package, which was initially intended to be approved by the fourth anniversary of Russia’s invasion of Ukraine, but is likely to be delayed beyond February 24 due to ongoing negotiations over a potential maritime services ban on Russian crude. Greece and Malta, whose flagged ships transfer most Russian seaborne crude under the price cap, have requested more information. Hungary is again threatening a veto unless some Russian oligarchs are removed from the sanctions list.
The crypto ban is a shift in tactics for the EU, which until now has, alongside the US, focused on discrete Russian crypto platforms and currencies. In February of last year, the EU sanctioned Garantex, a Russian cryptocurrency exchange platform focused on ruble-based trading, which quickly grew into one of the largest crypto exchanges in Russia and a key enabler of Western sanctions evasion. In early March, the US, Germany and Finland coordinated to disrupt and takedown the online infrastructure operating the platform, seizing its primary domain and freezing over $26 million in cryptocurrency. However, Garantex quickly pivoted, transferring operations to Grinex, a successor platform that had reportedly been prepped for months. The blanket ban is also an attempt to curb the use of A7A5, a ruble-linked stablecoin launched in Kyrgyzstan in January 2025 that facilitated much of the transfer of assets between Garantex and Grinex (most of the $26 million asset freeze was enabled by the use of Tether, an El Salvador-based dollar-pegged stablecoin issuer subject to some US oversight; A7A5 is subject to no such regulation or oversight). The A7A5 crypto token is based on the A7 system, a Russian-made crypto payment network that serves as a digital parallel to SWIFT, likely developed by Russia’s sanctioned Promsvyazbank.
While the US, UK, and EU ultimately sanctioned Grinex and companies associated with A7A5 in August and October of 2025, the exchange’s continued operations underscore the resilience and adaptability of cryptocurrency as a sanctions evasion strategy. Grinex and the A7A5 stablecoin continue to play an immense role in sanctions evasion not only by Russia, but also by other heavily sanctioned entities. Blockchain intelligence firm TRM Labs estimated that Garantex (alongside Iranian exchange Nobitex) accounted for more than 85% of crypto inflows to sanctioned entities and jurisdictions in 2024, the year before it was taken offline. A7A5’s circulating supply increased by approximately $90 billion year-over-year, per its Kyrgyz parent company, surpassing the growth of Tether and USDC, the two largest US dollar-pegged stablecoins.
Cryptocurrency has played an increasingly significant role in Russia’s efforts to evade Western financial sanctions. The difficult-to-trace currency has allowed Moscow to adapt to its exclusion from major financial networks, like SWIFT, and trade in sanctioned goods (in March 2025, for example, bitcoin, ether and stablecoins were reported to be a “small but growing” part of Russia’s oil trade with India and China). In March of last year, following the takedown of Garantex, Western authorities estimated Russia’s shadow crypto trade at roughly $10 billion. Today, the wallet cluster linked to the A7 network is estimated to be linked to at least $39 billion in assets. Russia’s crypto market in total sees annual activity of over $130 billion, meaning that the true scale of the illicit market could be much larger. In addition to enabling crypto trading, Moscow also mines crypto. The Kremlin legalized crypto mining in 2024, and by the end of that year, independent estimates cited the existence of at least 136,000 mining farms using roughly 1.5% of Russia’s electricity—an industrial-scale sector.
In addition to the crypto ban, the forthcoming sanctions package is set to target Kyrgyzstan’s increasingly important role as a hub for Russian sanctions evasion. The proposed package includes a ban on the export of certain dual-use goods to the country, alleging that companies there have sold prohibited goods like machine tools and electronic components used in drones to Russia. The ban would be the first use of the EU’s anti-circumvention tool, which was initially introduced as part of the 11th sanctions package. Kyrgyzstan also plays a leading role in Russia’s shadow cryptocurrency market; Grinex is registered in Kyrgyzstan, as is Meer, a key facilitator of A7A5 trades, and Old Vector LLC, the official issuer of A7A5. Kyrgyzstan rapidly emerged as an Eastern crypto hub in 2022, and the friendly regulatory environment has made the country an attractive hub for high-risk exchanges and the registration of shell companies that enable Russia’s illicit crypto trade. With EU sanctions envoy David O’Sullivan set to travel to Kyrgyzstan later this month to discuss the bloc’s circumvention concerns, the country is firmly in the EU’s sights as it seeks to improve its efforts to curb Russian sanctions evasion.
US Developments
OFAC Continues to Expand Venezuela Authorizations
OFAC has continued to issue new and amended general licenses (GLs) as part of the Trump administration’s efforts to increase access to, and production in, Venezuela’s oil industry.
