News Type: Blogs

KEY DEVELOPMENTS

• Major U.S. and U.N. designations: New U.S. sanctions on Colombia’s president and senior officials; joint U.S.–U.N. designations targeting Haitian gang leaders; U.S. designation of Venezuela’s “Cartel de los Soles” as an FTO; Nigeria designated a “country of particular concern.”
• High-value sanctions litigation: Mikhail Fridman initiated US$16bn investment treaty arbitration against Luxembourg challenging EU sanctions-related asset freezes.
• Cyber-related sanctions expansions: Coordinated U.S.–UK–Australia designations against Russian “bulletproof hosting” providers (including Media Land, ML.Cloud, Aeza Group); U.S. designations targeting North Korean crypto-laundering and DPRK IT worker networks.
• Significant Russia-related developments: UK action against a billion-dollar Russian money-laundering network; U.S. measures prompting Lukoil’s accelerated sale of international assets.
• Geopolitical adjustments to various sanctions regimes: U.S. one-year sanctions waiver for Hungary’s Russian energy imports; U.N. vote lifting sanctions on Syria’s interim leadership; U.S. removal of 2022 sanctions on Milorad Dodik.
• Regulatory and licensing updates: OFSI and OFAC issued multiple Russia-related General Licences, including those covering Lukoil entities, CPC-related operations, correspondent-banking payments, and divestment mechanisms.
• U.S. and UK enforcement activity: OFAC imposed a record US$4.7m penalty for dealings in blocked Russian property; HMRC published a £1.1m compound settlement for Russia-linked export breaches.

GLOBAL SANCTIONS

COLOMBIA

• On 29 October 2025, the U.S. imposed sweeping sanctions on Colombian President Gustavo Petro, his wife Veronica Alcocer, his son Nicolás Petro, and Interior Minister Armando Benedetti. Treasury alleges the administration has “allowed drug cartels to flourish” and obstructed counter-narcotics efforts. The designations freeze U.S.-linked assets and bar U.S. persons from dealings with the listed individuals. This marks the first time the U.S. has sanctioned a sitting Colombian president and comes as the Administration expands its regional counterdrug campaign, including increased maritime interdictions and the deployment of an aircraft carrier to the eastern Pacific.

HAITI

• On 17 October 2025, the U.S. and U.N. jointly sanctioned Dimitri Herard (former head of presidential security) and Kempes Sanon (leader of the Bel Air gang) for supporting the Viv Ansanm coalition, now considered Haiti’s most powerful gang alliance. Herard allegedly provided training and weapons to gang leaders after escaping custody in 2024, while Sanon is accused of extortion, kidnappings, and maintaining networks inside Haitian government institutions enabling him to evade arrest. The U.N. resolution imposes a global asset freeze, travel ban, and an arms embargo, marking one of the most comprehensive multilateral actions targeting Haiti’s gang networks to date.

HUNGARY

• Following a meeting in Washington, the U.S. granted Hungary a one-year exemption from sanctions targeting Russian energy imports. The waiver allows continued deliveries through the TurkStream gas pipeline and the Druzhba oil pipeline, both of which remain central to Hungary’s energy security. As part of the agreement, Hungary committed to purchasing approximately $600 million in U.S. LNG, expanding cooperation on nuclear energy, and increasing procurement of U.S.-made nuclear fuel for the Paks nuclear power plant. The move underscores occasional U.S. flexibility in applying Russia-related sanctions where allies face acute energy vulnerabilities.

LUXEMBOURG

• Senior Advocate Gourab Banerji has been appointed as the claimant-nominated arbitrator in a US$16 billion UNCITRAL investment treaty arbitration brought by Russian businessman Mikhail Fridman against the Grand Duchy of Luxembourg. The claim is brought under the 1989 Russia–Belgium/Luxembourg Bilateral Investment Treaty and challenges Luxembourg’s freezing of Fridman’s assets following his designation under the EU sanctions regime. The tribunal is now fully constituted, chaired by Professor Joongi Kim (Yonsei Law School). Luxembourg has appointed Klaus Sachs (CMS Munich) as its arbitrator. Fridman alleges that the sanctions resulted in the unlawful expropriation of his beneficial interests in ABH Holdings, part of the Alfa Group, and argues that the EU’s assertions regarding his links to the Russian government lack evidentiary basis. The arbitration follows an April 2024 EU General Court ruling that annulled earlier sanctions imposed on Fridman (Feb 2022–Mar 2023) as unjustified, though later EU listings remain in force, continuing to affect his assets.

