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 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.
The Lede
Among a flurry of executive actions on his first day in office, President Trump issued an omnibus executive order (EO) rescinding several sanctions-related EOs and executive actions – among them Biden’s last-minute policy changes toward Cuba. On January 14, outgoing President Biden issued an executive order removing an additional layer of restrictive trade measures that had been put in place in the second half of the Trump Administration. Biden moved to end Cuba’s designation as a State Sponsor of Terrorism (SST) (which would have taken effect in 45 days), issue a six-month waiver for Title III of the Helms-Burton Act, and rescind the 2017 National Security Presidential Memorandum 5 on Cuba policy to eliminate the Cuba Restricted List.
Concurrently, Cuba announced that it would begin releasing “a substantial number of political prisoners,” a decision that it reached as part of ongoing negotiations through the good offices of the Catholic Church – an alternative negotiating channel due to the lack of formal communication channels between Washington and Havana. Days after the announcement, Cuba had reportedly released more than 550 political prisoners, including many that had been detained in the landmark 2021 anti-governmental demonstrations in which more than 1,000 people are estimated to have been arrested. In addition to resulting in the release of political prisoners, the move was applauded by some as a step toward easing humanitarian conditions in Cuba and slowing out-migration.
Less than a week later and hours into his presidency, President Trump walked back President Biden’s removal of Cuba as an SST and the rescission of the 2017 Presidential Memorandum on Cuba. The move was expected given President Trump’s past policy statements and his cabinet: his Secretary of State Marco Rubio, confirmed just hours after his inauguration, is the son of Cuban immigrants himself and among Congress’ most vocal critics of the Cuban government. While Rubio has not responded directly to Biden’s delisting, in his confirmation hearing last week, he affirmed his belief that Cuba should be on the SST list. In his first term, President Trump ended the Obama-era “Cuban thaw” by relisting Havana as an SST following several years of ramped-up sanctions.
The practical implications of these developments with respect to the ability of US persons to do business in Cuba is quite limited. In particular, the removal or inclusion of Cuba on the SST List does not change the fact that Cuba is subject to a comprehensive embargo that broadly prohibits most business and commercial activity involving Cuba. Additionally, although President Trump has yet to lift President Biden’s Helms-Burton Act waiver, he is expected to do so, or alternatively, to let the Helms-Burton Act waiver expire on June 14, 2025. The deal was formally negotiated by the Catholic Church, and Pope Francis has continued to laud the agreement as “a gesture of great hope.” Some prisoners may face re-arrest, or further, unannounced releases may simply be cancelled. If nothing else, the swift back-and-forth on Cuba sanctions likely signals a return to the policy whiplash familiar from President Trump’s first term. As in 2016, policy reversals – and their implications – will come quickly, with no chance for the dust to settle.
US Developments
Nominee for Treasury Secretary Hints at Stronger Sanctions on Russia
During a Senate confirmation hearing, Scott Bessent, nominee for Secretary of the Treasury, supported more comprehensive sanctions on Russia’s energy sector. Bessent, in response to a question about the Russian sanctions regime, said that the Biden Administration sanctions on Russia, especially in the oil and energy spheres were “not fulsome enough.” Bessent later echoed this sentiment when discussing the Iran sanctions regime, claiming that, through sanctions policy, the US can “make Iran poor again, not the Iranian people.” Bessent argued that successful sanctions against Russia and Iran would require the US to increase its energy production.
Prior to the confirmation hearing, Bessent had not been vocal regarding his position on sanctions. Bessent’s seeming support for Russia sanctions is particularly notable as President Trump has repeatedly taken a relatively moderate tone with respect to US policy toward Russia and has not indicated an appetite for expanding those sanctions further. Bessent’s comments on Iran are more in keeping with President Trump’s articulated views and the approach taken during the first Trump administration in which President Trump significantly increased sanctions on Iran after withdrawing from the Iran nuclear deal. If confirmed, Bessent would oversee OFAC, the primary US sanctions regulator.
Trump Administration Reportedly Devising Oil Sanctions Plan for Russia, Iran, and Venezuela
Members of the Trump administration are reportedly crafting a “wide-ranging” sanctions strategy to facilitate an end to the war in Ukraine while increasing pressure on Iran and Venezuela. The Trump administration is said to be considering easing sanctions on Russian oil producers by issuing general licenses or raising the G7 oil price cap above $60 per barrel, if Russia is willing to negotiate a cease fire. If Russia is unwilling to negotiate, then President Trump could tighten sanctions as a means of increasing bargaining leverage. This could manifest in stricter secondary sanctions against European shippers and major buyers across India and China. This reporting is notable in light of Bessent’s comments during his confirmation hearing indicating support for additional sanctions on the Russian energy sector, as noted above.
