The Sanctions Update, compiled by attorneys from Steptoe's award-winning International Regulatory Compliance team and the Stepwise: Risk Outlook editorial team, publishes every Monday. Guided by the knowledge of Steptoe's industry-leading International Trade and Regulatory Compliance team, the Sanctions Update compiles and contextualizes weekly developments in international regulatory enforcement and compliance, as well as offers insights on geopolitical context, business impacts, and forthcoming risks.
Subscribe to the Stepwise Risk Outlook here. To receive only the Sanctions Update edition (published most Mondays), select "Stepwise Risk Outlook: Sanctions Update." For more detailed analysis on related issues, see Steptoe's International Compliance Blog. For information on industry-specific monitoring or bespoke services, please contact the team here.
The Lede
Iran Sanctions Easing on the Horizon?
Over the weekend, the US and Iran engaged in a second round of nuclear negotiations in Rome aimed at establishing a bilateral nuclear pact that would see sanctions on Iran eased in exchange for limits on—or an end to—the country's nuclear program. The talks come after a "productive" first round in Oman last week in which the two parties, largely mediated by Muscat, agreed to enter comprehensive nuclear dialogue following months of diplomatic back-and-forth.
Like the 2015 Joint Comprehensive Nuclear Plan of Action that the Trump administration exited in 2018, a new Iran nuclear deal would function largely along the same lines: sanctions easing in exchange for curbing Iran's military nuclear enrichment program. Ten years later, however, the two parties are much further apart on key elements. Messaging from Washington has been inconsistent: at the same time as the Trump administration publicly sought talks, the President re-imposed his flagship "maximum pressure" sanctions regime, ramping up sanctions on Iran's beleaguered energy sector (including last week's new measures on Chinese "teapot" refineries, which process most Iranian imports). The administration has at times endorsed maximalist demands, with some elements reportedly seeking the full dismantlement of Iran's nuclear program (which Iran insists is currently used for legitimate civil purposes), and, more centrally, an end to Iran's proxy violence throughout the region. Iran, for its part, is seeking relief from nuclear-related US sanctions, including secondary sanctions on Chinese buyers, as well as access to billions of dollars frozen abroad.
Yet, both sides are eager for a deal. Iran, whose force projection capabilities have been decimated by various proxy conflicts with Israel and the US, is more motivated than ever to reestablish deterrence via nuclear armament. The US, Israel, and other regional partners are eager to curtail the development of nuclear weaponry in Iran via means other than a military engagement, which would be costly and result in significant entanglement in the region—anathema to the Trump White House's isolationist lean. Iran would also prefer a negotiated agreement to an all-out attack that it is ill-equipped to repel in its weakened state. The easing of sanctions, under which Tehran's economy has limped along largely via discounted energy sales to China, would be a significant boon for the legitimacy of Khomeini's government as well as Tehran's coffers.
Although an easing of sanctions is potentially on the horizon, it will be limited in scope by US policy and legal obstacles. Sanctions removals and waivers are likely to be narrowly targeted on Iran's energy industry, removing penalties along the energy supply chain—from major Iranian oil producers to a litany of sanctioned oil tankers and logistics companies to Chinese refiners. Sanctions related to Iran's destabilizing proxy behavior in the Middle East will stay in place. While many US nuclear-related sanctions on Iran are implemented under executive powers, including IEEPA, and are reversible by the Trump White House or subject to executive waivers, Congress could create roadblocks for the deal. Some Iranian sanctions are codified in legislation, such as the Iran Sanctions Act of 1996 (and later amendments), the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010, the Iran Threat Reduction and Syria Human Rights Act of 2012, and various NDAA amendments—the majority of which deal with energy sanctions to punish nuclear enrichment and human rights violations, and some of which are modifiable by waivers. Others would require Congressional votes or the modification of existing law; the designation of the IRGC-Qods Force under the Countering America's Adversaries Through Sanctions Act (CAATSA) would require a Congressional vote to waive, for example. More recent efforts include the 21st Century Peace through Strength Act of April 2024, which made the imposition of sanctions on various targets related to Iranian petroleum products and weapons trade mandatory. Most notably, the Maximum Pressure Act, reintroduced in early March by Republican lawmakers, would make President Trump's February 2025 executive order reinstating the policy into permanent law and eliminate the executive branch's ability to issue sanctions waivers—a key strategy the Trump administration would likely use to ease sanctions on Tehran.
