Monthly Sanctions Update (February 2026)

KEY DEVELOPMENTS

• Major UK and EU designations and Russia escalation: UK announcement of its largest Russia sanctions package to date on 24 February 2026, introducing nearly 300 new designations targeting energy revenues, shadow fleet networks, LNG and civil nuclear sectors, military supply chains and certain financial institutions; EU restrictive measures against additional Russian individuals linked to human rights abuses and repression; continued UK Iran human rights designations; UN Security Council sanctions targeting senior Rapid Support Forces commanders in Sudan.

• Sanctions enforcement and penalty developments: OFSI publication of revised Financial Sanctions Enforcement and Monetary Penalties Guidance introducing a four-level seriousness framework, refined penalty calculation methodology and enhanced discount mechanisms; proposed increase to the UK Statutory Maximum Penalty from the greater of £1 million or 50 percent of breach value to the greater of £2 million or 100 percent of breach value, subject to legislative approval; OFSI case study highlighting compliance failings in the Bank of Scotland Russia sanctions breach. 

• Ownership and control scrutiny: OFSI launch of an open call for evidence on 16 February 2026 regarding the practical operation of the ownership and control test under UK financial sanctions, signalling potential future clarification or reform. 

• Russia-related asset divestment and licensing activity: OFAC extension of the deadline for authorised negotiations relating to the sale of Lukoil’s foreign assets; issuance of UK wind-down General Licences in respect of PJSC Transneft and Maritime Mutual; amendment and extension of the Lukoil Bulgaria continuation licence. 

• US enforcement and policy developments: US authorities strengthened sanctions enforcement infrastructure and policy tools, including the launch of OFAC’s Voluntary Self-Disclosure Portal and FinCEN’s sanctions whistleblower portal, alongside the first designations under the Protecting American Intellectual Property Act (PAIPA), signalling continued expansion of US sanctions authorities and reporting mechanisms.

GLOBAL SANCTIONS 

EU 

• On 26 February 2026, the Council of the European Union strengthened the scope of the EU’s counter-terrorism sanctions regime under Council Common Position 2001/931/CFSP and renewed all existing listings on the EU terrorist list. The framework provides for the freezing of funds and economic resources of listed persons, groups and entities, as well as a prohibition on making funds or economic resources available to them. In confirming the continued application of the regime and broadening its scope, the Council stated that the measures are intended to ensure the EU’s counter-terrorism sanctions remain effective and responsive to evolving security threats.

IRAN

• On 2 February 2026, the Foreign, Commonwealth & Development Office (FCDO) added one entity and ten individuals to the UK Sanctions List under the Iran (Sanctions) Regulations 2023 in response to serious human rights violations and abuses in Iran, including the violent suppression of protestors. The designated organisation is the Law Enforcement Forces of the Islamic Republic of Iran, which is subject to an asset freeze and director disqualification sanction. The ten individuals added include senior Iranian officials such as Eskandar Momeni, Mohammad Reza Hashemifar, Ahmed Amini, Mohammad Ghanbari, Ahmad Darvish Goftar and Mehdi Rasakhi, among others, who are sanctioned for their roles in violent crackdowns, arbitrary detention and serious human rights abuses.

• On 25 February 2026, OFAC designated multiple entities, individuals and vessels involved in facilitating Iranian petroleum sales and related financial flows, including networks used to disguise the origin of Iranian oil shipments. Those designated were added to the Specially Designated Nationals and Blocked Persons (SDN) List, triggering asset freezes and prohibiting U.S. persons from engaging in transactions with them.

MYANMAR

• On 10 February 2026, the FCDO issued a Sanctions Notice under the Myanmar (Sanctions) Regulations 2021 correcting an entry on the UK Sanctions List. The amendment updated the designation details for Sky One Construction Company Ltd, which remains subject to UK sanctions including an asset freeze and director disqualification sanction. The UK statement of reasons notes that the company contributed funds to the Myanmar Security Forces in 2017. The notice clarifies the entry but does not remove the entity from the sanctions list. All relevant prohibitions and reporting obligations continue to apply.

NICARAGUA 

• On 26 February 2026, OFAC sanctioned five Nicaraguan officials for their alleged roles in supporting repression by the Ortega–Murillo regime. Those designated include senior officials from Nicaragua’s Financial Analysis Unit, Ministry of Labor, telecommunications regulator, and military intelligence directorate. OFAC cited the ongoing repression of political opponents, restrictions on media freedom, and constitutional changes consolidating executive power.

