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 country, industry 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 2026, there has been a notable shift in political messaging and tone from the Trump administration, together with certain adjustments in emphasis regarding US national security and foreign policy priorities. At the time of publication, this is reflected in the memorandum of understanding between Iran and the United States in the wake of the war, updated legislation regarding the Outbound Investment Security Program, and the easing of enforcement of traditional sanctions programmes against Venezuela.

On 17 June 2026, President Trump and President Masoud Pezeshkian of Iran signed a memorandum of understanding, aiming to end the war between the two countries. The agreement included terms regarding reopening the Strait of Hormuz, a USD300 billion plan for Iran’s “reconstruction”, and the United States terminating sanctions on Iran. The agreement calls for an end to hostilities and started a 60-day negotiating clock to reach a final deal on the future of Iran’s nuclear programme. It is uncertain whether this agreement will result in a more permanent resolution and, even if it does, whether it will end the Trump administration’s campaign of maximum pressure on Iran in the year to come.

In Venezuela, the Trump administration has issued several licences that permit specific oil, gas, petrochemical, electricity, and minerals sector activities that were previously prohibited, apparently encouraging industry back into the country.

Lastly, the US Congress passed the Comprehensive Outbound Investment National Security Act (the “COINS” Act) as part of the National Defense Authorization Act (NDAA) in December 2025. The COINS Act broadens many aspects of the restrictions currently in place as a result of the Outbound Investment Security Program, including expanding the covered technologies to include high performance/supercomputing and hypersonic systems, while also widening the geographic scope to include Cuba, Iran, North Korea, and Venezuela. This expansion of the Outbound Program will likely lead to more enforcement efforts.

Overall, existing US sanctions laws and regulations continue to expand and be vigorously enforced against both US and non-US persons and entities alike, across the full range of the more than three dozen sanctions programmes of the US Department of Treasury’s Office of Foreign Assets Control (OFAC).

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, operate in US currency, or use 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 Department of Justice (DOJ) has the authority to investigate and prosecute criminal violations of certain US sanctions programmes. The Bureau of Industry and Security (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 where 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. In addition, they must provide 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.

• 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 the 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 the Trading with the Enemy Act (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 programme. As stated by OFAC’s fact sheet, this licence “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 the importation of and dealing in petroleum and petroleum products from Syria.

• Passage of the COINS Act in December 2025, as part of the FY 2026 NDAA. The COINS Act broadens many aspects of the restrictions currently in place as a result of the Outbound Investment Security Program, including expanding the covered technologies to include high performance/supercomputing and hypersonic systems, while also widening the geographic scope to include Cuba, Iran, North Korea and Venezuela. This expansion of the Outbound Program will likely lead to more enforcement efforts.

• Related provisions of the NDAA also threaten to expand sanctions against companies identified as a Chinese Military Industrial Complex (CMIC) company on OFAC’s “Non-SDN Chinese Military-Industrial Complex Companies List”. Provisions in the NDAA lay the groundwork for a notable expansion of the CMIC programme, which will involve broadening the investment restrictions on the companies on that list.
• Passage of several general licences regarding Venezuela. These licences permit specific oil, gas, petrochemical, and electricity sector activities that had previously been prohibited for US persons. These authorisations include exports and imports of Venezuelan-origin crude oil and refined products, sales of US-origin diluents, and the provision of the goods, services and technology necessary to operate energy and petrochemical facilities. Separate licences are focused on the minerals sector, authorising the sales and supply of US-origin goods and services for mining operations by previously established US entities in Venezuela. Other licences permit financial services to certain Venezuelan banks and authorise legal, financial and consulting services related to potential debt restructuring or contingent investment negotiations.

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 2026, 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 and Iran. This includes programmes such as the Outbound Investment Security Program, implemented by the Department of the Treasury, and the recently enacted COINS Act, which broadens the programme – 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.

Additionally, at the time of writing, the United States and Iran are undergoing a transition period in the wake of the conflict and the signing of the memorandum of understanding between the two countries in June 2026. As of that date, the countries agreed to Iran reopening the Strait of Hormuz, a USD300 billion plan for Iran’s “reconstruction”, and the United States’ termination of sanctions on Iran. At the time of writing, the agreement called for an end to hostilities and started a 60-day negotiating clock to reach a final deal on the future of Iran’s nuclear programme.

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 also encourages petitioners 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 [the] law”. However, because the courts are to defer to and presume the validity of OFAC’s determination, meeting this standard is typically difficult.

As OFAC has emphasised modernisation as one of its top priorities, there has been an increase in delistings. For example, in May 2026, OFAC removed sanctions on 76 “outdated” targets, which were removed from the SDN List. The removals were cited as part of the Treasury Department’s modernisation initiative. The outdated entries included deceased individuals, scrapped or decommissioned vessels, persons designated as part of illicit financial networks that are no longer in operation, and individuals who were designated more than ten years ago who lack sufficient identifiers for continued screening and do not appear to be an ongoing threat.

Should a petitioner successfully bring a delisting challenge under the APA, 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).

Since 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. The 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.