Sanctions regimes continue to expand in scope and intensity, with enforcement and anti-circumvention firmly in focus. This edition highlights key EU and U.S. developments – from extended Russia measures and new listings to judicial and supervisory signals shaping sanctions compliance in 2026.
EU Extends Economic Sanctions Against Russia Until 31 July 2026
On 22 December 2025, the Council of the European Union renewed and extended the EU’s economic restrictive measures against the Russian Federation in response to its ongoing war of aggression in Ukraine, prolonging the sanctions regime for six months. These measures are part of a broader framework first introduced in 2014 and expanded following Russia’s full-scale invasion of Ukraine in 2022. The sanctions cover multiple sectors, including trade, finance, energy, technology, dual-use goods, industry, transport, and luxury products. They also include a ban on seaborne crude oil and specified petroleum products, restrictions on access to EU financial messaging systems (“de-SWIFTing”) for designated Russian banks, and the suspension of broadcasting activities and licences of certain Kremlin-linked outlets. The Council emphasised that sanctions will remain in force as long as Russia continues destabilising actions and violations of international law, with the possibility of additional measures if necessary.
Entities should update sanctions screening and transaction monitoring systems to reflect the extended measures through 31 July 2026, ensure trade, payment, investment, and asset-freeze controls fully incorporate sectoral restrictions, and reaffirm internal sanctions governance and escalation procedures to demonstrate ongoing compliance.
EU Adds Two Russian Officials to Human Rights Sanctions List
On 22 December 2025, the Council of the European Union expanded the EU Global Human Rights Sanctions Regime by designating Dmitry Sergeyevich Gordeev, a member of the Russian judiciary, and Lyudmila Balandina, a public prosecutor, for their involvement in serious human rights violations, including politically motivated prosecutions and actions undermining fundamental rights and the rule of law in Russia. As a result, all funds and economic resources belonging to or controlled by these individuals are frozen within the EU, and it is prohibited to make any funds or resources available to them, directly or indirectly.
Entities should update their EU sanctions screening lists to include the newly designated individuals and ensure that asset-freezing and transaction-blocking controls are applied immediately, in line with the relevant Council Implementing Regulations.
EU Expands Sanctions Targeting Hybrid Threats from Belarus and Russia
On 15 December 2025, the Council of the European Union extended restrictive measures in response to hybrid threats from Belarus and the Russian Federation. The sanctions target individuals and entities engaged in disinformation, cyber operations, and other destabilising activities that threaten EU security, democratic processes, and societal cohesion. For Russia, twelve individuals and two entities were designated, subject to an EU asset freeze and prohibitions on making funds or economic resources available to them. The Belarusian sanctions were broadened to cover hybrid activities directed against the EU, extending existing asset-freeze and transaction-prohibition obligations.
Entities should update sanctions screening and transaction monitoring systems to include the newly designated individuals and entities, promptly apply asset-freezing and transaction-blocking controls, and review internal escalation and reporting procedures to ensure timely notification of potential matches to competent authorities.
EU Extends Sanctions on Individuals Undermining Stability in the Democratic Republic of the Congo
On 8 December 2025, the Council of the European Union prolonged restrictive measures targeting individuals responsible for actions that threaten stability, security, or democratic processes in the Democratic Republic of the Congo (DRC) through 12 December 2026. These measures, initially introduced in response to human rights violations, attacks on civilians, and deteriorating security in the eastern provinces, continue to impose an EU-wide asset freeze and prohibit the provision of funds or economic resources by EU persons and entities. The Council highlighted that the extension underscores ongoing concern about the humanitarian and security situation in the DRC and the need for accountability for those contributing to instability.
Entities should update sanctions screening and transaction monitoring systems to reflect the extended listing period, ensure asset freeze and transaction prohibitions are applied consistently, and review internal escalation and reporting procedures to support timely notification of potential matches with the extended DRC sanctions listings.