NIGERIA

• In early November 2025, the Administration designated Nigeria a “country of particular concern” under the International Religious Freedom Act, citing the alleged persecution of Christians and threats from radical armed groups. While this designation does not itself impose sanctions, it authorizes the U.S. to enact penalties such as the suspension of non-humanitarian aid, visa restrictions, and trade measures. Nigeria strongly rejected the allegations, noting that extremist violence in the north affects multiple communities and that the U.S. assessment does not reflect current security dynamics.

NORTH KOREA

• On 4 November 2025, the U.S. sanctioned eight individuals and two firms implicated in laundering cryptocurrency stolen by North Korean state-sponsored hackers. According to Treasury, DPRK cyber operations have diverted over $3 billion in digital assets over the past three years, funneling proceeds into the regime’s nuclear weapons program. The designations target overseas banking representatives operating in China, Russia, and elsewhere, as well as entities managing millions in crypto for sanctioned institutions such as First Credit Bank. The action follows earlier U.S. warnings about North Korean IT workers posing as remote contractors to gain access to U.S. financial systems.

• On 19 November 2025, the listing of Chosun Expo, a North Korean front company associated with the Reconnaissance General Bureau (RGB), was amended under the Russia (Sanctions) (EU Exit) Regulations 2019. The entity is linked to malicious cyber activity including data interference and unauthorised access to information systems.

RUSSIA

• On 19 November 2025, the UK updated its sanctions list under the Cyber (Sanctions) (EU Exit) Regulations 2020, adding Media Land LLC, ML.Cloud LLC, and individuals Alexander Alexandrovich Volosovik, Kirill Andreevich Zatolokin, Yulia Vladimirovna Pankova, and Andrei Valerevich Kozlov. The listings impose asset freezes and director disqualifications on the entities, and travel bans on the individuals. The UK government stated that Media Land has acted as a “bulletproof hosting” provider, supplying resilient server infrastructure that allegedly enabled ransomware operations, phishing, DDoS attacks, and other malicious cyber activities targeting organisations in the UK and allied countries.

• In a coordinated action the same day, the U.S. and Australia also imposed sanctions targeting the same cybercrime infrastructure. OFAC designated Media Land for supporting ransomware operations, along with three members of its leadership, three affiliated companies (including ML.Cloud), and Hypercore Ltd., described as a front company for Aeza Group LLC, another bulletproof hosting provider sanctioned earlier in the year. John K. Hurley, U.S. Under Secretary of the Treasury for Terrorism and Financial Intelligence, said the joint action underscores a “collective commitment to combatting cybercrime and protecting our citizens.”

• On 19 November 2025, the UK Government added Aeza Group LLC to the UK Sanctions List under the Russia (Sanctions) (EU Exit) Regulations 2019. According to the Government, Aeza Group has provided “bulletproof hosting” infrastructure used to support the operations of the Social Design Agency, a Russian state-linked disinformation organisation already designated by the UK in 2024 for activities aimed at destabilising Ukraine and undermining democratic institutions globally.

• On 21 November 2025, the National Crime Agency uncovered a billion-dollar Russian money-laundering network operating across at least 28 UK towns and cities, in an investigation dubbed “Operation Destabilise”. The network converted criminal proceeds and cash into cryptocurrency to facilitate sanctions evasion and Russian military financing. Key actors from the SMART and TGR networks were sanctioned by OFAC in December 2024 after being linked to the acquisition of Kyrgyzstan’s Keremet Bank, which was used to facilitate payments to Russia’s state-owned Promsvyazbank. Russian-Moldovan oligarch Ilan Shor and his sanctioned platform A7 were also tied to the scheme. Operation Destabilise has resulted in 128 arrests and the seizure of over £25 million in the UK, plus $24 million and €2.6 million internationally, significantly restricting Russian-linked laundering networks’ access to Western financial systems.

