RegRally Insights: Sanctions Essentials

ECOVIS ProventusLaw welcomes to its monthly newsletter on Sanctions, which is dedicated to everyone who wants to understand the latest trends and developments, get tips from our experts, and deepen their knowledge.

Amendments to Financial Regulatory Directive on International Sanctions Now in Effect

Amendments to the Financial Regulatory Directive’s instructions on international sanctions came into force on 18 March 2025, following the Protocol’s conciliation.

Key Recommendations:

Review Revised Guidelines: Financial institutions must thoroughly review the updated instructions on international sanctions.
Update Policies: Internal policies and procedures should be adjusted to comply with the revised regulations.

EU Sanctions on Belarusian Regime: Measures Imposed on 25 Individuals and 7 Entities

On March 27, 2025, the EU imposed sanctions on 25 individuals and 7 entities tied to the Belarusian regime. This includes members of the Central Election Commission responsible for the 2025 presidential election, judges involved in politically motivated sentencing, and businesses supporting the Lukashenka regime, such as Ridotto LLC and Belorusskiye Loterei. These sanctions target actions that undermine democracy, human rights, and Belarus’s military cooperation with Russia in the Ukraine conflict.

Key Recommendations:

Update Systems: Ensure systems are updated to flag and prevent dealings with designated individuals and entities.
Investigate Relationships: Review existing relationships with parties linked to the sanctioned entities.
Monitor Transactions: Prevent transactions that may indirectly benefit the sanctioned parties.

EU Expands Sanctions on Belarus: Additional Countries Align with EU Measures

On March 19, 2025, the EU welcomed Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Montenegro, North Macedonia, Norway, and Ukraine for aligning their policies with the EU’s restrictive measures against Belarus due to its role in Russia’s aggression against Ukraine. The EU has renewed and amended Decision (CFSP) 2025/385 to extend the sanctions until February 2026.

Key Recommendations:

Align Compliance Policies: Ensure internal compliance policies are aligned with these sanctions.
Scrutinise Transactions: Monitor transactions involving entities and individuals associated with Belarus.
Report Suspicious Activities: Report suspicious transactions or associations with the sanctioned entities.

EU Expands Sanctions on Turkey

On March 21, 2025, the EU welcomed Albania, Armenia, Bosnia and Herzegovina, Iceland, Montenegro, North Macedonia, and Serbia for aligning with the EU’s restrictive measures regarding Turkey’s unauthorized drilling activities in the Eastern Mediterranean. The Council Decision (CFSP) 2025/484 was adopted, which also removed one individual from the sanctions list.

Key Recommendations:

Ensure Compliance: Screen transactions and relationships in line with the updated sanctions list.
Report Suspicious Transactions: Report any transactions related to sanctioned individuals or entities.
Update Internal Policies: Review and adjust internal policies to align with the latest sanctions and third countries’ commitments.

UK Imposes Sanctions on RED BOX ENERGY SERVICES PTE LTD for Support to Russian Government

On March 20, 2025, the UK updated its sanctions under Russia (Sanctions) (EU Exit) Regulations, adding RED BOX ENERGY SERVICES PTE LTD (Group ID: 16511) to the list. The company, which supports the Russian government by providing goods and technology in the energy sector, is now subject to asset freeze and trust services sanctions.

Key Recommendations:

Identify and Freeze Accounts: Immediately freeze accounts linked to RED BOX ENERGY SERVICES PTE LTD.
Strengthen Internal Controls: Enhance internal controls and risk assessment frameworks to ensure compliance with sanctions laws.
Review Asset Management Procedures: Review and improve internal procedures for managing restricted assets.

UK Sanctions Enforcement: £465,000 Fine for Herbert Smith Freehills CIS LLP Moscow

On March 20, 2025, the Office of Financial Sanctions Implementation (OFSI) imposed a £465,000 fine on Herbert Smith Freehills CIS LLP Moscow (HSF) for breaching UK financial sanctions. The firm unlawfully processed six payments, totaling nearly £4 million, to Alfa-Bank, Sberbank, and a subsidiary of Sovcombank between May 25–31, 2022.

Breach Details:

Inadequate due diligence and sanctions screening failed to detect restricted entities.
Operational errors occurred due to the hasty closure of HSF’s Moscow offices, contributing to compliance lapses.

OFSI Annual Review 2023-2024: Key Insights and Enforcement Actions

On March 21, 2025, the Office of Financial Sanctions Implementation (OFSI) published its Annual Review for 2023-2024, highlighting its efforts to improve compliance, engagement, and enforcement of financial sanctions.

Key Highlights:

Record number of investigations: 396 cases were recorded, with 242 closed.
Breach findings: 20 cases (8.2%) involved sanctions breaches.
Recent enforcement actions, including cases against International Concierge Services Limited and Herbert Smith Freehills Moscow, were related to Russia’s invasion of Ukraine.
Future enforcement: OFSI anticipates more enforcement actions in 2025.

US Treasury Updates SDN List with New Counter-Terrorism Sanctions

On March 28, 2025, the U.S. Department of the Treasury updated the Specially Designated Nationals (SDN) List, adding new individuals under counter-terrorism sanctions. These individuals are now subject to primary and secondary sanctions administered by the Office of Foreign Assets Control (OFAC).

For more details, refer to OFAC Recent Actions.

US Targets Iran’s Petroleum and Petrochemical Sectors with New Sanctions

On March 13, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed new sanctions on individuals and entities involved in Iran’s petroleum and petrochemical sectors. These designations aim to block Iran’s access to oil revenues, which fund destabilizing activities.

Key Designations:

Mohsen Paknejad: Iranian national involved in the petroleum industry.
Aren Ship Management: Bangladesh-based shipping company facilitating Iranian petroleum transport.
Celestite Maritime Inc: Marshall Islands-registered company managing vessels transporting Iranian oil.
Fallon Shipping Company Limited: Seychelles-based company linked to Iranian petroleum shipments.
Hong Kong Heshun Transportation Trading Limited: Hong Kong firm trades and ships Iranian petrochemical products.
Huaxia Trading Ltd: China-based company facilitating the sale of Iranian petroleum.
Itaugua Services Inc: Liberia-registered entity supporting Iran’s oil sector.
Lake View Ship Management Private Limited: India-based shipping management company transporting Iranian petroleum.