KEY DEVELOPMENTS
- UK, US and EU sanctions developments following unrest in Iran: The UK confirmed it is reviewing the scope of its Iran sanctions response following reports of fatalities and mass arrests linked to unrest beginning in late December 2025; ministers indicated that existing designations remain in force and that further measures may be introduced. A House of Commons Library briefing outlined planned UK sanctions targeting sectors including finance, energy, transport and software, and referenced the October 2025 “snapback” of UN sanctions on Iran’s nuclear and ballistic missile programmes. The US and EU also moved in parallel, with Washington imposing multiple sanctions targeting Iranian oil shipping networks, senior officials and digital asset platforms linked to repression and sanctions evasion, and EU governments preparing a new package of human rights-based measures.
- Sanctions evasion and enforcement challenges: Investigative reporting highlighted the limits of unilateral sanctions, revealing that a UK-designated Iranian businessman continues to control substantial European real estate assets outside the scope of EU sanctions; the case illustrates how complex ownership structures and divergence between UK and EU regimes can complicate asset freeze enforcement.
- Russia-related energy and sanctions developments: The EU formally adopted a phased ban on imports of Russian gas under the REPowerEU strategy, marking a significant escalation in energy-related sanctions. Western measures also continued to drive the forced divestment of Russian energy assets overseas. In the UK, enforcement activity remained active, with criminal proceedings scheduled in the luxury goods sector, amendments to the UK Sanctions List, and a court judgment confirming that compliance with Russia sanctions can provide a lawful basis for refusing services.
- Regional and cross-sector sanctions actions: The US imposed sanctions targeting a Costa Rica-based cocaine trafficking and money laundering network, and separate measures against Hamas-linked entities in Gaza that are operating through purported humanitarian and nonprofit structures.
- Global regulatory and general licence updates: The UK moved to a single authoritative sanctions list, discontinuing updates to OFSI’s consolidated OFSI also revised the Russian oil price cap and imposed a monetary penalty on a UK bank for sanctions screening failures. In the US, OFAC issued a new general licence authorising narrowly defined transactions involving Venezuelan-origin oil, subject to detailed conditions and reporting requirements.
GLOBAL SANCTIONS
IRAN
- On 13 January 2026, the UK government confirmed it is reviewing the scope of its sanctions response to developments in Iran following reports of fatalities and mass arrests linked to unrest that began in late December 2025. In a statement to Parliament, ministers indicated that existing UK sanctions targeting Iranian individuals and entities linked to human rights abuses remain in force, and that additional designations may be considered depending on further developments. The update reflects continued UK use of its autonomous Iran sanctions regimes, including asset freezes and travel bans, in response to assessed conduct by Iranian state-linked actors.
- A House of Commons Library research briefing published on 19 January 2026 outlines the UK and international response to widespread protests in Iran that began in late December 2025. The briefing notes that, alongside diplomatic condemnation of Iranian state violence, the UK Government has indicated it plans to introduce further sanctions targeting sectors including finance, energy, transport and software in response to human rights abuses and the regime’s actions. As at mid-January 2026, the UK had 286 individuals and 260 organisations on its Iran sanctions lists, including entities linked to the Islamic Revolutionary Guard Corps and groups deployed against protesters. The briefing also references the UK’s October 2025 decision, with France and Germany, to trigger “snapback” of UN sanctions against Iran’s nuclear and ballistic missile programmes, reinstating broad multilateral measures that apply across UN member states.
- On 23 January 2026, the US imposed sanctions on nine vessels and their owners accused of transporting hundreds of millions of dollars’ worth of Iranian oil to foreign markets through a “shadow fleet” of older tankers flagged in jurisdictions including Palau and Panama. OFAC stated that the measures were linked to Iran’s ongoing crackdown on nationwide protests and its unprecedented internet shutdown, which began on 8 January 2026 to suppress information sharing and conceal human rights abuses. US officials described the sanctions as targeting a critical revenue source used to fund domestic repression, underscoring Washington’s increasing focus on oil shipping networks that enable Iran to evade international restrictions and generate illicit export income.
