The field of economic sanctions in the past several years has been characterised by dynamic and rapid growth and development, particularly with respect to the Russia and Iran sanctions programmes, among other countries, industries and policy initiatives, including legislation and regulations directed at China, Venezuela, the fintech/virtual currency, shipping and transportation industries, the area of cybersecurity, and a long-standing commitment to counter global human rights violations. Sanctions regulation and enforcement show no signs of abating as the US government continues to employ these tools to address current national security and foreign policy priorities.

In 2025, there has been a notable shift in political messaging and tone from the new US administration, together with certain adjustments in emphasis regarding US national security and foreign policy priorities. At the time of this publication, this has emphasised the imposition of “maximum pressure” on Iran, vigorous strategic competition with China, which may include sanctions activity, and ongoing enforcement of traditional sanctions programs against Venezuela and other regimes. Sanctions regulations have eased against Syria, and, despite popular speculation to the contrary, have not eased against Russia. Overall, existing US sanctions laws and regulations continue to be implemented and vigorously enforced against both US and non-US persons and entities alike across the full range of its more than three dozen sanctions programs.

The US Treasury Department’s Office of Foreign Assets Control (OFAC), in coordination with the Department of Justice (DOJ), has recently issued its first two new enforcement releases under the Trump administration, both in June 2025, sending a strong signal about the new administration’s enforcement priorities. 

First, OFAC imposed the statutory maximum civil penalty of USD215,988,868 on a California-based venture capital firm, GVA Capital Ltd., for knowingly managing an investment for sanctioned Russian oligarch Suleiman Kerimov, while aware of his blocked status, in violation of applicable Ukraine/Russia sanctions, and for failing to fully and timely respond to an OFAC subpoena. OFAC highlighted by this action that gatekeepers – such as “investment professionals, accountants, attorneys, and providers of trust and corporate formation services, among others” – must remain vigilant of sanctions risks posed by sanctioned parties or their proxies who may seek to use their services. OFAC also emphasised that it expects non-bank financial institutions, including venture capital firms and investment advisers, to develop and maintain effective risk-based sanctions compliance controls to counter sanctions risks in their industries.

Second, the National Security Division (“NSD”) of the DOJ announced parallel resolutions coordinated with OFAC, and with the US Department of Commerce’s Bureau of Industry and Security (“BIS”) Office of Export Enforcement (“OEE”) of apparent violations of US sanctions and export control laws, with private equity firm White Deer Management LLC (“White Deer”) and its affiliates, after the firm discovered and voluntarily self-disclosed criminal violations of US sanctions and export laws committed by a company it had acquired, Texas-based Unicat Catalyst Technologies LLC (“Unicat”). Most notably, the DOJ declined to prosecute the acquiring firm after White Deer and Unicat’s new management submitted a voluntary self-disclosure, ceasing the offensive conduct and co-operating with the government. This is the DOJ’s first reported declination under its March 2024 NSD Enforcement Policy for Business Organizations that applies to Voluntary Self-Disclosures in Connection with Acquisitions (the “NSD M&A Policy”). The OFAC release also highlights extensive remedial measures undertaken by White Deer and Unicat upon the new management’s discovery of the offensive conduct, with voluntary self-disclosure credit provided to Unicat, resulting in a 50% reduction of OFAC’s base civil penalty amount.

The economic and trade sanctions programmes administered and enforced by OFAC are driven by US national security and foreign policy goals and objectives. In that respect, it bears noting that all individuals and entities subject to US jurisdiction, as well as foreign persons that conduct business in or with the United States or US persons, or using US-origin goods or services, are impacted by US sanctions laws and regulations.

Organisations would therefore be well advised to conduct a routine risk assessment, and if appropriate, an ongoing or periodic evaluation, to identify potential OFAC issues they may encounter, including by referencing OFAC’s current or emerging enforcement and compliance priorities. These risks could arise from an organisation’s clients and customers, products, services, supply chain, intermediaries, counterparties, transactions or geographic locations, depending on the nature of the organisation.

