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.
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The Lede
Senate’s Russian Sanctions Bill Back in Play
Last week, US Senator Lindsey Graham (R-SC) announced that President Trump has “greenlit” the bipartisan Russian sanctions bill that, among other measures, will allow President Trump to impose sanctions on countries doing business with Russia, including buyers of Russian oil and gas, petroleum products and petrochemical products. Graham expects that a vote on the bill could come as early as this week.
Sanctioning Russia Act of 2025 (S.1241) and the House companion bill (H.R.2548) are wide-ranging bills that impose penalties on certain individuals and entities if the President determines that the Russian government or a person acting at Russia's direction is involved with (1) refusing to negotiate a peace agreement with Ukraine; (2) violating a negotiated peace agreement; (3) initiating another invasion of Ukraine; or (4) overthrowing, dismantling, or seeking to subvert the Ukrainian government.
The original version of the bill requires that the President impose certain penalties if he determines that any of the above actions transpire. Reportedly, President Trump has requested that the language of the bill be modified to give him more flexibility. Senator Graham has not made public what those changes are. The original bill requires:
- Visa- and property-blocking sanctions on specified persons such as the Russian president, certain Russian military commanders, and any foreign person that knowingly provides defense items to the Russian armed forces;
- Increasing the rate of duty on all goods and services imported from Russia into the US to at least 500% relative to the value of such goods and services;
- Increasing the rate of duty on all goods and services imported into the US from countries that knowingly engage in the exchange of Russian-origin uranium and petroleum products to at least 500% relative to the value of such goods and services;
- Department of the Treasury imposing property-blocking sanctions on any financial institution organized under Russian law and owned wholly or partly by Russia, and any financial institution that engages in transactions with those entities; and
- Department of Commerce prohibiting the export, reexport, or in-country transfer to or in Russia of any US-produced energy or energy product.
After months of stalled progress on the bill as the White House sought to open dialogue with Russia, the political context has shift in recent weeks, bringing this legislation back into play. President Trump and his key envoys have presented and revised a 20-point peace plan in shuttle diplomacy with Moscow, Ukraine and European backers. Ukraine, seeking to maintain President Trump’s support, has worked diligently with US envoys to revise the original plan that was developed with significant Russian input. According to press leaks, the original plan proposed Ukraine cede Donbas and Crimea to Russia (both territory currently occupied by Russia and territory in the Donbas still under Ukrainian control); imposed numerical limits on Ukraine’s standing forces; and required abandonment of Ukraine’s NATO membership aspirations.
Ukraine, with European support, has convinced the US to modify the plan to include stronger security guarantees and revised limits on military size with a focus on strengthening its defense capabilities with higher personnel caps. While diplomatic gaps still remain over territory concessions, other solutions have been proposed to maintain Ukraine’s sovereignty over the land, while turning the land currently occupied by Russia into a demilitarized free economic zone.
Last week, European and American leaders reached an understanding on security guarantees for Ukraine that would include US-led ceasefire monitoring support for the Ukrainian army and the deployment of a multinational reassurance force in Ukraine as part of a peace settlement, with additional commitments (not yet outlined) to support Ukraine should there be a future Russian attack. The security guarantee understandings are just that, not a binding commitment. However, European leaders are pressing forward to finalize a legally binding agreement.
Meanwhile, Russia continues to stall on making any commitment to a ceasefire, let alone a peace agreement. Moscow is pressing forward on the battlefield, in a punishing campaign against Ukrainian civilian targets and energy infrastructure. Last week, Russia launched a hypersonic intermediate-range ballistic missile, hitting Ukraine’s western Lviv region, near a military base in neighboring Poland, a NATO member, that serves as a key hub for ferrying Western military supplies to Kyiv. Some Russian commentators characterize the attack as a warning to European leaders against proposals to deploy their troops to Ukraine as part of a prospective peace deal.
Trump is playing geopolitical hardball right now, imposing US priorities across the globe and putting in place coercive tools to push Russian President Putin to agree to his peace plan. This is made evident by the US commandeering ghost fleet oil tankers transporting sanctioned Venezuelan oil – even one operating under a Russian flag. The US also deposed Venezuelan President Maduro in a larger effort to impose US supremacy on the country, in complete disregard of long-time Russian support for the socialist government there. Alongside heightened sanctions power ensconced in the Sanction Russia Act, the US is focused on building its coercive and diplomatic arsenal to accelerate a negotiated end to the war in Ukraine.
US Developments
US to Begin “Rolling Back” Select Sanctions on Venezuela
On Saturday, Treasury Secretary Scott Bessent told Reuters that certain US sanctions on Venezuela could be lifted as soon as this week to facilitate oil sales. Secretary Bessent said that Treasury is “de-sanctioning the oil that is going to be sold,” but did not specify which additional sanctions could be lifted. In addition, oil traders Vitol and Trafigura have reportedly secured “preliminary special licenses” to negotiate and export Venezuelan crude oil. These reports follow a Department of Energy announcement that the US is “selectively rolling back sanctions” on Venezuela to enable the transport and sale of its crude and certain derivative products.
While the specific measures have not been confirmed, the announcements mark a notable shift in US sanctions policy. The Department of Energy’s announcement indicates that that sanctions relief may extend beyond crude oil and related products to the export of “select oil field equipment, parts, and services,” including technology, expertise, and investment from American and “other international energy partners” to support Venezuela’s oil sector. Although the Trump administration is moving quickly to clear legal barriers to Venezuela’s oil market, there is reportedly hesitation from some oil majors to invest in Venezuela. During a meeting with oil industry executives on Friday, the Trump administration’s pitch to invest in Venezuela was reportedly met with concern about security, stability, and other risks.