- On 26 January 2026, investigative reporting by the Financial Times revealed that Ali Ansari, an Iranian businessman designated by the UK for allegedly financing the Islamic Revolutionary Guard Corps, controls a European real estate portfolio valued at approximately €400 million through a network of offshore holding companies. While UK authorities froze Ansari’s London assets following his designation, the investigation found that he is not currently subject to EU sanctions, allowing him to retain ownership of high-value properties in Spain, Germany and Austria, including hotels, a golf resort and a shopping centre. The findings, based on corporate filings across multiple jurisdictions, illustrate how complex ownership structures and gaps between UK and EU sanctions regimes can limit the practical reach of unilateral sanctions measures and complicate asset-freeze enforcement beyond national borders.
- 27 January 2026: EU governments are expected to approve a package of new sanctions against Iranian individuals and entities in response to the Iranian government’s violent crackdown on nationwide protests that began in late December 2025. The measures are anticipated to be adopted under the EU’s global human rights sanctions framework and are likely to target those responsible for or linked to the repression, including travel bans and asset freezes, though Iran’s Islamic Revolutionary Guard Corps is not expected to be added to the list at this stage. The sanctions push reflects mounting EU concern over serious human rights abuses in Iran, complementing existing EU restrictions related to Iran’s nuclear and proliferation activities.
- On 30 January 2026, the US imposed new sanctions against Iranian officials and financial networks linked to the regime’s violent crackdown on nationwide protests. OFAC designated Iran’s Interior Minister Eskandar Momeni Kalagari and several senior Islamic Revolutionary Guard Corps and law enforcement commanders for their roles in repression and human rights abuses. The US also sanctioned Babak Morteza Zanjani, a prominent businessman accused of laundering funds for the regime, together with two UK-registered digital asset exchanges, Zedcex Exchange Lt and Zedxion Exchange Ltd., which allegedly processed significant volumes of IRGC-linked transactions. The US Treasury described the move as its first designation of a digital asset exchange connected to Iran, highlighting the growing US focus on the use of cryptocurrency platforms in an effort to support sanctions evasion as well as regime financing.
KAZAKHSTAN
- On 28 January 2026, Kazakhstan’s government formally submitted a bid to US authorities to acquire stakes held by Russian oil producer Lukoil in major Kazakh energy projects, including interests in the Karachaganak and Tengiz oilfields and the Caspian Pipeline Consortium, according to a report in Global Banking & Finance Review. The move comes as Lukoil, which was sanctioned by the US in October 2025, is required to divest its overseas assets under the terms of the sanctions regime and associated wind-down licence, with a deadline of 28 February 2026 for sales. Kazakhstan’s bid will require approval from the US Office of Foreign Assets Control (OFAC) given the sanctions framework under which asset disposals must take place. The involvement of a sovereign state in a bid for sanctioned foreign energy assets reflects how sanctions are reshaping global energy ownership and investment dynamics, particularly in Central Asia where key energy infrastructure is jointly operated by Western and regional partners.
RUSSIA
- 12 January 2026: The UK Crown Prosecution Service has scheduled a criminal trial in January 2028 against Hauser & Wirth’s UK subsidiary and a London-based art shipping company for alleged breaches of the UK’s Russia sanctions regime. Prosecutors allege that the gallery made a high-value artwork available in 2022 to a person “connected with Russia,” in contravention of the UK ban on the supply of luxury goods, including artwork, to such persons under the Russia (Sanctions) (EU Exit) Regulations. The alleged conduct relates to a work by George Condo provided between April and December 2022, a period after the UK introduced a prohibition on exporting luxury items valued over £250 to Russia following the invasion of Ukraine. A procedural hearing is set for 5 May 2026, when the defendants are expected to enter pleas, and the trial itself is scheduled for January 2028 at Southwark Crown Court. This case marks a significant test of sanctions enforcement in the UK luxury goods sector and reflects intensified scrutiny of corporate compliance with sanctions, particularly where luxury goods and art market participants are concerned.