That said, and as a general matter, sectors that are particularly affected by sanctions regulations and enforcement activity include banking and financial services, including venture capital or private equity firms and investment advisers, energy, technology, shipping and transportation (particularly with respect to the transportation of oil or other petroleum products) and the virtual currency sector.

OFAC is the primary agency responsible for administering and enforcing US sanctions. The DOJ has the authority to investigate and prosecute criminal violations of certain US sanctions programmes. BIS administers and enforces the Export Administration Regulations (EAR), which are the primary export control regulations in the US.

The US State Department is also responsible for administering certain economic sanctions and export controls. For example, the State Department’s Directorate of Defense Trade Controls (DDTC) in the Bureau of Political-Military Affairs implements the International Traffic in Arms Regulations (ITAR), pursuant to the Arms Export Control Act.

US persons (and those subject to US jurisdiction) who are in possession or control of blocked property must file a Report on Blocked Property with OFAC within ten business days of the date that the property becomes blocked. Forms for reporting blocked property, whether “Financial” or “Tangible/Real/other Non-Financial Property”, are available on OFAC’s website and are commonly used by reporting persons. Persons holding blocked property must also file an Annual Report on Blocked Property by 30 September, reflecting all blocked property held as of 30 June of the current year. US persons (and those subject to US jurisdiction) must also file a Report of Rejected Transactions within ten business days of the rejection of a transaction that was not blocked, but where processing or engaging in the transaction would nonetheless violate applicable US sanctions.

US persons participating in litigation, arbitration or other binding alternative dispute resolution on behalf of or against persons whose property or interests in property are blocked or retained under applicable law, or when the outcome of any proceeding may affect blocked property or retained funds, must provide notice of such proceedings and submit copies of certain documents submitted and orders or opinions rendered by the court or other adjudicatory body, as well as reports of hearings or status conferences where it appears the court may issue an order or judgment or is considering or may decide any pending dispositive motion on the merits of the proceeding or any claim raised therein, as further detailed in OFAC’s regulations.

Persons subject to OFAC record-keeping requirements (ie, by engaging in a transaction pursuant to an OFAC licence) or reporting requirements with respect to blocked property are to retain records of such transactions for five years after the date of such transaction, or for the period such property is blocked, and for at least five years after the date such property is unblocked.

The most significant developments related to sanctions in the past three years include the following.

• The rapid expansion and intensification of the Russian Foreign Harmful Activities Sanctions programme, following Russia’s invasion of Ukraine in February 2022, resulted in thousands of designations of individuals and entities, including broad sectoral sanctions targeting a range of actors within key sectors of the Russian Federation’s economy.
• Enhanced government enforcement against conduct in violation of US sanctions laws and regulations, with a recent focus on secondary sanctions that target third-country actors and sanctions evaders. This focus has prompted high-level US officials to communicate at industry conferences that “sanctions are the new FCPA”, referencing that DOJ and other government agencies are now directing additional resources to investigate and enforce against violations of sanctions laws and regulations, mirroring those regulators’ historical focus on international violations of the Foreign Corrupt Practices Act by US persons (or others subject to US jurisdiction).
• The April 2024 passage of the “21st Century Peace Through Strength Act”, which includes a provision extending the statute of limitations for enforcement of sanctions violations under both IEEPA and TWEA, from five to ten years. The lengthened statute of limitations will affect all of the numerous sanctions programmes enacted under IEEPA and TWEA, and gives the government additional breathing room to investigate and enforce against apparent violations of those laws and regulations.
• A final rule amending various reporting, procedures and penalties regulations, effective on 8 August 2024. In the new rule, filers are generally required to use the electronic OFAC Reporting System (ORS) for submission to OFAC of initial reports of blocked property and Annual Reports of Blocked Property pursuant to § 501.603(d), and reports of rejected transactions under § 501.604(d), among other changes seeking to streamline reporting requirements and require filings to be made via email rather than mail or facsimile transmission.
• OFAC’s 23 May 2025 release of General License (GL) 25 in the Syria sanctions program. As stated by OFAC’s fact sheet, this license “effectively” lifts sanctions on Syria, together with a concurrent waiver issued by the US Department of State under the Caesar Syria Civilian Protection Act. GL 25 authorises transactions that were previously prohibited under the Syria Sanctions Regulations, including, generally speaking, the provision of services to people and companies in Syria; new investment in Syria; transactions with the new Government of Syria and with certain blocked persons listed in the Annex to GL 25; and import and dealing in petroleum and petroleum products from Syria.

