Sanctions Watch | Weekly Vol. 101

Sanctions Watch Vol 101

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

1. OFAC Issued General license which authorizes Petroleum Services for Key Caspian Energy Projects Amid Sanctions

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License No. 124, providing targeted relief under the Russian Harmful Foreign Activities Sanctions Regulations (31 CFR part 587). The license authorizes specific petroleum service transactions that would otherwise be prohibited under the January 10, 2025 determination related to Executive Order 14071, titled “Prohibition on Petroleum Services.” This new authorization specifically applies to activities associated with the Caspian Pipeline Consortium (CPC) and Tengizchevroil projects.

While the license offers a strategic exception to support critical energy infrastructure, it does not extend to any other dealings that involve blocked persons or entities under the RuHSR, unless separately authorized. This move reflects a calibrated approach by the U.S. government to uphold sanctions pressure on Russia while maintaining global energy stability by safeguarding important non-Russian energy assets and partnerships. It is seen as a positive step in supporting allied energy interests and minimizing disruptions to petroleum supply chains.

2. U.S. Sanctions Iranian Oil Smuggling Network Fueling Military and Terrorist Operations

The U.S. Department of State announced sanctions against an expansive international oil smuggling network responsible for shipping millions of barrels of Iranian crude oil, primarily to China. This network operates on behalf of Iran’s Armed Forces General Staff (AFGS) and its front company, Sepehr Energy Jahan Nama Pars (Sepehr Energy), generating billions in revenue. The proceeds from these illicit oil sales are funneled into Iran’s weapons programs—including ballistic missile and unmanned aerial vehicle (UAV) development—as well as nuclear proliferation and support for terrorist organizations.

The sanctioned network’s activities have directly funded destabilizing actions across the Middle East, notably supporting the Houthis in Yemen who are responsible for attacks on Red Sea shipping lanes, U.S. naval forces, and Israeli targets. This move forms part of the broader U.S. strategy under National Security Presidential Memorandum 2, aimed at applying “maximum pressure” on the Iranian regime by curbing its access to financial resources.

Invoking Executive Order 13224 (as amended by E.O. 13886), this measure underscores the U.S. commitment to counterterrorism and regional stability. The Department of the Treasury has issued further details, reiterating the U.S. stance on holding Iran accountable for its malign activities.

3. U.S. and Switzerland Forge Stronger Ties to Combat Global Sanctions Evasion with Historic MOU

The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Swiss State Secretariat for Economic Affairs (SECO) have formalized their cooperation through a new Memorandum of Understanding (MOU). This agreement underscores both nations’ shared commitment to enhancing the monitoring, enforcement, and compliance of economic and trade sanctions targeting global threats such as terrorism, narcotics trafficking, human rights violations, and weapons proliferation.

The MOU sets forth a structured framework for secure and lawful information sharing between OFAC and SECO. Both parties recognize the importance of protecting sensitive data under their respective privacy and trade secret laws. Key provisions include the designation of coordinators, strict access controls, safeguarding protocols, and consent-based third-party disclosures. Notably, this administrative arrangement is non-binding but is rooted in mutual trust and regulatory alignment.

By uniting the enforcement capabilities of two of the world’s most influential financial jurisdictions, the agreement aims to prevent sanctions evasion, foster compliance among global businesses, and reinforce collective national security. This partnership marks a landmark advancement in the international effort to protect the integrity of global financial systems from malign actors and illicit flows.

4. EU Imposes Sweeping 17th Sanctions Package on Russia, Targeting Shadow Fleet and Military Supply Chains

The European Union adopted its 17th sanctions package against Russia, marking the most expansive set of measures since the onset of the war in Ukraine. This package aims to cut off Russia’s access to critical military technologies and reduce its energy revenues, which are being used to fund its aggression. A central focus is Russia’s “shadow fleet” of oil tankers — 189 additional vessels have been sanctioned, bringing the total to 342. These vessels, often using deceptive shipping practices, are instrumental in circumventing oil sanctions. 

The sanctions extend to companies and individuals across the UAE, Türkiye, Hong Kong, and China that support Russia’s military-industrial complex, including entities supplying drones, weapons, machine tools, and critical components. Surgutneftegaz, a major Russian oil producer, and a key insurer of oil shipments have also been blacklisted. New export restrictions have been introduced on dual-use goods and technologies, including UAVs and chemical precursors. Additionally, sanctions now target those responsible for looting cultural heritage in Crimea and exploiting Ukrainian agricultural resources. With 75 new listings, EU sanctions now apply to over 2,400 individuals and entities. The measures reflect the EU’s unwavering support for Ukraine and its commitment to uphold international law and sovereignty.

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