RUSSIA 

• On 10 February 2026, the FCDO published a Sanctions Notice under the Russia (Sanctions) (EU Exit) Regulations 2019 that updates the UK Sanctions List entry for Digital Security Services LLC. The notice refines the details associated with the company’s listing, including corrections to its name and related identifiers, to improve accuracy in the sanctions register. The variation does not remove the company from the sanctions list and does not change the substantive sanctions measures applied to it. Digital Security Services LLC remains subject to the UK’s financial sanctions regime.

• On 13 February 2026, the FCDO issued a Sanctions Notice updating the UK Sanctions List under the Russia (Sanctions) (EU Exit) Regulations 2019 by varying the listing for Saodat Narzieva. The variation removed a reference to Narzieva “obtaining a financial or other material benefit from Alisher Usmanov” while keeping her subject to UK sanctions measures, including an asset freeze, travel ban, trust services sanctions and director disqualification sanction. Narzieva was originally designated on 13 April 2022 as an “involved person” under the Russia regime based on her familial and associational links to Usmanov. The update does not alter the underlying sanctions obligations, which continue to apply.

• On 23 February 2026, the Council of the European Union adopted restrictive measures targeting eight additional individuals responsible for serious human rights violations, the repression of civil society and democratic opposition in Russia, and the undermining of the rule of law. The newly listed individuals include members of the Russian judiciary involved in politically motivated trials and senior figures in the penal system connected to inhumane detention conditions for political prisoners, including activists sentenced on politically motivated charges. Those designated are subject to asset freezes and travel bans.

• On 24 February 2026, marking four years since Russia’s full-scale invasion of Ukraine, the UK Government announced what it described as its largest sanctions package to date against Russia, introducing nearly 300 new designations and bringing the total number of UK targets under the Russia regime to over 3,000. The measures focus heavily on Russia’s energy revenues, including action against PJSC Transneft, networks involved in trading Russian oil, dozens of oil tankers linked to circumvention activity, and entities connected to the LNG and civil nuclear sectors, as well as additional suppliers supporting Russia’s military capabilities and certain financial institutions facilitating cross border payments. The Government stated that the package is intended to further restrict the Kremlin’s ability to generate revenue and sustain its war effort, while reinforcing the UK’s continued support for Ukraine.

• On 26 February 2026, reporting indicated that OFAC extended the deadline under its existing OFAC authorisation permitting negotiations and preparatory steps for the sale of Lukoil’s foreign assets, moving the cut-off from 28 February 2026 to 1 April 2026. The extension continues the effect of the prior authorisation and provides additional time for potential buyers to progress divestment discussions while underlying sanctions remain in force.

• On 26 February 2026, during a parliamentary committee session, a UK government minister indicated that the UK could consider joining the EU in pursuing a ban on the provision of maritime services relating to Russian oil shipments, even if the United States does not adopt equivalent measures. The comments signal potential further tightening of restrictions targeting Russian oil exports and associated shipping and insurance services.

SUDAN 

• On 25 February 2026, the UN Security Council imposed sanctions on four senior commanders of Sudan’s paramilitary Rapid Support Forces (RSF) for their roles in the capture of el-Fasher on 26 October 2025, which a UN fact-finding mission described as involving mass atrocities. The individuals designated are RSF deputy commander Abdul Rahim Hamdan Dagalo, Brigadier General Al-Fateh Abdullah Idris (Abu Lulu), Gedo Hamdan Ahmed, and Tijani Ibrahim. The sanctions, which may include asset freezes and travel bans under UN authorities, follow previous designations by the United States and the United Kingdom relating to the same conduct. According to the UN refugee agency, more than 70,000 civilians have fled el-Fasher since it was captured.

SYRIA 

• On 25 February 2026, OFAC announced a $3,777,000 settlement with a US individual for 20 apparent violations of the former Syria Sanctions Regulations. Between 2018 and 2021, the individual provided managerial services to Syrian real estate companies while serving as an executive and board member. OFAC characterised the conduct as egregious and not voluntarily disclosed. Although US sanctions on Syria were lifted in 2025, OFAC emphasised that the removal of sanctions does not extinguish liability for past breaches, underscoring its continued enforcement posture.

GLOBAL REGULATIONS/TOOLS UPDATE – UK 

FCDO updated UK Sanctions List search tool user guide 

On 12 February 2026, FCDO published an updated user guide for the UK Sanctions List search tool. The guide explains how to use the search function and accompanying filters to identify individuals, entities and vessels subject to UK sanctions. The user guide can be found here. 

