Sanctions Watch | Weekly Vol. 150

Sanctions Watch Vol 150

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

OFAC Issues Temporary Wind-Down Authorization for Hengli Petrochemical Transactions Until May 24, 2026

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued General License V under Executive Order 13902, providing temporary relief for transactions involving Hengli Petrochemical (Dalian) Refinery Co., Ltd. The license authorizes U.S. persons and entities to engage in activities that are ordinarily incident and necessary to wind down existing transactions with Hengli Petrochemical and its majority-owned subsidiaries. This authorization remains valid until 12:01 a.m. EDT on May 24, 2026.

The measure is designed to facilitate an orderly disengagement from business relationships impacted by sanctions, minimizing disruption for stakeholders. However, the license imposes strict conditions: any payments involving blocked persons must be deposited into blocked, interest-bearing accounts within the United States. Additionally, the authorization is limited in scope and does not permit new business or transactions with other sanctioned parties under the same executive order unless separately approved.

This development offers a compliance window for companies to exit affected dealings responsibly while adhering to U.S. sanctions regulations. Issued on April 24, 2026, and signed by OFAC Director Bradley T. Smith, the license reflects a structured approach to sanctions enforcement, balancing regulatory objectives with practical business considerations.

UK Treasury Issues New Legal Services Licence Allowing Sanctioned Entities Limited Access to Legal Representation

The UK’s Office of Financial Sanctions Implementation (OFSI), under HM Treasury, has introduced a new General Licence enabling sanctioned individuals and entities to access legal services under strict financial and regulatory conditions. Effective from 29 April 2026 to 28 October 2026, the licence permits payments for legal advice, representation, and associated expenses without breaching UK Autonomous Sanctions Regulations, provided compliance requirements are met.

The licence establishes clear financial caps, including a total limit of £4 million per law firm for legal and counsel fees and additional restrictions on expenses. It distinguishes between services based on prior obligations (Part A) and new engagements (Part B), each with defined payment limits, hourly rate ceilings, and reporting obligations. Payments must be routed through regulated financial institutions, ensuring transparency and oversight.

Importantly, the licence does not allow funds or economic resources to be made available to sanctioned persons beyond what is strictly necessary for legal services. It also mandates detailed reporting to HM Treasury within 14 days of payment and requires record-keeping for at least six years.

This move reflects the UK government’s effort to balance enforcement of sanctions with the fundamental right to legal representation.Top of FormBottom of Form

EU Tightens Pressure with 20th Sanctions Package Against Russia

The European Union has adopted its 20th sanctions package against Russia, reinforcing its commitment to Ukraine’s sovereignty and intensifying pressure on Moscow to negotiate peace. The new measures focus heavily on closing loopholes and preventing sanction circumvention, particularly targeting Russia’s energy, financial, and military-industrial sectors. A major highlight is the expansion of restrictions on Russia’s “shadow fleet,” with additional vessels and entities banned from EU ports and services, aiming to curb oil revenue that funds the war.

Financial sanctions have been broadened to include more Russian banks and crypto-related activities, limiting Russia’s access to global financial systems. Trade restrictions have also been strengthened, with new export bans on goods and technologies that could support Russia’s military capabilities, alongside import bans on key materials.

The package introduces the EU’s anti-circumvention tool for the first time, targeting third countries facilitating sanctions evasion. Additional listings of individuals and entities, including oligarchs and military suppliers, further tighten enforcement.

Overall, the sanctions aim to weaken Russia’s war economy while protecting EU businesses and ensuring stronger compliance globally.

Canada Releases Comprehensive Sanctions Guidance for Aerospace and Defense Sector

Canada has issued new sanctions and export control guidance aimed at strengthening compliance within its aerospace and defense industries. The guidance outlines key due diligence measures companies should follow, including identifying and addressing potential red flags, assessing whether transactions or items fall under sanctions restrictions, and implementing effective risk management practices. It is designed to help organizations better understand their legal obligations and navigate complex regulatory requirements. By providing practical compliance steps, the initiative seeks to enhance transparency, reduce the risk of violations, and ensure that firms operate in alignment with Canada’s evolving sanctions framework and national security priorities.

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