Sanctions Watch | Weekly Vol. 98

Sanctions Watch Vol 98

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

1. UK Amends Syria Sanctions to Support Reconstruction and Stability

UK government announced significant amendments to its Syria sanctions regulations to support the Syrian people in rebuilding their country and economy after the fall of the Assad regime. Spearheaded by Hamish Falconer MP and the Foreign, Commonwealth & Development Office, these updates mark a strategic shift aimed at facilitating Syria’s transition toward stability and prosperity. The changes include lifting sanctions on 12 entities, such as the Syrian Ministry of Defense, Ministry of Interior, and key media companies. This move follows a similar decision in March, where asset freezes on 24 entities, including the Central Bank of Syria and Syrian Arab Airlines, were lifted.

The regulatory amendments will ease UK restrictions on critical sectors like financial services and energy production, thereby encouraging foreign investment and aiding the restoration of Syria’s energy infrastructure. While these revisions provide scope for economic revitalization, the UK reaffirms its commitment to holding Assad and his associates accountable for past human rights violations. Sanctions will remain in place against individuals tied to the former regime and those involved in the illegal captagon trade.

This policy shift aligns with the UK government’s broader Plan for Change, which prioritizes regional stability and national security. The UK pledges to continue its humanitarian support, including a £160 million commitment in 2025, and maintains its stance on pushing for an inclusive political transition in Syria. The goal is to ensure lasting peace, human rights protection, and effective governance, while keeping the option open for reimposing sanctions if necessary.

2. UK Introduces New Software Sanctions Under Russia Regulations to Curb Sectoral Technology Transfers

The UK government introduced a significant update to the Russia (Sanctions) (EU Exit) Regulations 2019 by incorporating Chapter 4N and Schedule 3IA through the Russia (Sanctions) (EU Exit) (Amendment) Regulations 2025. This amendment targets sectoral software and technology transfers in an effort to increase economic pressure on the Russian government and curtail its ability to fund its war efforts in Ukraine.

The new measures prohibit UK individuals, entities, and overseas UK persons from directly or indirectly transferring, making available, or providing sectoral software and related services to persons connected with Russia or for use in Russia. This includes intangible methods such as cloud-based services, SaaS, and app-based software access.

Entities must assess whether their software falls within the defined scope in Schedule 3IA, identify if recipients are “connected with” Russia, and determine if any exceptions or valid licences apply. While certain licences may allow transfers under specific conditions, others require renewal with updated scope to cover software services explicitly.

Exceptions apply to software in the public domain and basic scientific research. Compliance measures are advised, including the insertion of “no-Russia clauses” in contracts, enhanced due diligence on software recipients, and internal assessments of existing partnerships.

Licensing responsibilities are shared among three DBT bodies, and suspected breaches must be reported to HMRC or OTSI, depending on the nature of the transfer. This amendment represents the UK’s strengthened approach to targeting Russian economic resilience via advanced technology and software restrictions.

3. UK Treasury Issues General Licence Allowing Insolvency-Related Transactions for GTLK Companies and Their Subsidiaries

The UK Treasury’s Office of Financial Sanctions Implementation (OFSI) issued a General Licence under Regulation 64 of The Russia (Sanctions) (EU Exit) Regulations 2019. This licence authorizes specific payments and activities associated with insolvency proceedings involving GTLK Europe DAC and GTLK Capital DAC—Irish-incorporated entities collectively referred to as “GTLK Companies”—as well as their worldwide subsidiaries. These companies were previously sanctioned due to their connections with the Russian state.

The licence exempts from sanctions certain actions that would typically be restricted under Regulations 11 to 17A and 18C. It allows insolvency practitioners, the GTLK Companies, their subsidiaries, and other involved persons to make, receive, or process payments necessary for insolvency procedures. However, the exemption strictly prohibits the transfer of funds to other sanctioned entities or persons under the Russia Regulations.

Additionally, relevant financial institutions are permitted to process these transactions. Notification to HM Treasury is mandatory within 14 days of any permitted payment, and all parties involved are required to maintain detailed records for at least six years.

This General Licence, effective from 1 August 2023, remains valid until 31 July 2030 unless amended, revoked, or suspended earlier. The scope of the licence includes an extensive list of GTLK subsidiaries across jurisdictions including Ireland, Bermuda, Lithuania, Malta, Switzerland, and the UAE.

This regulatory move aims to facilitate legitimate insolvency processes while ensuring continued compliance with broader sanctions against Russia.

4. UK Updates Dual-Use Export Licence for Oil and Gas Sector Amid Tightened Compliance

The UK Secretary of State issued an updated version of the Open General Export Licence (OGEL) focused on dual-use items for oil and gas exploration. This licence authorizes UK-based exporters to send specific high-tech goods and technologies, detailed in Schedule 1, to a wide range of international destinations listed in Schedule 2 — including the USA, India, China (excluding SARs), and the UAE — as long as they are for construction or hydrographic survey purposes within the oil, gas, or renewable energy sectors. Key conditions include that the goods must remain under the exporter’s direct control, cannot be sold or left behind, and any equipment loss must be immediately reported to the Department for Business and Trade (DBT).

The licence excludes exports intended for military use, especially if linked to weapons of mass destruction or destinations under arms embargoes. Compliance requirements include SPIRE registration, export return submissions, and adherence to record-keeping for at least three years. The licence also clarifies provisions for transferring goods between approved destinations without breaching export laws. The previous version dated 15 April 2025 is now revoked. Notably, the UK Continental Shelf has been re-included as a permitted export destination. Failure to comply could result in licence suspension or revocation, especially if exporters disregard warnings issued during compliance inspections. This update underscores the UK government’s effort to maintain strict control over sensitive exports while supporting global energy infrastructure projects.

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