• On 21 November 2025, following the full implementation of new U.S. sanctions, Lukoil accelerated plans to divest its US$22 billion international portfolio, centred on its 75% stake in Iraq’s West Qurna-2 oilfield. A proposed sale to Gunvor had already collapsed after a 6 November U.S. Treasury statement that the company would “never get a licence” while the conflict continues. The U.S. has now authorised Lukoil to engage alternative bidders until 13 December 2025, with Chevron, ExxonMobil, ADNOC and private-equity firms reportedly evaluating offers. On the same day, Lukoil dissolved the supervisory board of Lukoil International GmbH, leaving managing director Alexander Matytsyn as sole executive. Its trading arm has reduced staff and wound down activity, and Iraq has frozen Lukoil’s revenue share from West Qurna-2.
  

SERBIA

• On 29 October 2025, the U.S. lifted sanctions previously imposed (in 2022) on Milorad Dodik, the former president of Republika Srpska, along with related designations on his family members and a media outlet. The original measures had alleged corruption and efforts to destabilise Bosnia’s post-Dayton political structure. Treasury did not specify its rationale for the reversal, while Dodik publicly called the decision a “moral vindication.”

SYRIA

• On 6 November 2025, the U.S. secured near-unanimous support at the U.N. Security Council to lift sanctions on Syria’s interim president Ahmad al-Sharaa and Interior Minister Anas Hasan Khattab. The timing aligned with al-Sharaa’s 10 November visit to Washington, the first by a Syrian president since 1946. The U.S. framed the vote as recognizing Syria’s “new era” following the fall of Bashar al-Assad in December 2024. Importantly, U.S. domestic sanctions under the Caesar Syria Civilian Protection Act (2019) remain fully in effect and require congressional action for repeal.

VENEZUELA

• On 24 November 2025, the U.S. designated the Venezuelan network known as the Cartel de los Soles as a Foreign Terrorist Organization, characterising the loosely structured group of senior military, intelligence and political figures as engaged in terrorism and narcotrafficking activities that threaten U.S. national security. The designation triggers an asset freeze over any U.S.-linked property, prohibits entry into the United States, bars U.S. persons from dealings with the group, and exposes any actor providing “material support” to potential criminal liability. The move follows long-standing U.S. allegations that Nicolás Maduro and senior officials have used narcotics trafficking to consolidate power and destabilise the region, while Venezuela rejects the network’s existence and calls the designation politically motivated

GLOBAL REGULATIONS/TOOLS UPDATE: OFSI

OFSI UPDATES GUIDANCE ON DIVESTMENT LICENCES INVOLVING RUSSIAN INVESTORS

• On 18 November 2025, OFSI updated its general financial sanctions guidance to clarify the circumstances under which it may issue a divestment licence where a Russian divest investor is involved. Under the updated framework, a UK applicant may acquire an interest in a UK entity that is currently held by a designated person or by the Russian Government provided that the full consideration for the transaction consists solely of a transfer of funds to the designated person or the Russian Government, and additional conditions specified by OFSI are satisfied (e.g., transparency, valuation, reporting). Further guidance can be found here.

CORRESPONDENT BANKING – 2022 BLOCKED PAYMENTS

• On 5 November 2025, OFSI amended and extended the Correspondent Banking – 2022 Blocked Payments General Licence INT/2024/5394840, which permits UK financial institutions to process certain payments originally blocked in 2022 due to the involvement of Russian-designated banks in the payment chain. The update extends the licence’s validity to 7 November 2027 and introduces strengthened reporting obligations, requiring institutions to submit monthly returns to HM Treasury detailing any payments processed under the licence, including amounts, counterparties, payment routes and dates. The amendment also refines the definition of “Designated Credit or Financial Institution,” reinforcing the need for careful screening and documentation when assessing eligibility. For institutions with exposure to Russia-linked correspondent flows, the revised licence provides a continued legal mechanism to resolve legacy blocked payments, but raises the compliance bar through enhanced monitoring and reporting requirements. Further guidance can be found here.