Given that decisions concerning sanctions are often driven primarily by US national security and foreign policy considerations, there is continued turbulence with respect to China, Russia, Iran, Venezuela and other notable sanctions regimes. 

In 2025, a number of national security initiatives are being rapidly advanced by different elements of the US government, most of which are focused on China and other “countries of concern,” including Venezuela, Russia, Iran, Cuba and North Korea. This includes programs such as the recently implemented “Outbound Investment Security Program” implemented by the Department of the Treasury and the “Data Security Program” advanced by the National Security Division of the Department of Justice – as well as sector-specific legislative and regulatory initiatives, in industries such as the US maritime, logistics and shipbuilding sectors, as well as the semiconductor, artificial intelligence, and quantum computing sectors. At the time of this writing, the US Congress continues to advocate for tougher Russian sanctions to keep pace with the pressure imposed by successive sanctions packages in other jurisdictions, such as the United Kingdom and the European Union. Additional sanctions actions could follow on from these priorities.

OFAC explains that “the power and integrity of [its] sanctions derive not only from [OFAC’s] ability to designate and add persons to sanctions lists, including the [SDN List], but also from [OFAC’s] willingness to remove persons from such lists consistent with the law”. Accordingly, OFAC regularly receives and considers challenges to sanctions designations.

Delisting is possible in a host of circumstances, such as:

• where there is a demonstrable positive change in behaviour;
• if an SDN or listed person dies;
• when the basis for the designation or other sanction no longer exists; or
• when the designation or other sanction was based on mistaken identity.

The delisting petition procedures are set forth at 31 CFR § 501.807.

Persons seeking to challenge a designation must submit a written request for removal (referred to as a “petition” or “request for consideration”). The petition should include:

• the listed person’s name and mailing address (including email address) and, if appropriate, their authorised representative’s name and mailing address (including email address);
• proof of the listed person’s identity (such as a copy of a government-issued identification card);
• the date of the relevant OFAC listing action (such as the designation or identification);
• the SDN listing (or other OFAC listing) as it appears on the SDN List (or other OFAC list);
• a request for the reconsideration of OFAC’s determination, including a detailed description of why the listed person should be removed; and
• if writing on behalf of a petitioner, a signed authorisation from the petitioner indicating that the representative is writing on behalf of the petitioner and identifying their relationship to the petitioner. OFAC encourages petitioners also to include arguments or evidence establishing that the listing has an insufficient basis or that the circumstances resulting in the listing no longer apply.

If OFAC denies a petition, the petitioner may challenge that determination under the Administrative Procedure Act (APA) in federal court or file another administrative petition. Under the APA, courts are to “hold unlawful and set aside agency action, findings, and conclusions” that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”. However, because courts are to defer to and presume the validity of OFAC’s determination, meeting this standard is typically difficult.

Should a petitioner successfully bring a delisting challenge under the Administrative Procedure Act, the available remedy would be the delisting itself. The APA can be enforced only through equitable, injunctive relief, and does not permit plaintiffs to obtain damages against a federal agency, such as OFAC; see 5 USC. § 702 (prohibiting the award of money damages for violations of the APA).

Because each application is considered on a case-by-case basis, there is no fixed time within which OFAC provides delisting determinations. Generally, the review process can be lengthy. OFAC advises that its review timing depends upon a range of factors, including:

• whether OFAC needs additional information;
• the need to engage in interagency consultation;
• how timely and forthcoming the petitioner is in responding to OFAC’s requests; and
• the specific facts of the case.