EU Targets Russia’s Maritime “Shadow Fleet” with Sanctions
On 18 December 2025, the Council of the European Union adopted restrictive measures against Russia’s maritime “shadow fleet” in connection with its ongoing war in Ukraine, designating 41 vessels and their beneficial owners under the EU economic sanctions framework. The measures aim to prevent circumvention of existing sanctions, particularly those restricting Russia’s energy exports by sea. Designated vessels and their associated owners are subject to an EU asset freeze, and EU persons and entities are prohibited from providing funds, economic resources, or related services, including port access, insurance, and financing. The action closes loopholes used to obscure vessel ownership, flagging, or transactional history, reinforcing enforcement against sanctions evasion.
Entities should update sanctions screening and transaction monitoring systems to reflect the new listings, and assess trade finance, shipping, insurance, and correspondent banking controls to ensure prohibited services are not provided to the designated vessels or their operators.
EU Global Human Rights Sanctions Regime Extended Through 8 December 2026
On 4 December 2025, the Council of the European Union extended the EU Global Human Rights Sanctions Regime for one year, continuing to target individuals and entities responsible for serious human rights violations worldwide. Designated persons and entities remain subject to an EU asset freeze, and EU persons and entities are prohibited from providing funds or economic resources directly or indirectly. The decision underscores the EU’s commitment to accountability for human rights abuses, the rule of law, and protection of civil society and democratic opposition.
Entities should update sanctions screening and transaction monitoring systems to reflect the extended listings, maintain asset-freeze and transaction-blocking controls in line with the Council Implementing Regulations, and review internal escalation and reporting procedures to ensure ongoing compliance throughout the extended period.
OFAC Updates Sanctions Lists and Issues New General Licences
On 18 December 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued updates to the Specially Designated Nationals (SDN) and Foreign Sanctions Evaders (FSE) lists, including new designations under Iranian sanctions authorities and the International Criminal Court (ICC) programme, additions of maritime vessels and affiliated shipping companies, and the removal of certain Russia-related FSE listings. OFAC also issued new general licences, including ICC General License 11 for wind-down transactions, a Belarus licence for certain companies, and Iran-related General License S for limited offloading and safety transactions. Amended Russia-related FAQs (1224 and 1225) provide clarifications for sanctions compliance.
Entities should update sanctions screening databases and watchlists, ensure transaction monitoring systems capture newly designated vessels and entities, circulate and assess the amended Russia-related FAQs, and maintain compliance controls aligned with OFAC’s current designations and general licence provisions.
Latvian Court Upholds FIU Authority on EU Sanctions Compliance
On 18 December 2025, the Administrative Regional Court of Riga upheld the Financial Intelligence Unit of Latvia’s (FIU Latvia) assessment regarding the application of EU financial sanctions by a supervised financial institution. The court confirmed that the FIU’s interpretation of asset freeze, transaction prohibition, and reporting obligations under EU sanctions law was consistent with applicable law and within its supervisory remit. By rejecting the institution’s challenge, the judgment reinforces the FIU’s authority to enforce sanctions compliance. It signals that EU sanctions interpretations by competent authorities are likely to be upheld by Latvian courts.
Financial institutions should review and, if necessary, strengthen sanctions compliance frameworks to ensure alignment with EU-level interpretations, and validate that internal controls for asset freezes, transaction interdiction, and reporting are robust, documented, and demonstrably compliant with statutory obligations.
FIU Latvia Highlights the Strategic Impact of Sanctions on Russia
On 30 December 2025, FIU Latvia published an analytical article titled “The cost of war: how sanctions are reshaping Russia’s future,” assessing the evolving role and impact of sanctions imposed in response to Russia’s military aggression in Ukraine. The piece emphasises that sanctions function as a long-term strategic tool rather than a short-term measure, with effectiveness dependent on international unity, consistent enforcement, and visible accountability. FIU Latvia notes that sanctions have significantly constrained Russia’s economic capabilities, including an estimated €100 billion in foregone energy revenues, and that centralised, coordinated enforcement regimes enhance compliance and deterrence. The article also highlights the importance of harmonising sanctions across jurisdictions and targeting intermediaries and entities involved in circumvention. While sanctions alone cannot resolve the conflict, sustained, consistently applied measures are essential to limit Russia’s economic base and support international security objectives.
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