FCA publishes guidance on reporting suspected sanctions evasions 

On 12 February 2026, the UK Financial Conduct Authority published new guidance on reporting suspected sanctions evasion, clarifying how regulated firms and professionals should notify the FCA of suspected or actual sanctions evasion and weaknesses in sanctions controls. The guidance outlines reporting routes, including the FCA’s wrongdoing or misconduct reporting form and its whistleblowing channels, and emphasises that firms should report suspected breaches, control deficiencies or methods used to circumvent sanctions, particularly where these involve firms or individuals on the FCA’s registers or UK-listed securities. The guidance can be found here.

Updated OFSI guidance on financial sanctions enforcement and monetary penalties 

On 9 February 2026, OFSI updated its Financial Sanctions Enforcement and Monetary Penalties Guidance following a 12-week public consultation in 2025 on enhancing OFSI’s civil enforcement framework. The revised guidance introduces a clearer four-level seriousness categorisation for breaches and refines the case factors OFSI considers, including greater emphasis on management of sanctions risk and the strategic priority of the relevant regime. It sets out in more detail how OFSI determines the statutory maximum penalty, which is the greater of £1 million or 50 percent of the estimated value of the breach where that value can be assessed, and how it then establishes a reasonable and proportionate baseline penalty, with indicative guidance that the most serious Level 4 cases should generally attract a baseline at or above 75 percent of the statutory maximum. The guidance also formalises three potential discounts to that baseline penalty: up to 30 percent for voluntary, prompt and complete self-reporting combined with proactive cooperation, up to 20 percent under a new Early Account Scheme for early factual admissions, and a 20 percent settlement discount, with cumulative application where more than one applies. Additional updates include a new policy on assessing claims of financial hardship and expanded guidance on fixed monetary penalties for certain information, reporting and licensing breaches. The Government states that the changes are intended to increase transparency, incentivise early engagement, and ensure enforcement outcomes remain effective, proportionate, and consistent. The full guidance can be found here. 

Proposed increase to the UK’s Statutory Maximum Penalty 

In a 29 January 2026 blog post, OFSI Director Giles Thomson confirmed that the Government intends to increase the statutory maximum monetary penalty for financial sanctions breaches from the current threshold of the greater of £1 million or 50 percent of the estimated value of the breach to the greater of £2 million or 100 percent of the estimated value. Because the statutory maximum is set out in primary legislation under the Policing and Crime Act 2017, this change requires parliamentary approval and cannot be implemented through updated guidance alone. OFSI confirmed that all reforms not requiring legislative amendment took effect upon publication of the revised Enforcement and Monetary Penalties Guidance in February 2026, while the proposed increase to the statutory maximum will be introduced once the necessary legislative changes are enacted. 

OFSI launches an open call for evidence

On 16 February 2026, OFSI launched an open call for evidence on how the ownership and control test is operating in practice under the UK financial sanctions regime. The exercise seeks evidence and practical examples from firms, legal advisers and compliance professionals, particularly in relation to circumstances in which hypothetical control arises, the resulting compliance burden and legal risk, and whether existing legal concepts or typologies assist in assessing control.

The call for evidence closes on 13 April 2026. Responses may be submitted via an online form or by email. The Government intends to use the feedback to inform future policy development, with the aim of ensuring that the sanctions framework remains both effective and workable for legitimate business activity. 

Amendment to Personal Remittances General Licence

On 18 February 2026, OFSI amended its Personal Remittances General Licence (INT/2024/4761108) to expand the scope of permitted personal banking activities involving certain designated persons. The amendment authorises specified personal payments through institutions in the UK, EU/EFTA, US and Canada, subject to strict conditions and a cumulative monetary cap. The licence does not permit commercial transactions or activity beyond the defined personal remittance parameters. 

OFSI Prioritises Licence Applications 

On 19 February 2026, OFSI published new guidance explaining how it prioritises financial sanctions licence applications. The guidance outlines how OFSI categorises applications as high, medium or low priority, including consideration of factors such as humanitarian need, legal obligations, and risks to the integrity of the sanctions regime. The publication is intended to improve transparency around OFSI’s case management approach.

OFSI case study 

On 23 February 2026, OFSI published a blog highlighting practical compliance lessons from its £160,000 monetary penalty imposed on Bank of Scotland Plc for breaches of the Russia financial sanctions regime. The post uses the case to illustrate how sanctions controls operate in practice and what weaknesses can expose firms to the risk of breaching UK sanctions, which apply to conduct within the UK and to UK persons globally.

Key lessons include:

• Screening quality matters: The bank’s automated screening failed to match a designated person because of a spelling variation in the customer’s name, underscoring the importance of robust data configuration and using enriched screening tools where justified by risk.

• Automation alone isn’t enough: Firms need strong contingency procedures and clear escalation paths so staff know exactly when and how to raise potential sanctions issues, especially in higher-risk areas like PEPs.

