Sanctions Watch | Weekly Vol. 157

Sanctions Watch Vol 157

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

U.S. Extends Sanctions Relief for Sakhalin-2, Securing Japan’s Energy Supply Through 2026

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued General License 55F, extending sanctions relief for activities related to Russia’s Sakhalin-2 energy project until December 18, 2026. The decision allows continued maritime transport of crude oil originating from the Sakhalin-2 project when the oil is destined exclusively for import into Japan, helping maintain energy security for one of America’s key allies in the Asia-Pacific region.

The license also authorizes certain transactions involving Gazprombank and entities it owns 50 percent or more, provided those transactions are connected to the Sakhalin-2 project. Additionally, petroleum-related services associated with the project remain permitted under the extended authorization period.

This extension is viewed as a positive development for global energy markets, as it reduces the risk of supply disruptions and supports stable energy flows to Japan. By ensuring continued access to Sakhalin-2 resources, the measure helps protect Japanese energy imports while balancing broader sanctions objectives against Russia.

The authorization does not remove all restrictions. Transactions prohibited under specific financial sanctions directives, including those involving correspondent banking restrictions or the Russian Central Bank, remain banned. General License 55F replaces and supersedes General License 55E and took effect on June 11, 2026.

EU Expands Hamas Sanctions Regime as Eight European Nations Align with New Restrictive Measures

The European Union has strengthened its sanctions framework targeting individuals and entities linked to Hamas and the Palestinian Islamic Jihad, reinforcing its commitment to countering terrorism and regional instability. On 28 May 2026, the Council of the European Union adopted Decision (CFSP) 2026/1173, expanding the scope of existing restrictive measures to include members of Hamas’s Political Bureau. The decision also adds ten individuals and entities to the sanctions list under Decision (CFSP) 2024/385.

In a significant show of international cooperation, eight European partner countries—Albania, Bosnia and Herzegovina, Iceland, Moldova, Montenegro, North Macedonia, Serbia, and Ukraine—have formally aligned themselves with the EU’s latest decision. By doing so, these countries have committed to ensuring that their national policies and measures conform to the updated sanctions regime.

The alignment demonstrates broad regional support for coordinated efforts to combat terrorism financing, facilitation, and support networks. It also highlights the continued cooperation between the European Union and its partner countries on foreign policy and security matters.

The EU welcomed the commitment made by these countries, emphasizing the importance of collective action in promoting international security, upholding the rule of law, and addressing threats posed by organizations involved in violent and destabilizing activities across the region and beyond.

U.S. Expands Venezuela Oil Trade Authorization, Opening New Opportunities for Energy Imports and Petrochemical Supply Chains

The U.S. Department of the Treasury has issued General License No. 46C under the Venezuela Sanctions Regulations (31 CFR Part 591), significantly expanding authorized activities involving Venezuelan-origin oil and petrochemical products. Effective 10 June 2026, the new license replaces General License 46B and allows established U.S. entities to engage in transactions necessary for the lifting, exportation, transportation, refining, marketing, purchase, and importation of Venezuelan-origin oil and petrochemical products into the United States.

The authorization covers a broad range of commercial activities, including shipping, logistics, marine insurance, port services, storage, and crude oil swap arrangements. Importantly, the license also includes fertilizer products and fertilizer precursor chemicals, potentially supporting agricultural supply chains and helping stabilize input costs for U.S. farmers.

To enhance transparency and legal certainty, contracts with the Venezuelan government or PdVSA-related entities must be governed by U.S. law and include dispute resolution mechanisms in approved international jurisdictions. The measure is expected to increase access to energy resources, strengthen supply chain resilience, and provide additional crude oil and petrochemical feedstock sources for U.S. markets.

While maintaining restrictions on transactions involving sanctioned countries, blocked vessels, and certain foreign-controlled entities, the license represents a positive step toward facilitating legitimate energy trade and improving market stability through regulated commercial engagement with Venezuela.

UK Issues General Licence to Support Russia Sanctions Enforcement and Asset Interdiction Operations

The UK Government has introduced General Licence INT/2026/9559192 under the Russia (Sanctions) (EU Exit) Regulations 2019, effective from 12 June 2026, to strengthen the enforcement of sanctions against designated Russian individuals and entities. The licence provides legal authorization for persons and organizations acting on behalf of, or under the direction of, His Majesty’s Government (HMG) to undertake activities necessary to facilitate sanctions-related interdiction operations.

The licence permits authorized people to take all necessary steps to support government actions conducted under legal powers granted by Regulations 57C and 57D. It also allows funds to be made available for the benefit of designated people when strictly required to enable enforcement or interdiction activities. Additionally, relevant UK financial institutions, payment service providers, electronic money institutions, clearing houses, and payment system operators are authorized to process transactions connected to these activities.

Importantly, the licence does not permit any action that would otherwise breach sanctions regulations beyond the specific exemptions provided. All parties relying on the licence must maintain accurate and complete records of activities undertaken for at least six years. The measure enhances the UK’s ability to investigate, disrupt, and enforce sanctions violations while ensuring that financial institutions and government-directed entities can support interdiction efforts within a clear legal framework.

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