US Developments
First Round of US-Iran Negotiations Conclude as the Pace of New Sanctions Continues
The second round of US-Iran negotiations on Iran's nuclear program took place on Saturday, April 19. Going into this round of negotiations, Iran had reportedly offered to limit its nuclear ambitions and capabilities in return for reprieve from US sanctions, which have intensified under the Trump administration's renewal of the "maximum pressure" strategy. The President's Special Envoy to the Middle East, Steve Witkoff, had stated in a post to X that "[a] deal with Iran will only be completed if it is a Trump deal" meaning that "Iran must stop and eliminate its nuclear enrichment and weaponization program." Witkoff's statement marks a potential shift from his previous stance, which indicated an openness to Iran's continued low-level enrichment that is needed to fuel nuclear-power reactors. It also sets the two powers up for a potential impasse, as Iran stated in response to Witkoff that its uranium enrichment is "non-negotiable."
Despite the ongoing discussions, the Trump administration continued to announce new sanctions targeting Iran and those supporting its oil trade. On April 16, the Office of Foreign Assets Control (OFAC) designated a China-based "teapot" refinery for allegedly purchasing Iranian crude oil, including from an alleged front company for Iran's Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). In the same announcement, OFAC sanctioned multiple companies and vessels for allegedly facilitating Iranian oil shipments as part of Iran's "shadow fleet." This was the sixth round of sanctions targeting Iranian oil and the second explicitly aimed at "teapot" refineries since President Trump announced a return to his maximum pressure strategy.
OFAC Issues Guidance on Iran Oil Sanctions for Shipping and Maritime Industry
On April 16, OFAC issued Guidance for Shipping and Maritime Stakeholders on Detecting and Mitigating Iranian Oil Sanctions Evasion. The new Guidance updates a September 2019 advisory and is part of President Trump's maximum pressure strategy as set forth in National Security Presidential Memorandum (NSPM-2). The Guidance describes Iran's "shadow fleet" and provides red flags that the shipping and maritime industry should recognize in order to spot deceptive practices associated with the circumvention of US sanctions on Iran's oil and petroleum sector. Notably, the Guidance refers repeatedly to Iranian oil shipments to China. The Guidance, in conjunction with the recent sanctions designations and NSPM-2, suggests that the Trump administration may take a more aggressive enforcement posture against the shipment of Iranian oil and petroleum to China.
OFAC Sanctions Yemeni Bank and Its Leadership
On April 17, OFAC sanctioned the Yemen-based International Bank of Yemen Y.S.C. (IBY) and certain of its key leaders or officials for their alleged financial support to Ansarallah (commonly known as the "Houthis"), a Foreign Terrorist Organization (FTO) and Specially Designated Global Terrorist (SDGT) that the US has repeatedly called a "terrorist proxy" of Iran. The Treasury Department said that IBY has refused to move its operational headquarters outside of Houthi-controlled territory in Yemen. The Treasury Department alleges that IBY is controlled by the Houthis, provides the group with access to the SWIFT transaction network to make international financial transactions, and facilitates sanctions evasion.
The sanctions on IBY follows OFAC's designation of Yemen-based Kuwait Bank for Trade and Investment Y.S.C. on January 17 for allegedly supporting the Houthis. The designation of IBY also marks the third round of sanctions by the current Trump administration against the Houthis.
Trump Administration Targets Mexico-Based Cartel
OFAC, the State Department, and the Justice Department jointly announced new actions against La Nueva Familia Michoacana (LNFM), a Mexico-based cartel that was recently designated as a Foreign Terrorist Organization (FTO) and Specially Designated Global Terrorist (SDGT):
- OFAC sanctioned four individuals allegedly associated with LNFM, including the group's supposed co-leaders, Johnny Hurtado Olascoaga and Jose Alredo Hurtado Olascoaga;
- the Justice Department unsealed indictments against the Hurtado Olascoaga brothers for various alleged drug-related offenses; and
- the State Department announced that it is offering up to $8 million for information leading to the arrest or conviction of the Hurtado Olascoaga brothers.
This "whole-of-government" approach is reflective of President Trump's directive that the federal government should act "to ensure the total elimination of these organizations' presence in the United States and their ability to threaten the territory, safety, and security of the United States," as outlined in his prior Executive Order.