- In Migita and others v JP Morgan [2026] 1 WLUK154, a judgment handed down on 16 January 2026, the Central London County Court dismissed discrimination claims arising from the bank’s refusal to onboard three Russian-born clients in 2023. The court accepted that the decision was driven by compliance with EU Russia sanctions, specifically the deposit restrictions under Regulation 833/2014, which prohibit EU-regulated banks from accepting deposits exceeding €100,000 from Russian nationals unless an exemption applies. Although the claimants alleged that the refusal amounted to unlawful discrimination based on nationality, the court found that onboarding would have been prohibited under the sanctions regime in any event. The case confirms that sanctions compliance can provide a lawful basis for refusing services, while highlighting the importance of clear internal reasoning and accurate external communications when sanctions restrictions are relied upon.
- On 16 January 2026, the UK Government issued an update to the UK Sanctions List under the Russia sanctions regime, amending the entry for John Michael Ormerod. The individual remains designated and continues to be subject to an asset freeze and trust services sanctions.
- On 26 January 2026, the Council of the European Union formally adopted legislation introducing a phased ban on imports of Russian gas, covering both pipeline gas and liquefied natural gas. The measure forms part of the EU’s REPowerEU strategy to end dependence on Russian energy supplies. The ban will be implemented gradually, with initial restrictions taking effect shortly after the regulation enters into force and transitional arrangements applying to certain existing contracts to mitigate market disruption. A full prohibition on Russian LNG imports is expected from early 2027, with pipeline gas imports to be phased out by autumn 2027. Member states will be required to verify the origin of gas imports, notify authorities of any remaining Russian supply contracts, and submit national diversification plans by 1 March 2026. The regulation will apply directly across all EU member states following publication in the Official Journal.
- 28 January 2026: Western sanctions imposed on Russia’s energy sector in late 2025 are accelerating the forced unwind of major Russian oil companies’ overseas footprints, with Lukoil now marketing an estimated $22 billion portfolio of international assets across upstream production, refining, retail fuel networks, and joint venture stakes. According to Reuters, Chevron is in talks with Iraq over West Qurna-2, one of the world’s largest oilfields where Lukoil holds a 75% stake and is seeking improved contract terms before taking over operations, highlighting how sanctions-driven divestments are reshaping access to strategic energy infrastructure. Reports in early January 2026 also pointed to a potential bid led by Chevron alongside private equity firm Quantum Energy Partners, potentially splitting Lukoil’s international assets between them as restrictions on financing and operations continue to narrow Lukoil’s ability to maintain foreign holdings.
SOUTH KOREA
- 26 January 2026: The US has announced plans to raise tariffs on imports from South Korea to 25%, up from the current 15%, citing delays in Seoul’s implementation of a bilateral trade agreement reached in 2025. The proposed increase would apply across a broad range of goods subject to the US “reciprocal tariff” framework, including automobiles, pharmaceuticals, lumber and other manufactured products. South Korea stated that it had not received formal notification of the tariff increase and has requested urgent consultations with Washington. The trade deal, which includes a US$350 billion South Korean investment commitment in the US, was submitted to South Korea’s National Assembly in November and is still under review. Market reaction was initially negative, particularly for Korean automotive manufacturers, though equity markets later recovered amid uncertainty as to whether the tariff increase will ultimately be implemented.
COSTA RICA
- On 22 January 2026, the US imposed sanctions on a major Costa Rica-based cocaine trafficking and money laundering network responsible for transporting multi-ton quantities of cocaine from Colombia through Costa Rica to the United States and Europe. OFAC designated Luis Manuel Picado Grijalba, described as one of the Caribbean’s most prolific traffickers, along with his brother, key enforcers, and five Costa Rica-based entities used to facilitate drug shipments and launder proceeds. The designated entities include businesses operated by family members, such as fishing, investment, and commercial companies, as well as a beauty salon alleged to have served as a front for laundering illicit funds and notarising fraudulent transactions. The action underscores growing US focus on Costa Rica’s role as a transshipment hub and reflects coordinated efforts with the DEA and Costa Rican authorities to dismantle the financial infrastructure supporting regional narcotics trafficking.