CONTINUATION OF BUSINESS LUKOIL BULGARIA ENTITIES

• On 14 November 2025, OFSI issued a new Russia-related General Licence INT/2025/7895596, permitting the continued operation of specified Lukoil Bulgaria entities, framed as a transitional measure to safeguard regional energy stability. While narrow in scope, this GL is operationally important: it reflects the UK’s continued use of targeted flexibility within the Russia regime, ensuring that sanctions do not unintentionally disrupt European energy markets. It also has practical compliance implications for UK businesses more broadly, particularly banks, insurers, logistics providers and legal advisors, whose screening tools may flag Lukoil Bulgaria as a Russia-linked counterparty. The licence applies to acts otherwise prohibited by the Russia Regulations. This general licence is set to expire on 14 February 2026. Further guidance can be found here.

CONTINUATION OF BUSINESS LUKOIL INTERNATIONAL ENTITIES

• On 27 November 2025, OFSI published General Licence INT/2025/8031092 under the Russia (Sanctions) (EU Exit) Regulations 2019. The licence authorises the continuation of business operations with Lukoil International GmbH (the Vienna-based international arm of Lukoil) and its subsidiaries, activity that would otherwise be prohibited under the Russia sanctions regime.  Alongside the licence, OFSI published FAQ 174, confirming that it is aware of ongoing negotiations relating to the potential sale of PJSC Lukoil’s international assets. The General Licence is valid until 26 February 2026, after which OFSI will consider renewal in light of the progress of those negotiations. Further guidance can be found here.

DESIGNATION OF NEW IRISH REPUBLICAN ARMY (NEW IRA) AND SUSPECTED TERROR FACILITATOR

• On 6 November 2025, OFSI issued an asset freeze against the New Irish Republican Army and an asset freeze and director disqualification against Kieran Gallagher under the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019. This matches the UK’s dedication to stop terrorist financing. Lucy Rigby MP KC, Economic Secretary to the Treasury said this in relation to the sanctions:

• “These designations reflect this government’s continued commitment to protecting the peaceful consensus of the people of Northern Ireland, and to upholding the principles of the Good Friday Agreement in support of the UK’s wider efforts to protect national security for all citizens.” Further guidance can be found here.

GLOBAL REGULATIONS/TOOLS UPDATE: OFAC

OFAC PUBLISHES NEW RUSSIA-RELATED GENERAL LICENSES FOR CPC OPERATIONS, LUKOIL ENTITIES, AND DIVESTMENT ACTIVITIES

• On 14 November 2025, OFAC issued a package of Russia-related general licenses providing narrowly scoped authorisations for otherwise prohibited activities. General License 124B renews and expands authorisations for certain petroleum-related services connected to the Caspian Pipeline Consortium (CPC), Tengizchevroil, and Karachaganak Petroleum Operating projects, ensuring continued operational and safety-critical activities. General License 128A authorises limited transactions involving Lukoil-branded retail service stations located outside the Russian Federation, including routine operations and maintenance. General License 130 permits specific transactions involving designated Lukoil Bulgaria entities to support continuity of fuel supply and essential operations. General License 131 authorises transactions necessary to negotiate and enter into contingent contracts for the divestment of Lukoil International GmbH, as well as activities required for the maintenance and orderly wind-down of the company and its subsidiaries. These measures, published at [here], form part of OFAC’s targeted approach to preserving energy market stability while maintaining core Russia sanctions restriction. Further guidance can be found here

U.S. TREASURY IMPOSES $4.7 MILLION PENALTY AGAINST REAL ESTATE INVESTOR FOR DEALINGS IN BLOCKED RUSSIAN PROPERTY

• On 24 November 2025, OFAC announced a $4.7 million civil penalty against a U.S. real-estate investor who, through an Atlanta-based investment company, willfully mortgaged, renovated, and sold a residential property owned by a Russia-designated individual. OFAC found that the investor proceeded despite clear notice that the property was blocked, including a cease-and-desist letter and a subpoena, resulting in what OFAC characterised as an egregious violation of U.S. sanctions. Treasury highlighted that this is the largest sanctions penalty imposed on an individual to date, underscoring that U.S. persons, including real-estate professionals and private investors, must ensure strict compliance when dealing with property potentially linked to sanctioned parties. Further guidance can be found here.