• Training must be current: training should be regularly reviewed and updated to reflect changes in the geopolitical and regulatory landscape to ensure effective compliance.
• Voluntary disclosure helps: Prompt disclosure of a suspected breach can materially influence the outcome. OFSI rewards early and complete voluntary reporting with penalty discounts, and firms should act “as soon as practicable” in reporting.

OFSI emphasises that it looks at how well controls work in practice, not just whether they exist, and encourages firms to review their screening systems, escalation procedures, training and reporting frameworks in light of these lessons.

General Licences  

Maritime Mutual Wind Down General Licence (INT/2026/8893924), effective 24 February 2026 

This licence (INT/2026/8893924) permits UK insurers and UK insurance brokers to receive, process and transmit funds to or from Maritime Mutual Association Limited, Maritime Mutual Insurance Association (NZ) Limited and their subsidiaries in connection with insurance or reinsurance contracts agreed in writing before 24 February 2026. The licence also authorises activity reasonably necessary to cancel, terminate or otherwise wind down such arrangements, and allows relevant UK institutions to process associated payments. It expires at 23:59 on 9 April 2026. The licence imposes six-year record keeping requirements and does not authorise conduct beyond what is expressly permitted under the Russia Regulations.

PJSC Transneft Wind Down General Licence (INT/2026/8889196), effective 24 February 2026 

This licence (INT/2026/8889196) authorises persons to wind down or divest from transactions involving PJSC Transneft or its subsidiaries, including closing out positions, together with any activity reasonably necessary to give effect to that wind down. The licence also permits relevant UK institutions to support such activity and remains in force until 23:59 on 9 April 2026. It is subject to six-year record keeping obligations and does not permit activity that would otherwise breach the Russia Regulations.

Continuation of Business of Lukoil Bulgaria Entities General Licence (INT/2025/7895596), amended 10 February 2026 

OFSI’s General Licence INT/2025/7895596, originally issued on 14 November 2025 under the Russia (Sanctions) (EU Exit) Regulations 2019, permits certain activities necessary to support the continued operation and specified dealings involving Lukoil Neftochim Burgas AD and related Bulgarian subsidiaries, notwithstanding their designation under the Russia sanctions regime. The licence was amended on 20 November 2025 to expand the list of covered subsidiaries and further amended on 10 February 2026 to extend its expiry date to 13 August 2026. The February amendment did not alter the substantive permissions but prolonged the duration of the licence.

GLOBAL REGULATIONS/TOOLS UPDATE – USA 

Launch of Voluntary Self-Disclosure Portal 

On 6 February 2026, OFAC launched a new online Voluntary Self-Disclosure (VSD) Portal to provide a streamlined and secure method for reporting potential sanctions breaches. OFAC reiterated that qualifying voluntary self-disclosures are a significant mitigating factor and may result in up to a 50 percent reduction in the base penalty amount.

FinCEN launches sanctions whistleblower portal 

On 13 February 2026, the US Financial Crimes Enforcement Network (FinCEN) launched a dedicated online portal to receive confidential whistleblower tips relating to sanctions violations, as well as fraud and money laundering. The webpage provides information on eligibility, reporting procedures and potential award mechanisms under the US whistleblower programme, and is intended to strengthen detection and enforcement of financial crimes and sanctions breaches.

The PAIPA sanctions 

On 24 February 2026, the U.S. State Department announced the first-ever designations under the Protecting American Intellectual Property Act of 2022 (PAIPA), targeting a Russian cyber tools broker, its director and a UAE-based affiliate for their alleged involvement in the theft and sale of US trade secret exploits. PAIPA mandates the imposition of sanctions, including blocking measures and financial restrictions, against foreign persons engaged in significant trade secret theft that threatens US national security or economic interests. OFAC simultaneously designated the same parties under its cyber-related authorities, underscoring the US Government’s willingness to deploy IP-related sanctions tools alongside traditional financial sanctions frameworks.

CONCLUSION 

February’s developments reinforce that the scope and reach of the principal international sanctions regimes are becoming ever broader, extending across new sectors, actors and compliance touchpoints. At the same time, the consequences of breaching those regimes are becoming increasingly serious. In the UK, this is reflected in OFSI’s updated enforcement guidance and its proposed increase to the UK Statutory Maximum Penalty, signalling a more robust and structured approach to sanctions breaches.

As scrutiny intensifies, firms should ensure that their sanctions controls remain proportionate, well-documented and capable of withstanding regulatory review. MR’s monthly sanctions update will continue to monitor these developments and key enforcement trends shaping the global sanctions landscape.

This blog post is not offered, and should not be relied on, as legal advice. You should consult an attorney for advice in specific situations.