GAZA
- On 21 January 2026, the US imposed new sanctions targeting Hamas’s covert support infrastructure, including nonprofit organizations in Gaza and an internationally active front group linked to Hamas’s political outreach abroad. OFAC designated six Gaza-based entities that purported to provide humanitarian and medical services but were found to be integrated into Hamas’s military wing and used to divert donor funds to support terrorist operations. The US also sanctioned the Popular Conference for Palestinians Abroad, described as a Hamas-controlled organization involved in organizing international flotillas and expanding Hamas’s influence within the Palestinian diaspora, alongside a UK-based senior official affiliated with its leadership. The designations reflect a growing focus on the exploitation of civilian and charitable structures to finance terrorism while posing heightened compliance risks for the humanitarian and nonprofit sectors.
GLOBAL REGULATION/ TOOL UPDATES
On 28 January 2026, the UK moved from a dual-list system to a single authoritative list for sanctions designations. Previously, UK designations were published in both the UK Sanctions List (maintained by the FCDO) and OFSI’s Consolidated List of Asset Freeze Targets. Following the change, the OFSI Consolidated List and its search tool has stopped being updated, and all new UK designations, amendments and de-listings are now being published only on the UK Sanctions List.
General Licenses
On 15 January 2026, OFSI revised General Licence INT/2024/4423849 governing the provision of maritime transport and related services for Russian crude oil and oil products where transactions comply with the oil price cap. The revised licence lowers the cap from USD 47.60 to USD 44.10 per barrel, with the new threshold applying from 23:01 GMT on 31 January 2026. To facilitate an orderly transition, OFSI has included a temporary wind-down period for contracts entered into before that time which meet the previous cap, allowing such activity to continue until 22:59 BST on 16 April 2026. OFSI also updated its Financial Sanctions FAQs and the Maritime Services Ban and Oil Price Cap industry guidance to reflect the revised cap.
On 26 January 2026, the UK’s Office of Financial Sanctions Implementation (OFSI) imposed a £160,000 monetary penalty on Bank of Scotland plc, part of Lloyds Banking Group, for breaching the UK’s Russia sanctions regime. The penalty follows an incident in February 2023 in which the bank opened and operated a personal current account for Dmitrii Ovsiannikov, a Russian national and former senior official who remains on the UK Sanctions List. Of the 24 payments processed through the account, totaling approximately £77,000, OFSI determined that the bank had made funds available to a designated person in contravention of financial sanctions prohibitions. The breach occurred because the account was opened using a British passport with a spelling variation of Ovsiannikov’s name, which was not reflected in the bank’s automated sanctions screening database, resulting in the initial failure to flag the customer as a designated person. The account was later identified during enhanced screening, the restrictions were applied, and the issue was voluntarily reported to OFSI by the bank, which contributed to the 50% reduction in the penalty from its original level. Lloyds has stated that it has strengthened its sanctions controls and screening systems following the incident. This case underscores the importance of robust name matching and screening processes, including handling of name variants and politically exposed person checks, for UK financial institutions subject to financial sanctions requirements.
On 29 January 2026, OFAC issued General License No. 46 under the US’s Venezuela Sanctions Regulations (31 CFR part 591), authorising certain transactions ordinarily incident to the lifting, export, sale, transport, and refining of Venezuelan-origin oil by established U.S. entities, including dealings involving PdVSA and other blocked Venezuelan state-linked entities. The authorisation is subject to strict conditions, including that contracts must be governed by US law with dispute resolution in the United States, and that any payments to blocked persons must be made into designated Foreign Government Deposit Funds. The licence permitsrelated shipping, logistics, marine insurance, and commercially reasonable crude or product swap arrangements, while prohibiting non-commercial payment terms, digital currency payments, transactions involving Russia, Iran, North Korea, Cuba, or certain China-linked joint ventures, and any dealings with blocked vessels. The licence also imposes detailed reporting requirements for any onward supply of Venezuelan oil outside the United States, underscoring continued regulatory scrutiny of sanctioned energy-sector activity.
CONCLUSION
We will track these developments and, by way of our monthly sanctions update, we will continue to offer timely insight into international sanctions measures, regulatory changes and 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.