On February 10, OFAC issued GL 48, “Authorizing the Supply of Certain Items and Services to Venezuela.” GL 48 authorizes certain transactions prohibited by the Venezuelan Sanctions Regulations (“VSR”), including those involving the Government of Venezuela (“GoV”), Petróleos de Venezuela, S.A. (“PdVSA”), or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest (the “PdVSA Entities”), that are ordinarily incident and necessary to the provision from the United States or by a US person of goods, technology, software, or services for the exploration, development, or production of oil or gas in Venezuela. The transactions authorized by GL 48 include transactions for the processing of payments, the arranging of shipping and logistics services, the arranging of port and terminal services, and the maintenance of oil or gas operations in Venezuela.
As with other recent Venezuela GLs, GL 48 imposes a reporting requirement on persons engaged in certain activities pursuant to the license. In addition, GL 48 has certain exclusions, including the formation of new joint ventures or other entities in Venezuela to explore or produce oil or gas.
In the same announcement, OFAC issued the following amended GLs.
- OFAC amended GL 30B, “Authorizing Certain Transactions Necessary to Port and Airport Operations” by removing language that excluded transactions or activities related to the exportation or reexportation of diluents, directly or indirectly, to Venezuela from authorization under the GL.
- OFAC amended GL 46A, “Authorizing Certain Activities Involving Venezuelan-Origin Oil” by excluding payments for local taxes, permits, or fees from the scope of monetary payments to a blocked person that must be made into the Foreign Government Deposit Funds.
On February 13, OFAC issued GL 49, “Authorizing Negotiations of and Entry Into Contingent Contracts for Certain Investment in Venezuela.” GL 49 significantly expands the scope of permitted activity by authorizing certain transactions prohibited by the VSR, including those involving the GoV, PdVSA, or PdVSA Entities, that relate to the negotiation of and entry into “contingent contracts” for new investment in oil or gas sector operations in Venezuela, provided that the performance of any such contract is made expressly contingent upon separate authorization from OFAC. OFAC defines “contingent contracts” to include, among other things, executory contracts, executory pro forma invoices, agreements in principle, and bids or proposals in response to public tenders. The scope of the authorization includes negotiating and entering into contingent contracts to engage in new oil or gas exploration, development, or production activities in Venezuela, to expand existing operations in Venezuela, and to form new joint ventures or other entities in Venezuela related to the foregoing activities.
On February 13, OFAC issued GL 50, “Authorizing Transactions Related to Oil or Gas Sector Operations in Venezuela of Certain Entities.” GL 50 authorizes certain transactions prohibited by the VSR, including those involving the GoV, PdVSA, or PdVSA Entities, that are related to oil or gas sector operations in Venezuela of BP PLC, Chevron Corporation, Eni S.p.A., Repsol S.A., and Shell PLC.
For further discussion on GL 46, see our Sanctions Update from February 2.
For further discussion on GLs 47 and 5U, see our Sanctions Update from February 9.
OFAC Enters into Settlement Agreement with IMG Academy
On February 12, OFAC announced a $1,720,000 settlement agreement with IMG Academy, LLC (“IMG”), a school and athletic training facility headquartered in Florida, for its potential civil liability for 89 apparent violations of OFAC’s counternarcotics sanctions.
According to OFAC, over five years, IMG repeatedly transacted with two individuals whom OFAC previously sanctioned for their ties to a Mexican-based drug trafficking organization. The transactions in question involved the enrollment and attendance of the aforementioned sanctioned individuals’ two student-athlete children at IMG.
OFAC determined that IMG’s apparent violations were non-egregious and not voluntarily self-disclosed, and that IMG had substantially cooperated with OFAC during the investigation and implemented remedial measures. OFAC said the case highlights the “pervasiveness of sanctions risk across a wide variety of sectors and institutions,” including academic institutions with international ties
OFAC Sanctions Hizballah Network
On February 10, OFAC sanctioned a gold exchange company and members of an alleged procurement and shipping scheme allegedly used to support Hizballah. In the press release announcing the sanctions, Secretary of the Treasury Scott Bessent said that Treasury “will work to cut off [Hizballah] from the global financial system,” and that doing so would give Lebanon, from which many of the newly sanctioned individuals and entities operated, a chance to be “peaceful and prosperous again.”
OFAC and FinCEN Introduce New VSD, Whistleblower Mechanisms
OFAC and the Financial Crimes Enforcement Network (FinCEN) have introduced two new platforms that the Treasury Department hopes will facilitate more frequent and streamlined submissions of voluntary self-disclosures (VSD) and whistleblower tips.
