RegRally Insights: Sanctions Essentials

ECOVIS welcomes you to our 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.

EU adopts 18th sanctions package against Russia

On 18 July 2025, the Council of the EU approved its 18th package of sanctions against Russia, one of the most extensive to date, targeting the energy sector, financial institutions, military supply chains, and circumvention networks via third countries. The measures took effect 19 July 2025.

Key findings:

Energy: Crude oil price cap cut from USD 60 to USD 47.60 per barrel, with a new dynamic adjustment mechanism; import ban on petroleum products refined from Russian crude, even if processed in third countries; ban on transactions involving Nord Stream 1 & 2
Finance: 22 more Russian banks face complete transaction bans (45 total); restrictions extend to foreign financial institutions and crypto-asset service providers aiding sanctions evasion, including via Russia’s SPFS messaging system.
Tech & exports: Expanded financial software/infrastructure ban critical to Russia’s banking sector (wind-down until 30 Sept 2025); stricter anti-circumvention rules with new export controls on dual-use/military-grade goods and a catch-all clause for sensitive technologies.
Maritime: 105 more vessels designated for shadow fleet oil evasion (444 total).

UK OFSI issues first crypto sector threat assessment

The UK Office of Financial Sanctions Implementation (OFSI) released its first dedicated crypto-assets threat assessment (Jan 2022–May 2025), finding the sector materially exposed to sanctions evasion risks and underperforming in detection and reporting.

Key findings:

High-risk factors: The use of anonymity tools, complex transaction layering, and cross-jurisdictional activity heighten exposure to sanctioned actors, notably those linked to Russia, North Korea, and Iran.
Compliance gaps: Many firms fail to identify ultimate beneficiaries or trace transactions beyond superficial blockchain history.
Underreporting: Significant shortfall in reporting frozen assets or breaches under Regulation 70 of The Russia (Sanctions) (EU Exit) Regulations 2019.
Regulatory stance: Crypto-asset firms have the same obligations as traditional financial institutions, including asset freezing, reporting, and risk-based due diligence.
Expectations: Firms should deploy advanced monitoring and blockchain analytics to detect indirect exposure and new evasion typologies.

EU sanctions nine individuals and six entities over Russian hybrid operations

Under the October 2024 hybrid threats framework, the Council of the European Union imposed restrictive measures against nine individuals and six entities linked to Russia’s hybrid operations targeting the EU and Ukraine. Targets include the Russian Television and Radio Broadcasting Network, senior officials replacing Ukrainian broadcasts with Kremlin content in occupied territories, the 841st Separate Electronic Warfare Centre for GNSS signal interference, and propaganda organisations tied to Yevgeny Prigozhin and Aleksandr Dugin. Measures cover asset freezes, travel bans, and denying access to EU financial and economic resources.

Our Recommendations:

Update client databases and monitoring systems with the newly sanctioned individuals and entities and the broader hybrid threats sanctions list.
Freeze any EU-held assets linked to designated parties and block related transactions.
Apply enhanced screening to clients in media, IT, cybersecurity, or logistics sectors with potential ties to hybrid threat activity.
File suspicious transaction reports if funds or services involve sanctioned persons or entities.

EU extends Russia sectoral sanctions; eight countries align policies

The EU Council adopted Decision (CFSP) 2025/1320, extending sectoral restrictive measures against Russia’s destabilising actions in Ukraine until 31 January 2026. In a statement on 14 July 2025, the High Representative confirmed that Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Montenegro, North Macedonia, Norway, and Ukraine will align national policies with the decision. The EU welcomed this alignment as strengthening sanctions coherence and effectiveness across jurisdictions.

Our Recommendations:

Conduct enhanced due diligence on clients and transactions involving entities in newly aligned countries, focusing on potential Russian beneficial ownership or control.
Review cross-border payment flows and correspondent banking arrangements for circumvention risks tied to partially aligned or inconsistently enforced regimes.

EU renews Terrorist List, adds 13 individuals and 22 groups

The Council of the European Union renewed the EU Terrorist List under Common Position 2001/931/CFSP, now comprising 13 individuals and 22 groups or entities designated for involvement in terrorist acts. Those listed face asset freezes and a prohibition on EU persons or entities providing them with funds or economic resources.

This autonomous EU framework remains separate from sanctions under UN Security Council Resolutions targeting ISIL/Da’esh and Al-Qaida, as well as from the January 2024 EU sanctions on individuals linked to Hamas and Palestinian Islamic Jihad. The renewal reinforces the EU’s commitment to targeted financial restrictions as a counter-terrorism tool.

Our Recommendations:

Ensure all client databases, transactions, and counterparties are screened against the updated EU Terrorist List.
Integrate the revised list into sanctions screening tools and harmonise with EU, UN, and other autonomous regimes.
Conduct enhanced due diligence on customers or transactions linked to jurisdictions or activities associated with terrorism financing.
Reassess relationships in sectors vulnerable to terrorism financing, such as cash-intensive businesses and informal remittance channels.

U.S. issues ICC sanctions rule, updates SDN list, and shifts Syria sanctions regime

The U.S. Department of the Treasury’s OFAC finalised the International Criminal Court (ICC) Sanctions Regulations under 31 CFR Part 528, implementing Executive Orders from February and May 2025 and formalising measures targeting certain ICC-related activities. On the same day, OFAC updated the Specially Designated Nationals (SDN) List, adding entities such as Shanghai Winsun Imp & Exp Co Ltd, linked to broader sanctions efforts in cybersecurity, dual-use trade, or ICC accountability.

Also effective 1 July 2025, the U.S. ended its comprehensive sanctions on Syria, replacing them with the Promoting Accountability for Assad and Regional Stabilisation Sanctions (PAARSS) program, which maintains restrictions on the Assad regime, human rights violators, narcotics networks, and associated individuals.

Our Recommendations:

Update sanctions screening systems to capture newly listed entities, including Shanghai Winsun Imp & Exp Co Ltd.
Review exposure to trade or shipping counterparties potentially tied to recently sanctioned entities, mainly in ICC-related or dual-use sectors.
Adapt compliance processes for Syria, recognising the repeal of legacy sanctions while maintaining vigilance under PAARSS.