RECENT CASE STUDY BY HMRC

• On 3 November 2025, HMRC published a case study detailing a £1.1 million compound settlement paid by a UK exporter for making goods available to Russia in breach of the Russia (Sanctions) (EU Exit) Regulations 2019. The case underscores the risks of exporting to third countries where goods may ultimately reach Russia and highlights the importance of understanding when an activity is considered “connected with Russia.” HMRC also clarified the scope of the “making available” prohibitions, reminding firms that sanctions liability can arise even without direct exports to Russia if goods are supplied to Russian-owned or Russia-linked counterparties. Further guidance can be found here.

IN CLOSING

MR’s monthly sanctions update will continue to monitor these developments, providing timely insight into new designations, regulatory reforms, and key enforcement trends shaping the global compliance 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. 

KEY DEVELOPMENTS

• Sanctions on Iran reinstated due to a snapback mechanism incorporated in the Joint Comprehensive Plan of Action (JCPOA).
• 71 people / entities were designated on 29 September 2025.
• New designations on cryptoasset companies related to Russia and companies importing Russian-origin crude oil.
• New Foreign Influence Registration Scheme introduced in July 2025.
• July 2025 judgment: Tonzip Maritime Ltd v 2Rivers PTE Ltd [2025] EWHC 2036 (Comm); appeal outstanding.
• OFSI consultation window shut on 13 October 2025; reforms to be expected.
• UK Sanctions List to become the single authoritative source for UK designations.

IRAN

29 September 2025: UN sanctions on Iran reinstated via snapback mechanism of the JCPOA, the 2015 Iran nuclear deal. This was reinstated following Iran’s repeated breaches of its commitments to the JCPOA, with foreign ministers of the E3 citing Tehran’s refusal to authorise International Atomic Energy Agency (IAEA) inspectors to access Iran’s nuclear sites and the failure to produce a record of Iran’s stockpile of high-enriched uranium as a trigger for the snapback.

29 September 2025: UK issued 71 designations under Iran (Sanctions) (Nuclear) (EU Exit) Regulations 2019 against entities and individuals said to be or have been involved with nuclear weapon development and proliferation in, or for use in, Iran.

RUSSIA

August 2025: UK announced designations on entities and persons operating in the crypto sector. This follows on from the OFSI’s findings that there is an 80-90% probability that cryptoasset firms in the UK have been exposed to Garantex since its 2022 designation. OFSI also reports that it is likely that UK firms have been enabling transfers to Iranian cryptoasset firms linked to designated persons and entities.

12 September 2025: UK introduced 100 new sanctions targeted at Russia’s military sector and shadow fleets. Those sanctioned supply electronics, chemicals, and explosives used to build weapons and missiles.

3 October 2025: The Council for the EU decided to prolong sanctions against those involved in ‘destabilising actions abroad’ by a further year, until 9 October 2026. There was a specific emphasis on Foreign Information Manipulation and Interference (FIMI) against the EU and its partners. The continuation of these restrictive measures is a result of observed behaviour by Russia such as ‘cyber-attacks, acts of sabotage, disruption of critical infrastructure, physical attacks, information manipulation and interference, and other covert or coercive actions’ (Consilium).

24 April 2025: The Russia (Sanctions) (EU Exit) (Amendment) Regulations 2025 took effect. These regulations amended the Russia (Sanctions) (EU Exit) Regulations 2019 and introduced new trade prohibitions and expanded restrictions on exports, imports, and related services in sectors including:

• Chemicals, electronics, machinery, plastics, metals.
• Technology and software transfers, including ‘sectoral software’ (ERP, CRM, industrial design, and software-as-a-service).
• Expanded the schedules in the 2019 regulations, covering:
  • Critical-industry goods & technology.
  • Energy-related goods & technology.
  • Defence & security goods & technology.
  • G7 dependency goods & technology.
  • “Russia’s vulnerable goods & technology.”

KEY SANCTIONS NOTICES

Designation of Entities under Counter-Terrorism Sanctions (25 September 2025)

On 25 September 2025, two entities — Rampage Productions (Unique ID: CTD0007) and Embers of an Empire (Unique ID: CTD0008) — were designated under the Counterterrorism (Sanctions) (EU Exit) Regulations 2019. Both organisations are now subject to an asset freeze due to their involvement in activities linked to terrorism. The designations specifically relate to the promotion, encouragement, and financing of terrorism through extremist music and associated organisations.