In addition, the Trump administration is reportedly assessing policy options for Iran and Venezuela. President Trump’s key advisors are said to generally support a return to a “full maximum pressure strategy” against Iran starting with sanctions on major players in Iran’s oil industry as early as February. It also appears that President Trump’s team will seek to apply more pressure in Venezuela, but the Venezuelan operations of certain US oil firms may be a complicating factor for the Trump Administration.
Biden Administration Sanctions Russia’s Sanctions Evasion Networks
Just prior to the end of the Biden administration, OFAC and the State Department designated or re-designated hundreds of individuals and entities that allegedly facilitated Russian sanctions evasion. Notably, many of the individuals and entities designated were non-Russian, including numerous individuals and entities based in China. In addition to the designations, OFAC issued three new general licenses (GLs) authorizing, among other things, certain wind down transactions with some of the designated entities.
As part of this sanctions package, OFAC re-designated nearly 100 entities under Executive Order (EO) 13662. In the final weeks of the Biden administration, OFAC has re-designated many individuals and entities previously designated only under EO 14024. The re-designations were likely an attempt by the Biden administration to protect the sanctions from being unilaterally withdrawn by President Trump amid speculation that President Trump will use sanctions relief as a bargaining chip to end the war in the Ukraine. The sanctions authorities in EO 13662 are codified under the Countering American Adversaries Through Sanctions Act, or CAATSA, which provides Congress a right to review any proposal by the President to terminate the application of certain sanctions.
Trump Ends Biden’s West Bank Sanctions Program
On Inauguration Day, President Trump issued an EO revoking many of President Biden’s EOs and other executive actions, including EO 14115, which authorized sanctions against certain individuals and entities contributing to instability in the West Bank. The West Bank sanctions program had been a contentious issue between the Biden administration and the Israeli government and EO 14115 was expected to be short lived under the Trump administration. The revocation of EO 14115 will likely bring an end to litigation pending in Texas that is challenging the constitutionality of the EO. It is also expected to be part of a broader reset of the US-Israeli relationship under President Trump.
Treasury Sanctions Sudanese Armed Forces Leader
In a parting move targeting Sudan, the Biden administration sanctioned Abdel Fattah Al-Burhan (“Burhan”), the leader of the Sudanese Armed Forces (SAF). This designation follows OFAC’s designation of Rapid Support Forces (RSF) leader Mohammad Hamdan Daglo Mousa (“Hemedti”) on January 7, 2025, and means that the leaders of both main parties to the ongoing Sudan civil war are now subject to blocking sanctions. OFAC also sanctioned one individual and one company involved in weapons procurement on behalf of the Defense Industries System (DIS), a procurement arm of the SAF that OFAC previously sanctioned in June 2023.
While it is unclear whether the Trump administration will prioritize ending the conflict in Sudan, recently confirmed Secretary of State Marco Rubio stated in his confirmation hearing that the Biden administration’s genocide determination was justified. Furthermore, Secretary Rubio claimed that the US should convey its frustration with countries who allegedly fund the Sudan civil war, such as the United Arab Emirates (UAE), more directly. Taken together, those comments suggest Secretary Rubio may push for continued measures against the combatants in Sudan and, potentially, their foreign funders.
OFAC Sanctions DPRK Revenue Generators
Prior to the end of the Biden administration, OFAC sanctioned two individuals and four entities for generating revenue for the North Korean government. Specifically, OFAC designated a network consisting of a North Korean weapons-trading department, two of its front companies in Laos, the leaders of those front companies, and a Chinese company that supplies the North Korean government with electronics equipment. Over the past year, the Biden administration regularly imposed sanctions against North Korea for its material support, including contribution of frontline troops, of the Russian war in Ukraine, as well as problematic activities within North Korea itself.
Although President Trump previously implemented a strategy of selective engagement with North Korea, including a summit meeting with North Korean President Kim Jong Un, it is unclear whether he will do the same in his second term – and whether North Korea would be receptive to such an approach. Within the past month, Kim Jong Un vowed to pursue the “toughest” anti-US policy and initiated multiple short-range ballistic missile tests.
China Considering Sanctions on US Retailer in a New Approach to the Trade War
In anticipation of a growing economic conflict with President Trump, the Chinese government is reportedly considering sanctions on a prominent US retailer and other actions against US firms. Chinese officials announced a preliminary investigation into a prominent American retailer for engaging in “improper Xinjiang-related behavior.” Observers see the investigation as a response to the retailer’s compliance with the Uyghur Forced Labor Prevention Act and the Biden Administration’s recent decision to block imports from over three dozen Chinese companies under the law. The probe could lead to the retailer being added to China’s “unreliable entity list,” which would allow China to stop the company’s imports and exports from China, ban future investments, and bar employees from the country. So far, China has included on that list only US defense companies that have sold weapons to Taiwan. Additionally, China announced an antidumping investigation into the sale of low-end chips in China by leading US chip manufacturers. China has also announced that it would impose duties on certain industrial plastics exported by the US, the European Union, and Japan. As the “Trade War” between the US and China ramps up under President Trump, it seems likely that China will take further similar actions toward US companies working in China.