TFTC Jointly Designates al-Shabaab Members
Seven members of the Terrorist Financing Targeting Center (TFTC), a multilateral organization composed of the US and several Middle Eastern countries, announced they were jointly sanctioning 15 alleged leaders, operatives, and financial facilitators of al-Shabaab. According to the Treasury Department, this is the eighth round of joint designations in the TFTC's history. It is also the first joint designation since the TFTC's members sanctioned a broad array of terrorist organizations, including ISIS and Boko Haram, on June 6, 2022.
The US had already designated the alleged al-Shabaab members on May 24, 2023. The Treasury Department alleged that the designated persons were involved in financial facilitation, business activities, the collection of funds, and the proliferation of improvised explosive devices (IEDs), all on behalf of al-Shabaab.
Top Lawmakers Introduces Bill Sanctioning Chinese Support for Russia
Rep. John Moolenaar (R-MI), the Chairman of the House Select Committee on the Chinese Communist Party (CCP), alongside Rep. Jimmy Panetta (D-CA), introduced the NO Limits Act (H.R. 2914) in Congress. The bill authorizes sanctions against certain Chinese entities that operate in the technology or defense and materiel sectors of the Russian economy, or in any other sector as determined by the Secretary of the Treasury or the Secretary of State. The bill also authorizes sanctions on any foreign person that the President determines is acting on behalf of the Chinese military or intelligence services to engage in (i) malicious cyber activities; (ii) the production, research, and development of dual-use technology or defense and related materiel; and (iii) facilitation of the evasion, circumvention, or violation of US export controls or sanctions.
We note that a similar bill of the same name was introduced in the previous Congress by then Rep. Mike Gallagher (H.R. 8043). That incarnation of the NO Limits Act did not receive much traction then, and the prospects for it passage during this Congress are similarly uncertain.
State Department De-lists Hungarian Official
Secretary of State Marco Rubio recently informed Hungarian Foreign Minister Szijjarto that the US was removing senior Hungarian official Antal Rogan from the List of Specially Designated Nationals and Blocked Persons (the "SDN List"). Rogan was previously sanctioned by the Biden administration on January 7, 2025, for his alleged involvement in corruption in Hungary, including the corrupt distribution of government contracts to party loyalists. According to Rubio, Rogan's continued designation "was inconsistent with U.S. foreign policy interests."
The Hungarian Prime Minister, Viktor Orbán, has been a consistent supporter of President Trump, and has aligned Hungarian policy with the current US administration foreign policy matters. This includes welcoming Israeli Prime Minister Bejamin Netanyahu despite his outstanding International Criminal Court (ICC) arrest warrant—for which the ICC is opening non-compliance proceedings against Hungary—and holding out against renewals of European Union (EU) sanctions on Russia, which EU Member States are reportedly growing increasingly concerned about as the extension of sectoral sanctions in July nears.
UK Developments
UK Targets European Actors under Iran Sanctions Regime
The UK Government has made two new designations under its autonomous Iran Sanctions Regime. The designations target the Iranian-backed, Swedish-based Foxtrot Network and its leader, Rawa Majid, as a result of their involvement in attacks against Jewish and Israeli targets across Europe. In announcing the designations, Foreign Secretary Lammy framed the designations as part of the UK Government's ongoing response to Iranian hostilities in Europe. Iran, and specifically the risk it poses to UK national security, is an increasing area of focus for the UK government, which recently has announced its intention to specify Iran under the enhanced tier of the UK's Foreign Influence Registration Scheme (FIRS). FIRS will go live on July 1, 2025 and, under the enhanced tier, individuals or organizations are required to register their entry into agreements or arrangements with Iran or specifically named Iranian controlled entities to carry out activities in the UK at their direction.
EU Developments
Estonia Seizes Russian Shadow Fleet
Just outside Tallinn, on Friday, April 11, 2025, Estonian authorities reportedly seized a Kremlin-linked oil tanker en route to the Russian port of Ust-Luga. The flagless vessel, named the Kiwala, supposedly operated under the flag of Djibouti, although Djiboutian authorities stated that the vessel could not be found in their national registry. Operating without a flag is a violation of maritime law. Additionally, the Kiwala is listed among sanctioned Russian vessels, part of the latest 16thsanctions package against Russia. These vessels are sanctioned for their participation in transporting Russian oil while circumventing applicable sanctions. They are considered high-risk due to their age, as older vessels are more prone to safety issues. The complete list of sanctioned vessels can be found in Annex XLII of Regulation 833/2014.
