Sanctions Watch | Weekly Vol. 147

Sanctions Watch Vol 147

In the latest edition of our Sanctions Watch weekly digest, we present significant updates on sanction watchlists and regulatory developments.

OFAC Warns of Rising Use of Sham Transactions to Evade Sanctions, Signals Intensified Enforcement

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has issued a sanctions advisory highlighting the growing use of sham transactions by sanctioned individuals to evade restrictions while retaining control over assets. These arrangements, often executed through proxies, trusts, shell companies, or family members, create the illusion of divestment while leaving the underlying ownership unchanged.

OFAC emphasized that such transactions do not extinguish a blocked person’s interest, as sanctions apply based on practical and economic realities rather than formal ownership structures. The advisory outlines multiple typologies, including asset transfers to spouses or children, re-registration of companies under new names, and the use of complex offshore structures to conceal control.

Real-world cases cited include Russian oligarchs using layered entities and trusts to maintain control over assets, as well as enforcement actions against firms knowingly managing investments for sanctioned individuals through intermediaries. Notably, OFAC imposed significant penalties, including a $215 million fine against a U.S. venture capital firm for indirect dealings with a sanctioned oligarch.

The advisory also identifies key red flags such as non-commercial transactions, transfers to close associates, opaque ownership structures, and continued involvement of sanctioned persons. OFAC reiterated that property linked to sham transactions remains blocked and warned financial institutions and businesses to apply enhanced due diligence.

The move underscores OFAC’s commitment to tightening enforcement and disrupting increasingly sophisticated sanctions evasion tactics.

U.S. Issues License Allowing Conditional Deals for Lukoil Subsidiary Sale Amid Russia Sanctions

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has issued General License 131D, authorizing limited transactions related to the potential sale of Lukoil International GmbH (LIG), a subsidiary of Russia’s Lukoil, under strict conditions. The license permits activities necessary for negotiating and entering contingent contracts for the sale or transfer of LIG and its majority-owned entities until May 1, 2026.

These contracts must remain contingent on receiving separate OFAC authorization before execution, ensuring that no actual transfer of ownership or benefits occurs without regulatory approval. Additionally, the license allows transactions required for the maintenance or wind-down of LIG-related operations during the same period.

However, authorization comes with key restrictions. It does not permit the unblocking of sanctioned assets beyond specified allowances, nor does it authorize dealings with other blocked persons under Russia-related sanctions. Transfers of funds into Russia remain strictly prohibited.

The updated license replaces the previous General License 131C and reflects OFAC’s calibrated approach to sanctions enforcement—allowing controlled divestment and operational wind-downs while maintaining broader financial restrictions on Russian entities.

The move signals continued pressure on Russian-linked assets while providing a structured pathway for foreign businesses to disengage from sanctioned entities in compliance with U.S. regulations.

EU Extends Iran Human Rights Sanctions Regime Until April 2027

The European Union has extended its sanctions regime targeting serious human rights violations in Iran until 13 April 2027, reaffirming its continued pressure on Iranian authorities. The restrictive measures include asset freezes, travel bans on listed individuals and entities, and prohibitions on exporting equipment that could be used for internal repression or telecommunications monitoring. EU people and companies are also barred from making funds available to those sanctioned.

Following the latest review, the EU removed one deceased individual from the list, bringing the total to 262 individuals and 53 entities currently subject to sanctions.

Originally introduced in 2011, the sanctions regime has been renewed annually and significantly expanded since 2022 amid rising concerns over human rights conditions in Iran. The measures have intensified in response to reports of violence, arbitrary detention, and intimidation by security forces against protesters.

In January 2026, the EU’s foreign policy chief publicly condemned these actions, calling for the immediate release of individuals detained for exercising fundamental rights. The EU also urged Iran to uphold international obligations, including protecting freedoms of expression, association, and peaceful assembly, and restoring full internet access.

The extension reflects the EU’s continued commitment to supporting the Iranian people’s aspirations for fundamental rights and freedoms while maintaining diplomatic pressure on the government.

EU Extends Bosnia and Herzegovina Sanctions Framework Until March 2027

The European Union has extended its framework for restrictive measures related to Bosnia and Herzegovina for an additional year, now valid until 31 March 2027. The decision ensures that the EU retains the authority to impose targeted sanctions on individuals or entities that threaten the country’s sovereignty, territorial integrity, constitutional order, or international standing.

The framework also allows for measures against those undermining the Dayton/Paris Peace Agreement or posing serious risks to the country’s security environment. Available sanctions include asset freezes, travel bans to the EU, and prohibitions on making funds available to designated people or entities.

At present, no individuals or organizations are listed under this sanction’s regime. However, the EU emphasized that it continues to closely monitor developments in Bosnia and Herzegovina and stands ready to deploy these measures if the situation deteriorates.

The extension highlights the EU’s preventive and flexible approach, maintaining a legal mechanism to respond swiftly to potential instability while refraining from immediate designations.

The Council reaffirmed its strong commitment to Bosnia and Herzegovina’s European future, supporting its status as a unified, sovereign state and encouraging continued political stability and adherence to peace agreements.

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Sanctions Watch is a weekly recap of events and news related to sanctions around the world.