On February 6, OFAC launched a new online VSD Portal. According to OFAC, the VSD Portal provides a “streamlined, secure method for submitting voluntary self-disclosures of potential violations of OFAC-administered sanctions programs.” OFAC is encouraging parties to begin submitting VSD reports through the portal.
On February 13, FinCEN launched a new webpage to accept whistleblower tips on fraud, money laundering, and sanctions violations. FinCEN intends to offer monetary rewards for certain information about potential violations or conspiracies to commit violations of the Bank Secrecy Act (BSA), International Emergency Economic Powers Act (IEEPA), Trading With the Enemy Act (TWEA), or the Foreign Narcotics Kingpin Designation Act (Kingpin Act).
UK Developments
OFSI Updates Financial Sanctions Enforcement and Monetary Penalties Guidance
OFSI has published updated guidance on financial sanctions enforcement and monetary penalties, which implements a number of enhancements to its enforcement processes following a recently concluded consultation. The revised framework, which takes effect immediately, is intended to make OFSI’s enforcement approach clearer, more consistent, and more robust. As a matter of policy, OFSI will assess breaches in line with the guidance in force at the point it makes its first formal decision on whether to pursue enforcement action. The guidance introduces several substantive changes, including a new Early Account Scheme and Settlement Scheme, each offering potential civil monetary penalty discounts of up to 20 percent. OFSI has also replaced its previous assessment framework with a four-level seriousness model, introduced a single voluntary disclosure and co-operation discount of up to 30 percent, and added a new policy on claims of exceptional financial hardship. In addition, fixed monetary penalties have been introduced for certain information, reporting and licensing offences. OFSI has confirmed it will host a webinar in March 2026 to explain the changes and their implications for businesses.
OFSI Extends Lukoil Bulgaria General Licence and Updates Related FAQ
OFSI has amended and extended General Licence INT/2025/7895596, which permits the continuation of certain business activities involving Lukoil Bulgaria entities and their subsidiaries (the “GL”). The GL, originally issued in November 2025 under the Russia (Sanctions) (EU Exit) Regulations 2019, has had its expiry date extended from February 14, 2026, to August 13, 2026. The GL permits specified persons to continue business operations with the Lukoil Bulgaria entities and their subsidiaries (i.e., Lukoil Bulgaria EOOD; Lukoil Neftochim Burgas AD; Lukoil Aviation Bulgaria EOOD; and Lukoil Bunker Bulgaria EOOD which are subsidiaries of PJSC Lukoil), including making and receiving payments under existing or new contracts, transacting with third parties in connection with those arrangements, and providing or receiving economic resources involving the relevant Lukoil Bulgaria companies. Additionally, OFSI has also amended FAQ 173 to reflect the updated GL position. Businesses intending to rely on the GL should review the amended text carefully to ensure they comply with all conditions and reporting requirements.
UK Publishes User Guide for UK Sanctions List Search Tool
OFSI has released a new user guide explaining how to use the new UK Sanctions List search tool. The guide is intended to help businesses and compliance teams understand how the tool functions and how to interpret search results when screening individuals, entities or vessels. The guidance walks users through key search features, including exact and partial name matching, fuzzy search functionality, and the ability to search for precise words or phrases. It also explains how search results are highlighted and ranked, how multi-select filters can be used to refine results, as well as how search URLs can be generated and reused. The guide is designed to support more consistent and accurate sanctions screening as firms transition fully to the UK Sanctions List as the single source of UK designations.
EU Developments
EU Advances Discussions on the 20th Sanctions Package Against Russia
On February 16, EU ambassadors of the EU Council met in Brussels to discuss the 20th sanctions package against Russia. According to press reports, EU Sanctions Envoy David O’Sullivan briefed Member States on ongoing efforts to address circumvention of EU restrictive measures. Kyrgyzstan has been singled out following a sharp rise in imports of metalworking machinery and radio equipment from the EU, many of which are reportedly re-exported to Russia. In response, the EU is reportedly considering the first use of its anti-circumvention tool under Article 12f of Council Regulation (EU) 833/2014, which could restrict exports of these dual‑use items to Kyrgyzstan. O’Sullivan recently met with Kyrgyz Ambassador Aidit Erkin and plans to visit Bishkek on February 26.
On the proposed full maritime services ban for Russian crude oil, High Representative of the EU Kaja Kallas has reportedly been working to coordinate with the UK in order to maximize the sanctions’ impact. Meanwhile, Greece and Malta have signaled concerns that the ban could affect Europe’s shipping industry and energy prices.
