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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Lede
What Next for the Russian Oil Price Cap?
Early last week, media reported that the EU would not be pushing ahead with plans to impose a lowered price cap on Russian oil exports. The plan, which was set to be discussed on Monday, was initially included in the bloc’s forthcoming 18thsanctions package, and would have lowered the price cap from $60 per barrel to $45 in an attempt to further deny Moscow resources to fund its war on Ukraine. Diplomats reportedly walked back on lowering the price cap as intra-EU sanctions negotiations are ongoing, given geopolitical upheaval and oil market jitters over the Iran-Israel conflict.
Oil prices climbed sharply in early June as Iran and Israel’s longtime “shadow war” briefly went hot. Brent crude prices quickly shot up 7%, before eventually settling lower than prices prior to Israel’s attack – just a few dollars up from the year’s low of $61 per barrel. Despite little actual price impact, significant global anxiety hinged on Iran’s capacity to rock the international energy market by closing the Strait of Hormuz, a chokepoint for oil originating from major Gulf producers who export some 20% of the world’s total supply. More than simply cutting off supply, shutting the Strait would deprive markets of the Gulf reserves and excess production that represents the majority of the slack – or ability to respond to dramatic supply shifts – in the global supply. Some also worried that Iran could strike the oil infrastructure of other Gulf producers as a lower-stakes retaliation in a repeat of 2022 Iranian strikes on Saudi Aramco facilities in Abqaiq in 2019. In light of heightened risks of energy market disruption to which a lower price cap would only add uncertainty – as well as being increasingly onerous for member states to comply with – the EU has reportedly tabled the cap for now.
An oversaturated oil market – seeing a relative glut of supply in light of a flagging Chinese economy and repeated OPEC+ production increases – calmed the energy market’s nerves in the short term, preventing extreme jitters in the first few days of the conflict. Ultimately, no large-scale energy disruption in the region came to pass: Iran, likely fearful of American and Israeli reprisals and unwilling to hobble its own economy by cutting off crude exports to China or damage a valuable détente with its Gulf Arab neighbors (who were reportedly among the loudest behind-the-scenes voices calling for restraint), opted for a token retaliation in small-scale strikes in the US’ Al Udeid Air Base in Qatar.
That does not mean, however, that the situation has entirely stabilized: while a temporary ceasefire is in place (albeit shakily), Israel has made clear that – as in Lebanon – Jerusalem will not hesitate to resume strikes to avert potential threats. Analysts are pessimistic that renewed US-Iran nuclear talks, announced to begin next week, will result in a negotiated, durable agreement that will be acceptable to Israel, for whom the complete elimination of Iranian nuclear capability is the goal. New flare-ups of violence are a distinct possibility, especially if Israel broadens its attacks to include targets that could suggest to Tehran that the survival of its regime – rather than its military and nuclear capabilities more narrowly – is at stake. In the final days of Iran and Israel’s recent conflict, Israel had hit targets including civilian infrastructure in urban environments and, most strikingly, the infamous Evin prison, which houses many Iranian dissidents. A more desperate Iran, convinced that the very existence of the Islamic Republic is at stake, may be significantly less predictable and more willing to risk its own economic relationships.
Prior to geopolitical upheaval in the Middle East, observers were skeptical about the cap’s implementation. The EU and UK have already signaled that they will not wait for US alignment to lower the price cap, and are well-positioned to do so given the club of Western maritime insurers’ location in the UK. While they do not need Washington, if the Trump administration were to outright reject the price cap could fracture the insurers club, fragmenting the sanctions regime and raising political risks and compliance costs for sellers. The Trump administration has nixed the idea of new Russia sanctions, with Secretary of State Rubio in Brussels for the NATO summit calling the idea of new sanctions “admitting that this is not going to be negotiated anytime soon.” However, there are no signals that the US may undercut the price cap, and the White House may well tacitly support European pressure on Russia amid dragging negotiations.
US Developments
Treasury Issues Designations Under New Fentanyl Authority
The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued orders identifying three Mexico-based financial institutions as being of primary money laundering concern in connection with illicit opioid trafficking. The financial institutions, CIBanco S.A., Institution de Banca Multiple (“CIBanco”), Intercam Banco S.A., Institución de Banca Multiple (“Intercam”), and Vector Casa de Bolsa, S.A. de C.V. (“Vector” ), which have billions of dollars in total assets or under management, allegedly “played a longstanding and vital role in laundering millions of dollars on behalf of Mexico-based cartels and facilitating payments for the procurement of precursor chemicals needed to produce fentanyl.” As a result of the designations, after the effective date, US financial institutions are prohibited from engaging in transmittals of funds from or to CIBanco, Intercam, or Vector, or from or to any account or convertible virtual currency address administered by or on behalf of CIBanco, Intercam, or Vector.