UK, EU, and US Escalate Sanctions on Russian Energy Sector (October 2025)

On 15 October 2025, the United Kingdom imposed sanctions on Russia’s two largest oil companies, Rosneft and Lukoil, following earlier sanctions in January against Gazprom Neft and Surgutneftegas, the country’s third- and fourth-largest producers. The UK also extended restrictions to specialised LNG tankers and the Chinese Beihai LNG terminal, tightening control over Russian energy exports. In addition, the UK announced a ban on imports of refined oil products derived from Russian-origin crude oil, even when processed in third countries such as Thailand, Singapore, Turkey, and China. These measures align with broader international efforts to constrain Russia’s energy revenues.

The European Union followed suit on 23 October 2025 with its 19th package of sanctions, banning the import of Russian liquefied natural gas into the EU starting January 2027. Similarly, the US introduced sanctions targeting Rosneft and Lukoil. Collectively, these coordinated actions by the UK, EU, and US mark a significant escalation in energy-related sanctions, intensifying pressure on Russia’s oil and gas sector while reshaping global energy supply chains.

RECENT CASE LAW

Tonzip Maritime Ltd v 2Rivers PTE Ltd [2025] EWHC 2036 (Comm)

A Voyage charter for carriage of oil cargo from Ust Luga/ Primorsk to the Mediterranean was arranged between the two contracting parties. The shipowner, Tonzip, refused to load cargo shipped by Neftisa, believing it to be linked to Mr Mikhail Gutseriev, who is sanctioned under UK and EU policies. This belief stemmed from screening results from Refinitiv/ World-Check, suggesting a historic association or ownership between Neftisa and Mr Gutseriev. As a result, the charterparty was cancelled. Tonzip terminated the contract as a repudiatory breach.

The Commercial Court ruled against Tonzip due to their reliance on the Refinitiv/ World-Check report. Whilst the reports indicated a historic connection between Neftisa and Mr Gutseriev, there was no evidence of current control at the relevant time. Tonzip had not considered contradictory evidence, including a report which showed that Mr Gutseriev had stepped down, and materials which indicated that control had passed. Tonzip’s decision to terminate the charterparty was based on a decision that was deemed speculative, and not objectively reasonable.

This decision emphasises that compliance with sanctions must stem from careful, evidence-based, objectively reasonable decision-making to avoid wrongfully terminating a contract, and thus increasing exposure to damages.

The case is currently subject to an appeal before the Court of Appeal, and further updates will be provided as proceedings develop. A link to the judgment is here.

REGULATION/TOOLS UPDATE

OFSI Updates

On 13 October 2025, the FCDO, OFSI, and HM Treasury confirmed that from 28 January 2026, the UK Sanctions List will be the single authoritative source of UK sanctions designations. The OFSI Consolidated List and accompanying search tool will no longer be updated. This change arises from a cross-government review and industry feedback and is expected to help streamline the sanctions screening process. Further guidance can be found here.

The consultation window for OFSI’s paper closed on 13 October 2025. Whilst the government response is still outstanding, proposed reforms from the consultation paper include:

• Higher maximum penalties: OFSI proposes raising the cap to the greater of £2 million or 100% of the breach value and is seeking feedback on turnover-based or per-breach models.
• Clearer framework & reduced discounts: A new severity-conduct matrix would clarify penalty outcomes, raise baseline penalty ranges, and cap voluntary disclosure discounts at 30%.
• Settlement scheme: Companies could settle cases within 30 business days for an extra 20% discount, waiving appeal rights in exchange for faster resolution.
• Early Account Scheme (EAS): Allows firms to self-investigate and report within six months for a higher (up to 40%) settlement discount, promoting quicker case closure.
• Simplified process for minor breaches: Standard fines of £5k–£10k and shorter 15-day timelines for low-level information or licensing violations.

FOREIGN INFLUENCE REGISTRATION SCHEME (FIRS)

On 1 July 2025, the Foreign Influence Registration Scheme (FIRS) came into force under the National Security Act 2023. The scheme introduces a two-tier system designed to enhance transparency about foreign influence in UK politics. It requires individuals or organisations acting on behalf of foreign powers or entities to register certain activities, ensuring openness about foreign involvement. The two types of activities that may need to be registered are political influence activities and activities carried out under foreign arrangements.