EU ambassadors are expected to continue discussions on the sanctions package in the coming days, with the aim of finalizing it ahead of February 24, which will mark the fourth anniversary of Russia’s full-scale invasion of Ukraine.
Advocate General Opinion on Meaning of “Operator” in Broadcast Prohibition Targeting Russia
Advocate General Norkus (the Lithuanian AG) of the European Court of Justice has published a non-binding opinion in Case C‑67/25, following a request for a preliminary ruling from a German Regional Court in the context of criminal proceedings concerning alleged breaches of the broadcast prohibition under Article 2f of Council Regulation (EU) 833/2014.
The opinion addresses the interpretation of Article 2f(1), which prohibits operators from broadcasting, enabling, facilitating or otherwise contributing to the broadcast of content from entities listed in Annex XV. Advocate General Norkus takes the view that “operator” should be interpreted to include any natural or legal person exercising control over the broadcasting process, regardless of whether the activity is commercial in nature or financed through voluntary contributions. Accordingly, the opinion concludes that a broad interpretation of the term is necessary to ensure the effectiveness of the prohibition and to prevent circumvention of the EU’s restrictive measures targeting Russian state-controlled media.
EU Council Reviews Zimbabwe Sanctions Regime
The EU Council has recently decided to extend Zimbabwe’s arms embargo under Council Decision 2011/101/CFSP for one year, until February 20, 2027. In addition, all provisions related to the possibility of imposing travel bans and asset freezes have been lifted. This decision follows the EU Council’s annual review of the restrictive measures in view of the situation in Zimbabwe.
Asia-Pacific Developments
Singapore Emerges as a Sanctions‑Era Shadow Route for Russian Oil
On February 9, 2026, traders and LSEG shipping data reported that Russian oil tankers are increasingly listing Singapore as their official destination, reflecting Moscow’s growing difficulty in securing buyers amid tightening Western sanctions and India’s expected pullback from Russian crude imports. Although Singapore does not import Russian oil due to sanction risks, nearby waters frequently serve as hubs for ship‑to‑ship transfers, allowing vessels to reroute cargoes toward Malaysia or floating storage while obscuring the identity of final buyers. With Chinese state oil firms also wary of spot purchases for fear of sanctions exposure, Russia’s export options have narrowed, prompting more tankers to list ambiguous destinations to avoid scrutiny. Traders note that what once appeared as routine listings for Port Said or the Suez Canal has shifted dramatically toward placeholder destinations, underscoring how sanctions enforcement has pushed Russia into increasingly opaque maritime workarounds.
Seoul Reconsiders Long‑Standing Sanctions Amid Renewed Humanitarian Openings
On February 10, 2026, South Korea reportedly signaled a potential policy shift as Unification Minister Chung Dong‑young told lawmakers that Seoul is reviewing the unilateral sanctions imposed in 2010, which halted nearly all trade with North Korea. He noted that lifting the May 24 Measures could carry “significant symbolic meaning.” Chung welcomed the UN Security Council committee’s recent approval of sanctions exemptions for humanitarian aid to Pyongyang—a move linked to Washington’s renewed willingness to grant waivers under the 1718 sanctions regime. He argued that easing restrictions could help revive dialogue, particularly as South Korean business groups push for the removal of sanctions that have remained in place despite being deemed obsolete by the previous administration. However, experts cautioned that lifting the measures may have little practical effect given North Korea’s current refusal to engage, and they cast doubt on proposals for inter‑Korean energy cooperation, calling them largely hypothetical under ongoing international sanctions.
China Reported as a Key Sanctions Loophole in Russia’s Auto Supply
On February 12, 2026, media reports indicated that new data and interviews reveal a thriving gray‑market pipeline enabling tens of thousands of foreign‑brand cars to reach Russia despite wide‑ranging automotive sanctions imposed after its 2022 invasion of Ukraine. Chinese intermediaries have become the primary conduit, allowing Russian dealers to obtain restricted European, Japanese, and South Korean vehicles by reclassifying zero‑mileage new cars as “used,” thereby bypassing automaker approvals and sanctions rules. Autostat registration data shows that many of these vehicles—ranging from Toyotas and Mazdas to German luxury SUVs—are either manufactured in China or routed through the country before being exported to Russia. Automakers insist they no longer ship to Russia, but experts note that informal networks and parallel channels make it “almost impossible” to fully prevent sanctioned vehicles from entering the market. Despite sharply reduced official sales, Russia continues to register large numbers of foreign‑brand cars, with nearly half of 2025 sanctioned‑region vehicle sales traced to China‑manufactured units.
