Sanctions Watch | Weekly Vol. 162

Sanctions Watch Vol 162

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

OFAC Issues General License Z to Permit Limited Wind-Down and Safety Activities for Newly Sanctioned Iran-Linked Vessels

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued General License Z under Executive Order 13902, authorizing certain limited transactions involving persons and vessels blocked on July 14, 2026. The license permits activities through September 12, 2026, including the wind-down of existing financial transactions, safe docking and departure from non-Iranian and non-Russian ports, emergency vessel repairs, crew safety measures, environmental protection activities, and the delivery and offloading of cargo loaded on or before July 14, 2026. Payments to blocked persons must be made into blocked interest-bearing accounts in the United States. The authorization does not permit new commercial contracts or any transactions otherwise prohibited under U.S. sanctions regulations. The annex lists multiple sanctioned shipping companies and vessels, including Sea Lead Shipping PTE. Ltd., Aare Lines Inc., and vessels such as NADIA, PAYA LEBAR, and SHENTON WAY.

OFSI Updates General Licence Allowing Arbitration Cost Payments Involving Russia- and Belarus-Sanctioned Parties

The UK Office of Financial Sanctions Implementation (OFSI) has amended General Licence INT/2025/5787748 to continue permitting payments related to arbitration proceedings involving individuals or entities designated under the UK Russia and Belarus sanctions regimes. The licence authorizes payments to arbitrators, arbitration associations, legal representatives, and designated persons’ representatives for arbitration costs, while allowing relevant financial institutions to process these transactions. Payments are capped at £500,000 (including VAT) per arbitration, must be made directly to qualifying accounts, and are subject to detailed reporting and six-year record-keeping requirements. The licence, originally effective from 28 March 2025, was amended on 16 July 2026, and does not authorize any activity that would otherwise breach UK sanctions regulations.

OFAC Clarifies Sanctions Exposure for Non-U.S. Persons Winding Down Dealings with Cuban State Firms

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued FAQ 1262, clarifying that the U.S. government does not intend to impose sanctions under Executive Order 14404 on non-U.S. persons, including foreign financial institutions (FFIs), for transactions that are ordinarily incident and necessary to the wind down of dealings with the newly designated Cuban entities Grupo Empresarial del Comercio Exterior (GECOMEX) and Grupo Empresarial de Transporte Marítimo Portuario (GEMAR) through August 12, 2026. OFAC cautioned, however, that transferring assets back to these entities or their majority-owned subsidiaries, or moving such assets to another jurisdiction, may expose non-U.S. persons to significant sanctions risk. U.S. persons remain prohibited from engaging in transactions involving GECOMEX or GEMAR unless specifically authorized under the Cuban Assets Control Regulations (CACR) or applicable OFAC general licenses, including General License 1 for certain humanitarian-related activities. Non-U.S. parties unable to complete wind-down activities by the deadline are encouraged to contact the OFAC Compliance Hotline.

OFAC Clarifies Payment Rules Under Venezuela Earthquake Relief General License 60

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued FAQ 1263, clarifying that payments made to the Government of Venezuela under General License (GL) 60 for earthquake relief efforts are not required to be deposited into the Foreign Government Deposit Funds Account (FGDF). GL 60 authorizes transactions related to humanitarian earthquake relief, including the payment of taxes, tolls, and government fees connected with such activities. OFAC emphasized that this exception applies only to transactions authorized under GL 60. Payment requirements under other Venezuela-related general licenses—including GLs 46C, 48B, 49A, 50B, 51B, 52A, and 54A—remain unchanged, and payments authorized under those licenses must continue to be made into the FGDF. OFAC also warned that transactions outside the scope of GL 60 cannot be reclassified as earthquake relief to avoid the FGDF payment requirement.

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