Meanwhile, Congress has continued to question the Trump administration’s ultimate plans for Venezuela after former President Nicolás Maduro and his wife were captured and removed to the US for trial on drug- and weapons-related charges. Recently, five Senate Republicans joined Senate Democrats in advancing a measure that could restrict President Trump’s military powers in Venezuela. Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, Sen. Elizabeth Warren (D-MA), also called on the Chairman of the Committee, Sen. Tim Scott (R-SC), to hold oversight hearings on the national security and economic policy implications of the Trump administration’s actions, including the status and impact of existing sanctions.
Trump Gives Approval for Russia Sanctions Bill
On January 7, 2026, Sen. Lindsey Graham (R-SC), a co-sponsor of sweeping legislation that would impose sanctions and tariffs on Russia, the Sanctioning Russia Act of 2025, stated that President Trump has “greenlit” the legislation, potentially setting up a vote on the measure as early as this week.
As we reported previously, the Sanctioning Russia Act received a renewed push in Congress in late November following President Trump’s indication that he would support the legislation, provided he retains ultimate decision-making flexibility with respect to the sanctions and tariffs contained therein. While the push seemed to slow as the Trump administration continued its negotiations with Russia, the security landscape, as well as oil market conditions, have since shifted.
Sen. Graham stated that the Sanctioning Russia Act will allow President Trump to “punish” countries who buy Russian oil, primarily through secondary sanctions and tariffs. It will also provide President Trump with the “leverage” against countries such as China, India, and Brazil, to “incentivize them to stop buying cheap Russian oil.” Administration officials may view such measures serving the dual purpose of pressuring Russia, which recently struck Western Ukraine with a nuclear-capable missile, to concede on some of its hardline stances in peace negotiations, while also altering the market demand in favor of Venezuelan oil that President Trump anticipates selling.
If the Sanctioning Russia Act is put to a vote, it will likely pass. The bill enjoys significant bipartisan support, and lawmakers have been waiting for the opportunity to send a strong message to the Kremlin. It will be important to monitor any changes in the legislation, particularly those that provide President Trump with the decision-making flexibility that he requested, as Congress progresses toward a potential vote.
UK Developments
UK Government Publishes Report on Legality of Sanctions and Potential Seizure of Russian Assets
The UK Government’s House of Commons Library has published a research report that examines the international law context surrounding unilateral sanctions and the ongoing discussion of proposals to seize Russian assets to provide financial support to Ukraine. According to the report, while sanctions can be a lawful exercise of state sovereignty, their legality outside the UN Security Council framework remains contested and highly fact-specific. The report outlines how sanctions may engage obligations under non-intervention principles, sovereign immunity, WTO law, investment protections and customary international law, while noting the absence of a single, settled international legal framework governing sanctions. Additionally, the report places particular emphasis on the doctrine of countermeasures under customary international law, which some states and institutions have cited to justify more intrusive measures, including asset seizure. It notes unresolved questions, including whether states not directly injured by a breach may lawfully take countermeasures in the general interest, an issue brought into focus by Russia’s invasion of Ukraine. While bodies such as the Council of Europe have publicly supported asset seizure as a countermeasure, the briefing also records expert concerns that stretching these doctrines too far could undermine the coherence and legitimacy of international law. The report underlines the complex issues and attendant risks associated with the proposed seizure of Russian assets.
Asia-Pacific Developments
China Rejects US Sanctions Push, Defends Trade with Russia Amid Criticism
China has strongly cautioned against any efforts to undermine its economic and trade ties with Russia following reports that Trump endorsed a bipartisan sanctions bill targeting Moscow. Mao Ning, spokesperson for China’s Ministry of Foreign Affairs (MFA), reaffirmed Beijing’s opposition to unilateral sanctions and stressed that its trade with Russia is legal, mutually beneficial, and should remain free from external interference. The proposed US legislation, championed by Senator Lindsey Graham, seeks to penalize countries purchasing discounted Russian oil, aiming to pressure nations like China, India, and Brazil amid the ongoing Russia-Ukraine conflict.
China Sanctions Two Taiwan Officials for Independence Push, Adds Prosecutor as Accomplice
China announced sanctions against two senior officials from Taiwan’s Democratic Progressive Party, labeling them as “diehard Taiwan independence” separatists for promoting pro-independence agendas. Liu Shyh-fang, head of Taiwan’s interior affairs department, and Cheng Ying-yao, who oversees education, were accused of obstructing cross-Strait exchanges and fostering separatist sentiment, including introducing pro-independence textbooks. Both officials, along with their families, are now barred from entering mainland China, Hong Kong, and Macao, and their affiliated organizations are prohibited from cooperating with mainland entities. Additionally, Taiwan prosecutor Chen Shu-yi was designated as an accomplice for allegedly fabricating charges and persecuting individuals supporting cross-Strait ties, actions described as creating a “green terror.” Mainland authorities have so far listed 14 individuals as separatists and 12 as accomplices, stressing that these measures aim to safeguard national sovereignty and protect the interests of Taiwan compatriots, not target the general population.
North Korea Rejects Multilateral Sanctions Monitoring Effort
North Korea has strongly criticized the Multilateral Sanctions Monitoring Team, which includes 11 nations such as the US and South Korea, accusing it of being an “illegal” entity outside the United Nations framework. According to KCNA, Pyongyang’s mission to the UN condemned the group’s activities as lacking legitimacy and claimed the US intends to hold a briefing on the matter at UN headquarters. The team was established after Russia blocked the renewal of a UN expert panel in 2024, which had overseen sanctions compliance for years, while China abstained from that vote. North Korea also dismissed recent allegations linking its entities to cyberattacks as fabricated, following an October 2025 report by the monitoring team highlighting such connections.