When more information is required, OFAC will send the petitioner questionnaires that identify the additional information or clarification needed from the petitioner. OFAC states that it “endeavours to send the first questionnaire within 90 days from the date OFAC receives the petition”. It is not uncommon for OFAC to send one or more follow-up questionnaires and to engage in additional research to verify claims made by a petitioner.

OFAC implements sanctions that prohibit the export or import of services to or from other countries.

For example, under the Russia sanctions programme, pursuant to Executive Order 14071, the US prohibits the exportation, re-exportation, sale or supply, directly or indirectly, from the United States or by a United States person of a wide array of services, including:

• accounting, trust and corporate formation services;
• management consulting;
• covered metals acquisition services;
• IT support services for enterprise management software, design and manufacturing software;
• cloud-based services for enterprise management software, design and manufacturing software;
• architecture, engineering, IT technology consultancy and design services;
• quantum computing; and
• trading/commodities brokering, financing, shipping, insurance (including reinsurance and protection and indemnity), flagging and customs brokering services as they relate to the maritime transport of crude oil and petroleum products of Russian Federation origin.

OFAC implements sanctions that prohibit the export or import of goods to or from other countries.

For example, under the Russia sanctions programme, pursuant to Executive Order 14066, the US prohibits the importation of the following products of Russian Federation origin into the US:

• crude oil and petroleum;
• petroleum fuels, oils and products of their distillation;
• liquefied natural gas;
• coal; and
• coal products.

Executive Order 14068 likewise prohibits the importation of fish, seafood, alcoholic beverages and non-industrial diamonds of Russian Federation origin into the United States.

In the United States, whether compliance with sanctions constitutes a bar to a party’s performance of its contractual obligations is a fact-specific inquiry that largely depends on the terms of the applicable contract.

Parties will typically raise defences relating to non-performance – namely, impossibility, illegality, force majeure or frustration of purpose. In evaluating these defences, US courts will look to a variety of factors, including:

• the language of the parties’ agreement;
• the specific sanctions at issue;
• the purpose of the applicable contract; and
• the impact of sanctions on the circumstances of the parties.

When a sanctioned party seeks relief from its contractual obligations, US courts have also considered the foreseeability of such sanctions and the parties’ efforts to comply with the contract’s terms, conducting a close review of what the sanctions at issue expressly prohibit in practice.

In dealing with the enforcement of judgments when sanctions issues arise, US courts generally adhere to OFAC’s requirement that the judicial disposition of blocked property is prohibited unless authorised by OFAC through either a specific or general licence.

A narrow exception exists where a party holds a judgment against a “terrorist party” (including foreign states designated as state sponsors of terrorism) within the meaning of the Terrorism Risk Insurance Act of 2002 (TRIA) (28 USC.S. § 1610 note). The TRIA permits such parties to seek the attachment and execution of blocked assets, provided that doing so would otherwise satisfy the requirements of applicable law. Courts have held that, in these circumstances, such attachment and execution may proceed without a separate requirement to obtain a licence from OFAC.

Depending on the underlying authority used to designate a person for sanctions, different US government agencies may have the lead with respect to designation decisions. The US Department of the Treasury is in charge of publishing and administering the SDN list, and is typically the primary authority in charge of designation decisions. That said, many programmes call for designations to be made by the Treasury, in consultation with other parts of the US government, such as the Department of State and the US Attorney General. Other programmes will give the Department of State or other US agencies (often in consultation with the Department of the Treasury) the authority to designate persons for sanctions.

Pursuant to OFAC’s 50 Percent Rule, the property and interests in property of entities directly or indirectly owned 50% or more, whether individually or in the aggregate, by one or more blocked persons are themselves considered blocked. Therefore, if one or more sanctioned persons own an entity, and their collective ownership stake is 50% or higher, then that entity and its property will also be sanctioned. OFAC’s guidance in this area emphasises the importance of conducting thorough due diligence to determine relevant ownership stakes.