EU Council Target Iranian Officials and Entities for Human Rights Violations
On 14 April 2025, the EU Council imposed new sanctions on seven individuals and two entities in Iran in response to serious human rights violations, including the misuse of the judiciary for arbitrary detentions. This decision reflects the EU's ongoing concern about Iran's practice of detaining EU mono and dual nationals on dubious grounds for political leverage and the increase in the number of executions of women and minorities. The sanctions target the Shiraz Central Prison and the First Branch of the Revolutionary Court of Shiraz, as well as key judicial figures such as Hedayatollah Farzadi, head of Evin prison, and Mehdi Nemati, head of the Fars Prisons Protection and Intelligence Department. With these new measures, a total of 232 individuals and 44 entities are now subject to asset freezes, travel bans, and prohibitions on economic resource provision. The EU also maintains a ban on exporting equipment that could be used for internal repression or telecommunications monitoring to Iran.
EU Council Enhances EU Arms Export Control Framework
On 15 April 2025, the EU Council adopted new measures to strengthen the EU framework for arms export control. This decision amends the Common Position on the control of exports of military technology and equipment, reinforcing the EU's commitment to responsible and transparent arms trade. The updated framework aims to prevent the diversion of arms to terrorists, criminals, and unauthorized users, while promoting convergence among member states' export policies within the Common Foreign and Security Policy. The Council also called for the universal adoption of the Arms Trade Treaty (ATT) and outlined future efforts to enhance the tracing and monitoring of military equipment, end-user verification, and the facilitation of exports of jointly developed military technology. The updated User's Guide for licensing officers was also adopted, reflecting recent developments and setting the stage for the next review in 2030. This review was partly driven by the EU's arms deliveries to Ukraine and the need to streamline exports of jointly developed military equipment.
Third Countries Align with Recent EU Sanctions
The High Representative of the EU has announced that Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Montenegro, North Macedonia, Norway, the Republic of Moldova, and Ukraine have aligned themselves with several Council decisions, reported in our March, 31 Sanctions Update. Specifically, these countries have aligned with Decision 2025/632, which imposes additional sanctions on 25 individuals and 7 entities in Belarus for actions undermining democracy, human rights abuses, and military cooperation with Russia in its war against Ukraine.
For more information on the content of this decision, please see our blog post here. These countries, including EU candidate nations, have regularly aligned themselves with EU sanctions.
Asia-Pacific Developments
China Imposes Visa Restrictions on US Personnel over Tibet
On April 14, 2025, China announced reciprocal visa restrictions against US personnel who have "behaved badly" on Tibet-related issues, following Washington's imposition of similar restrictions on Chinese officials. In response, the US accused the Chinese Communist Party of denying access to Tibet and other Tibetan regions for US diplomats, journalists, and international observers, calling for "unrestricted access" for American officials and others to these areas.
China's Ministry of Foreign Affairs ("MOFA") criticized the US actions as violations of international law and norms, asserting that Tibet-related matters are purely internal affairs of China. Spokesman Lin Jian emphasized that these countermeasures align with China's Foreign Relations Law and the Anti-Foreign Sanctions Law.
Lin reiterated that Tibet is open to foreign visitors and business, but he condemned any interference by other countries under the pretext of human rights or cultural concerns. He expressed opposition to individuals using visits to Tibet as a cover for disruptive activities, reinforcing China's stance on maintaining sovereignty over the region.
Ukraine Bans China's Firms for Helping Russia Make Missiles
On April 19, 2025, Ukraine imposed sanctions on three Chinese companies—Beijing Aviation And Aerospace Xianghui Technology Co. Ltd, Rui Jin Machinery Co. Ltd, and Zhongfu Shenying Carbon Fiber Xining Co. Ltd.—alleging their involvement in the production of advanced Iskander missiles for Russia. This action follows President Volodymyr Zelensky's claims that China has been supplying weapons to Russia amid its ongoing war in Ukraine. In response, China's MOFA dismissed these accusations as unfounded and emphasized its desire to maintain a neutral stance while continuing economic relations with Russia.
Zelensky's government has updated its sanctions list to include nearly a hundred entities, most of which are involved in missile production, specifically targeting those linked to the Iskander missile system used by Russia in the conflict. The sanctions will prohibit the designated companies from conducting business in Ukraine and will freeze their assets within the country.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