BIS Promulgates New Rules Targeting Technology Competition with China
In a flurry of activity during the last week of the Biden administration, BIS promulgated several significant new rules on advanced semiconductors, connected vehicles, and biotechnology. On January 13, 2025, BIS promulgated a new interim final rule further restricting the export of advanced computing chips and certain AI model weights. On January 15, BIS promulgated an additional interim final rule imposing further export controls on advanced computing semiconductors. BIS also promulgated a final rule prohibiting certain transactions involving the sale or import of connected vehicles integrating certain hardware or software that have a sufficient nexus with China or Russia. Finally, BIS also promulgated an interim final rule implementing export controls on certain types of laboratory instruments.
It is unclear whether the Trump Administration will seek to undo these rules and others on semiconductors, AI, and advanced technologies. President Trump and members of his incoming national security team have generally supported such restrictions against China and, in some instances, argued such measures have not gone far enough. Therefore, it is possible the new administration will keep most or all of these measures in place, perhaps even strengthening some of them. With that said, it is also possible administration officials will seek to entirely revoke certain of these rules, likely replacing them with alternative approaches.
EU Developments
EU reviewing potential impact of reversed Biden-era Russia sanctions
EU officials are reviewing Biden-era executive orders and sanctions, concerned that a potential Trump administration could rescind them, affecting European security and trade. The Biden administration's new sanctions on Russia’s energy sector could pressure the EU to cut its reliance on Russian LNG, while the EU strategizes on potential impacts of Trump's return, including reduced US support for Ukraine.
More broadly, Kaja Kallas, the EU’s High Representative for Foreign Affairs and Security, asserted that the EU is prepared to assume a leading role in supporting Ukraine if the US reduces its assistance, according to. She emphasized that no US leader wants Russia to become a dominant global power and stressed the importance of compliance with the EU’s Digital Services Act. Addressing Trump's comments on Greenland, Kallas highlighted the Arctic's strategic importance and supported increased EU defense spending to ensure both European and global security. In addition, the European Commission has disbursed the first €3 billion tranche of its €18.1 billion Macro-Financial Assistance loan to Ukraine, funded by immobilized Russian assets.
Netherlands tightens export controls for advanced semiconductor manufacturing equipment
From April 1, 2025, the Netherlands will tighten its export controls on advanced semiconductor manufacturing equipment, requiring government authorization for additional types of technology. These new rules will mostly have consequences for the exports of highly specialised equipment made by Dutch semiconductor equipment producers like ASML, which holds a dominant position in the global semiconductor supply chain. The Netherlands first introduced export licenses for Dutch semiconductor equipment in 2023 after pressure from the US to limit exports to China in light of semiconductor's significant military applications. The new policy change, announced by Minister for Foreign Trade and Development Reinette Klever, aims to mitigate the increased security risks associated with the uncontrolled export of specific technologies, such as measuring and inspection equipment used in semiconductor production.
European Commission: New plan to reduce EU's energy dependency on Russia
The European Commission is set to unveil its new plan to end the EU's reliance on Russian gas, oil and nuclear capacity on 26 February 2025. This initiative aims to address the remaining dependencies on Russian energy imports. The roadmap will be presented by EU clean transition chief Teresa Ribera and will coincide with the Action Plan on Affordable Energy and the Clean Industrial Deal, targeting decarbonization and economic growth. This plan comes amid renewed calls from six Nordic and Baltic countries to lower the G7 oil price cap to further squeeze Russia's oil revenue. They argue that the current barrel cap should be reduced to limit Russia’s capacity to fund its war efforts. Additionally, Poland and nine other EU countries are advocating for stricter sanctions such as an eventual ban on Russian LNG imports, despite opposition from Hungary and Slovakia. The EU’s new strategy will aim to address these multifaceted challenges, balancing the need for energy security with economic and environmental considerations.
EU extends restrictive measures on Venezuela in wake of contested presidential elections
The European Council has extended its restrictive measures against Venezuela until January 2026 in response to ongoing actions that undermine democracy, the rule of law, and human rights. The Council reintroduced travel bans on four individuals, initially suspended to encourage credible elections in July 2024, and added sanctions against 15 more individuals, including members of the National Electoral Council, the judiciary, and security forces. These measures follow the unverified results of the July 2024 Presidential Elections, where the authorities failed to respect the will of the people, leading to increased repression and arrests. The EU has committed nearly 75 million Euros to address urgent humanitarian needs in Venezuela and stands by those upholding democratic values.