1. Political influence tier
   

If a person or entity is instructed by a foreign power to carry out, or arrange for others to carry out, political influence activities in the UK. The guidance on the political influence tier defines ‘political influence activities’ as activities which meet both criteria:

Criteria 1: The activity is one of the following:

• A communication (for example, an email, letter or meeting) to a senior public official or politician.
• A public communication (for example, the publication or production of an article) except where it is reasonably clear that it is made at the direction of a foreign power (for example, if an article is labelled in a way that makes this fact clear, or if the writer mentions this fact in the article itself).
• The provision of money, goods or services to an individual or entity in the UK (for example, providing consultancy services to a UK business). Activities are only in scope of FIRS if they are carried out in the UK.

Criteria 2: The purpose, or one of the purposes, of the activity is to influence one of the following:

• An election or referendum in the UK.
• A decision of a Minister or Government department (including a Minister or Government department of Wales, Scotland or Northern Ireland).
• The proceedings of a UK registered political party (such as their manifesto commitments).
• A Member of the House of Commons, House of Lords, Northern Ireland Assembly, Scottish Parliament or Senedd Cymru (when acting in their capacity as such).

The communication would have to be made in a UK publication, or intended at an audience in the UK, before it is considered a taking place in the UK.

Further guidance can be found here.

     2. Enhanced tier

If a person or entity is instructed by a specified foreign power or specified foreign power-controlled organisation to carry out, or arrange for others to carry out, ‘relevant activities’ in the UK. The guidance on the enhanced tier defines relevant activities as:

“The default is that “relevant activities” include all activities in the UK. This includes, but is not limited to, commercial activities, research activities and the provision of goods and services (except where this is exempt).“

Under the enhanced tier, the organisations and foreign powers specified are from Russia and Iran.

Lawyers providing legal services are exempt from registering for FIRS. The guidance phrases this exemption as:

“Lawyers, in their provision of legal services to foreign powers (for example, those representing specified foreign powers in a court case)”.

Further guidance can be found here.

CONCLUSION 

There has been a significant tightening of global sanctions regimes, accompanied by increased scrutiny of compliance and transparency obligations. The reinstatement of UN sanctions on Iran, expanded measures targeting Russia’s oil, defence, and crypto sectors, and the introduction of the UK’s Foreign Influence Registration Scheme all highlight an increasingly complex regulatory environment.

MR’s monthly sanctions update will continue to monitor these developments, providing timely insight into new designations, regulatory reforms, and key enforcement trends shaping the global compliance 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. 

The Commercial Court has just announced a new six-month Pilot Practice Direction (available here) to provide further transparency and access to court documents in furtherance of the principle of open justice, a key pillar of the English justice system.

However, the expansiveness of modern litigation means that evidence and written submissions are provided to and read by judges in advance which are not easily accessible to members of the public.

Pilot Practice Direction 51ZH – Access to Public Domain Documents

To address this issue, a pilot Practice Direction 51ZH (“PD 51 ZH”) has been introduced and shall come into force from 1 January 2026 to 31 December 2027. PD51 ZH provides:

• The following categories of documents, unless otherwise ordered by the court, which have been used or referred to at a hearing in public are to be considered “Public Domain Documents”:
• Skeleton arguments
• Written opening submissions and written closing submissions
• Other written submissions provided to a judge and relied upon in the hearing
• Witness statements and affidavits
• Expert reports (including annexes and appendices)
• Any other document critical to the understanding of the hearing ordered by the judge to be a Public Domain Document or any documents agreed by the parties to be Public Domain Documents.
• Such Public Domain Documents are to be made available on CE File, the English Commercial Court’s online filing system to the general public, including non-parties to the litigation.
• Each party has an obligation to file public versions of the Public Domain Documents on CE File within a specified filing period.
• However, the court has the power to make orders modifying the application of PD51 ZH in respect of the publication of a Public Domain Document, known as a Filing Modification Order (“FMO”).

The impact of PD51 ZH

PD 51 ZH modifies the currently prevalent approach where non-parties had to apply to receive documents available with the court. This in turn may give rise to privacy and confidentiality concerns in respect of the level of detail in court filings.