These orders are the first designations by FinCEN pursuant to the Fentanyl Sanctions Act and the FEND Off Fentanyl Act, which provide Treasury with additional authorities to target money laundering associated with the trafficking of fentanyl and other synthetic opioids. FinCEN expects covered financial institutions to implement procedures to ensure compliance with the terms of the orders and to exercise reasonable due diligence to prevent engaging in transmittals of funds involving CIBanco, Intercam, or Vector. FinCEN has published FAQs to help these financial institutions comply with the terms of the orders.
Shortly after FinCEN’s announcement, Secretary of State Marco Rubio announced a new visa restriction policy that will apply to family members and close personal and business associates of individuals sanctioned under Executive Order (E.O.) 14059, which targets persons alleged to be involved in the trafficking of illicit drugs.
OFAC Sanctions Tren de Aragua Leader
OFAC has sanctioned Giovanni Vicente Mosquera Serrano, an alleged leader of the Foreign Terrorist Organization (FTO) and Specially Designated Global Terrorist (SDGT) Tren de Aragua (TdA). According to OFAC, Mosquera Serrano is involved in TdA’s drug trafficking and financial operations. Mosquera Serrano’s designation follows similar OFAC designations of alleged cartel leaders on June 9 and June 18. The Department of State, through its Transnational Organized Crime Rewards Program, is offering a reward of up to $3 million for information leading to the arrest or conviction of Mosquera Serrano. The Federal Bureau of Investigation has also placed Mosquera Serrano on its Top 10 Most Wanted List.
White House Discusses Iran Sanctions Relief; Chinese Purchases of Iranian Oil
After his announcement of a ceasefire between Israel and Iran, President Trump stated on Truth Social that “China can now continue to purchase Oil from Iran.” The announcement prompted speculation that sanctions relief on Iranian oil exports to China was part of the ceasefire negotiations. The Trump administration has repeatedly sanctioned Chinese oil refineries and importers as part of its “maximum pressure” strategy on Iran.
A senior official from the White House later said that President Trump was “simply calling attention to the fact that, [because of US strikes on Iranian nuclear facilities and the ceasefire], the Strait of Hormuz will not be impacted, which would have been devastating for China.” The official stated that “[t]he President continues to call on China and all countries to import our state-of-the-art oil rather than import Iranian oil in violation of US sanctions.”
On Friday, President Trump said that he had been “working on the possible removal of sanctions,” but that his administration has “immediately dropped all work on sanction relief” in response to Iranian Supreme Leader Ayatollah Ali Khamenei’s claim that Iran won the recent conflict with Israel and that the US strikes on Iranian nuclear facilities were ineffective.
Rubio: Sanctions Against Russia Still Possible at the “Right Time and Place”
Secretary of State Marco Rubio stated during an interview that increased sanctions such as those proposed by Senators Lindsey Graham (R-SC) and Richard Blumental (D-CT) via the Sanctioning Russia Act of 2025 (S. 1241/H.R. 2548) “may happen” if the President determines that the Kremlin is not seriously entertaining its negotiations with Ukraine. Specifically, Rubio stated that the Trump administration has talked about the Act with Congress, including how to frame and structure it such that it provides “flexibility” for the President. However, Rubio cautioned that imposing sanctions would cede leverage that the US possesses over Russia and effectively end negotiations, which the President is not yet willing to do. According to Rubio, the President “will know the right time and place” in which he may want to push for the Sanctioning Russia Act of 2025, specifically, or other sanctions on Russia, more generally.
UK Developments
First UK Conviction for Breach of Anti-Terrorism Sanctions
A UK magistrates’ court convicted Aozma Sultana of breaching the UK’s Counter Terrorism Sanctions Regulations by failing to provide information to OFSI. On February 6, 2025, UK prosecutors charged Ms. Sultana with an offence under the UK Counter-Terrorism Sanctions Regulations. Ms. Sultana, who was charged with failing to provide the UK Government with information about her finances, was sanctioned by the UK Government and made subject to an asset freeze on March 27, 2024, following her suspected involvement in providing financial support to Gaza Now, a news agency that the UK Government considers to promote Hamas and Palestinian Islamic Jihad terrorist groups. The UK Charity Commission previously announced a statutory inquiry to investigate funds raised for charitable purposes by and on behalf of Ms. Sultana. The case highlights an increased focus on the enforcement of sanctions breaches, as well as a willingness to pursue criminal enforcement in appropriate cases against sanctioned individuals.
