Sanctions Watch | Weekly Vol. 142

Sanctions Watch Vol 142

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

1. OFAC Issues General License 131C Allowing Negotiation and Wind-Down of Lukoil International GmbH Sale Through April 2026

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued General License No. 131C under the Russian Harmful Foreign Activities Sanctions Regulations (31 CFR part 587), authorizing specific transactions related to the potential sale of Lukoil International GmbH (LIG). Effective February 26, 2026, the new license replaces and supersedes General License 131B in its entirety.

Under this authorization, U.S. persons may engage in transactions ordinarily incident and necessary to negotiate and enter into contingent contracts with Public Joint-Stock Company Oil Company Lukoil or its affiliates for the sale or transfer of LIG or its majority-owned entities. These activities are permitted through 12:01 a.m. EDT on April 1, 2026, provided that contract performance remains contingent upon separate OFAC approval.

Additionally, the license authorizes transactions necessary for the maintenance or wind-down of LIG Entities’ operations during the same period. Blocked accounts of LIG Entities may be used for such authorized wind-down activities.

However, the license does not permit the unblocking of property beyond specified allowances, transactions involving other blocked persons, or transfers of funds to accounts located in the Russian Federation.

2. UK Issues Time-Limited General Licence to Facilitate Orderly Wind-Down of Maritime Mutual Reinsurance Contracts

The UK’s Office of Financial Sanctions Implementation (OFSI), under HM Treasury, has issued General Licence INT/2026/8893924 to support the orderly wind-down of specific insurance and reinsurance arrangements involving Maritime Mutual entities. Effective from 24 February 2026 until 23:59 on 9 April 2026, the licence provides a temporary exemption from certain prohibitions under Regulations 11 to 15 of the Russia (Sanctions) (EU Exit) Regulations 2019.

The licence permits UK Insurers, UK Insurance Brokers, Relevant UK Institutions, and other non-designated persons to receive, process, and transmit funds or economic resources to or from Maritime Mutual Association Limited (Gibraltar), Maritime Mutual Insurance Association (NZ) Limited, and their subsidiaries. These activities are allowed only where they relate to insurance or reinsurance contracts agreed in writing before 24 February 2026, including actions necessary to cancel, terminate, or otherwise wind down such contracts.

Relevant UK financial institutions are also authorised to process associated payments, provided all actions remain within the scope of the licence. Strict record-keeping requirements apply, mandating that accurate records be maintained for a minimum of six years.

This targeted and time-bound measure ensures contractual certainty and financial stability while maintaining the integrity of the UK’s Russia sanctions framework.

3. UK Issues Time-Limited Wind-Down Licence for PJSC Transneft Under Russia Sanctions Regime

The UK Office of Financial Sanctions Implementation (OFSI), under HM Treasury, has issued General Licence INT/2026/8889196 permitting the temporary wind-down of transactions involving PJSC Transneft and its subsidiaries. Granted under Regulation 64 of the Russia (Sanctions) (EU Exit) Regulations 2019, the licence allows individuals and eligible institutions to undertake activities that would otherwise be restricted under Regulations 11 to 15, strictly for the purpose of divesting from or closing out existing positions linked to Transneft.

The licence applies to PJSC Transneft and any entity owned or controlled by it, directly or indirectly. It authorizes “Persons” (excluding designated persons), the designated person (DP), and “Relevant UK Institutions” — including regulated financial services firms, payment institutions, electronic money institutions, clearing houses, central counterparties, CSDs, and recognised payment system operators — to carry out actions reasonably necessary to facilitate an orderly wind-down.

Entities relying on the licence must maintain accurate and complete records of all permitted activities for a minimum of six years. The permissions do not authorize any breach beyond the scope expressly permitted. The licence came into effect on 24 February 2026 and will expire at 23:59 on 9 April 2026, unless varied, revoked, or suspended earlier by HM Treasury.

4. EU Strengthens Terror Sanctions Regime, Expands Scope of EU Terrorist List

The Council of the European Union announced significant enhancements to its sanctions framework aimed at combating terrorism. The updated measures expand the criteria for inclusion on the EU Terrorist List, enabling the EU to target leading members of already-listed groups and entities who play key roles in planning, facilitating, preparing, or carrying out terrorist acts. The new rules also allow sanctions against individuals, groups, and entities associated with terrorist activities, including those involved in financing, recruitment, or training.

In a major development, the Council introduced a travel ban for listed individuals, complementing existing measures such as asset freezes and the prohibition on EU operators making funds or economic resources available to sanctioned persons and entities.

Following its periodic review, the Council decided to maintain all existing listings under the EU Terrorist List, keeping current sanctions in place. The EU reaffirmed that terrorism and violent extremism continue to pose serious threats to the security of the Union and its member states.

The updated regime is distinct from other EU sanctions frameworks, including those targeting Al-Qaida, ISIL/Da’esh, Hamas, and the Palestinian Islamic Jihad.

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