New Sanctions Whistleblowing Protections Introduced
On June 26, 2025, the Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2025 came into force, expanding whistleblowing protections in the context of UK sanctions enforcement. The amendments designate the Treasury, as well as the Secretaries of State for Business and Trade and for Transport, as prescribed persons for sanctions-related disclosures. These amendments mean that workers who report concerns about financial, transport, or certain trade sanctions to these departments will now qualify for whistleblower protections, strengthening enforcement by encouraging disclosures of potential sanctions breaches.
UK Publishes New Sanctions Guidance for Non-UK Businesses
On June 27, 2025, the Foreign, Commonwealth and Development Office published new guidance to support non-UK businesses by providing information about UK sanctions relevant to non-UK businesses operating outside the UK. The guidance summarises the scope and requirements of UK sanctions and outlines the risks of non-compliance for non-UK businesses, particularly if they have business dealings with the UK. The guidance also includes practical advice on how to implement good compliance practices and avoid becoming complicit in the circumvention of UK sanctions. The guidance includes country-specific guides for businesses in Armenia, Georgia, Kazakhstan, Kyrgyzstan, and Uzbekistan, which contain additional information about local laws and regulations that may be relevant to sanctions compliance for businesses operating in those countries. The materials have been made available in Armenian, Georgian, Russian, Thai, and Turkish.
OFSI Amends Russia Oil-Related General Licences
On June 27, 2025, OFSI amended two Russian oil-related General Licences. The continuation of business operations with Gazpromneft-Sakhalin LLC and any entity owned or controlled by it in connection with the exempt Sakhalin 2 project under General Licence INT/2025/5635700 was extended until June 28, 2026. Additionally, General Licence INT/20244423849, which exempts certain projects and countries from oil price cap restrictions was extended with respect to Sakhalin 2 until June 28, 2026.
EU Developments
Slovakia Seeks Delay on EU Sanctions Over Energy Security Concerns
Slovakia has reportedly announced it will not support the European Union's proposed 18th package of sanctions against Russia until its concerns over gas supplies post-2027 are resolved. Slovak Prime Minister Robert Fico has called for a delay in the vote, citing potential risks of energy supply shortages, rising prices, and up to €20 billion in arbitration losses due to existing contracts with Russia's Gazprom.
The sanctions package, proposed on 10 June 2025 by the European Commission, targets Russia's energy revenues, banks, and military industry as part of ongoing responses to its invasion of Ukraine. However, Slovakia and Hungary oppose another proposal recently issued by the European Commission plan to phase out Russian energy imports by 2027 (see here), arguing that it would make it difficult for the two countries to find alternative energy sources.
Fico emphasized that Slovakia sees the sanctions package as inseparably linked to the energy import timeline and insisted that key issues must be addressed before moving forward. While European diplomats remain optimistic about resolving the impasse at the EU summit, Fico has stated that Slovakia will not vote on the sanctions package at this time.
EU Council Amends EU Global Human Rights Sanctions Regime
The EU Council has amended several pieces of sanctions legislations under the EU Global Human Rights Sanctions regime. Decision 2020/1999 and Regulation 2020/1998 were revised to include five individuals to the list of those subject to restrictive measures outlined in the Annex to Decision 2020/1999, due to their responsibility for serious human rights violations and abuses in Syria. These violations include participation in violent incidents in Syria's coastal region in March 2025, as well as supporting the use of chemical weapons against civilians under the al-Assad regime. The newly listed individuals consist of three former members of the Syrian Republican Guard and Armed Forces, along with two prominent businessmen who provided financial support for crimes against humanity committed under the al-Assad regime. These individuals are subject to restrictive measures, including asset freezes, travel bans within the EU, and prohibitions on the provision of funds or economic resources.
Third Countries Align with EU Sanctions Targeting Guatemala
The High Representative of the EU has announced that Albania, Armenia, Bosnia and Herzegovina, Iceland, Liechtenstein, the Republic of Moldova, Montenegro, North Macedonia, Norway and Ukraine have aligned themselves with Council Decision 2025/1199, the framework for sanctions on those responsible for undermining democracy, the rule of law and a peaceful transfer of power in Guatemala. As reported in our June 16 Sanctions Update, the Decision added three individuals and one entity to the list of individuals and entities subject to restrictive measures in the Annex to Decision 2024/254, while also updating the entries for five individuals involved in activities undermining democracy and the rule of law.
EU Council Updates Sanctions Listing Against Russia
The EU Council has updated the framework concerning restrictive measures in view of Russia’s destabilizing activities. Specifically, Council Decision 2024/2643 and Regulation 2024/2642 were amended to add a Swiss-Cameroonian social media influencer to the list of individuals and entities set out in Annex I to Regulation 2024/2642. The individual added to the sanctions list has been identified as a vocal supporter of Russia’s geopolitical agenda since her participation in the 2019 Sochi Summit. The restrictive measures imposed include asset freezes and restrictions on financial transactions.