Parties will carefully consider how any publicly available information could impact them. This in turn will lead to a number of FMO applications from parties. However, given the general approach to open justice, it is expected that courts will require strong reasons to allow an application for an FMO.

In practice, parties and legal practitioners will need to be careful about how commercial sensitive material is presented in court filings. Where there is heightened sensitivity towards the public disclosure of information, parties will likely turn towards arbitration and mediation to resolve their disputes. The confidential nature of these dispute resolution mechanisms will prove attractive to such parties.

Where next?

The announcement from the Commercial Court notes that the pilot is expected to run for a period of two years (i.e. from 1 January 2026 to 31 December 2027). Depending on the success of the pilot, it may be expanded to other civil courts in the UK.

If you expect to be, or are already in the Commercial Court, you assess the potential impact PD51 ZH is likely to have on your case. Our team of commercial litigation and arbitration specialists in London are at hand to address any concerns you may have.

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. 

The fashion industry is a global powerhouse of creativity and commerce, but beneath the glamour lies a harsh reality-one of environmental strain and questionable labor practices. From greenhouse gas emissions and chemical waste to exploitative working conditions, fast fashion’s rapid expansion has come at a steep cost. Now, lawmakers in California and New York are pushing back with ambitious legislation designed to hold major fashion brands accountable for their environmental and social impact.

The two bills, California’s Fashion Environmental Accountability Act (CFEAA) and New York’s Fashion Sustainability and Social Accountability Act (NYFSSA), share a common goal-forcing transparency and responsibility in an industry long criticized for its opaque supply chains and inconsistent sustainability efforts. However, they take fundamentally different approaches in their enforcement mechanisms and priorities. If either (or both) become law, the impact on global fashion companies will be profound.

California’s Approach: Environmental Due Diligence and Transparency 

California has long positioned itself as a global leader in climate policy, and the proposed CFEAA follows this tradition by focusing squarely on environmental accountability. Introduced in February 2025, the bill targets large fashion businesses that conduct operations in California. Specifically, it applies to brands with total annual revenues exceeding $1 billion and multi-brand retailers with annual gross receipts over $100 million. The CFEAA, as currently drafted, mandates rigorous environmental due diligence including disclosure of environmental impact, carbon emissions, waste use, and waste, to ensure that major players in the industry are actively working to reduce their ecological footprint.

Key Provisions of the CFEAA 

Under the proposed CFEAA, fashion companies operating in California would be required to comply with strict environmental disclosure and compliance requirements. Beginning in 2026, they would be required to publicly disclose Scope 1 and Scope 2 emissions, which include greenhouse gas emissions from their direct operations and energy consumption. By 2027, the mandate would extend to Scope 3 greenhouse gas emissions, ensuring transparency on the full environmental impact of production, including supply chain emissions. In addition to disclosure, the law would require companies to align their climate goals with the Paris Agreement, setting clear targets for emissions reduction.

Beyond carbon emissions, the CFEAA also seeks to tackle chemical and wastewater management. By 2028, businesses engaged in dyeing, washing, printing, and garment finishing would have to conduct annual wastewater testing to monitor and report chemical discharges, aimed at curbing pollution and mitigating harm to water sources. To further strengthen corporate accountability, the bill calls for annual environmental due diligence reports starting in 2027, requiring companies to assess and disclose risks associated with their operations and supply chains while detailing mitigation strategies.

Failure to comply with the CFEAA regulations would carry significant financial penalties. Companies that do not meet the law’s requirements would face fines of up to 2% of their annual revenue, a considerable deterrent for industry leaders. These penalties would be allocated to the Fashion Environmental Remediation Fund, a state-managed initiative designed to support environmental restoration projects in communities disproportionately affected by fashion industry pollution.

Through this ambitious legislation, California is joining New York in signaling commitment to reshaping the fashion industry, prioritizing sustainability, and enforcing corporate responsibility at an unprecedented scale. However, critics argue that while the CFEAA places strict environmental demands on companies, it does little to address labor conditions and workers’ rights in global supply chains-a notable gap given the ongoing criticism of the industry’s labor related practices.

New York’s Approach: Comprehensive Corporate Responsibility 

The proposed NYFSSA takes a far broader approach than California’s bill. The NYFSSA focuses on more than emissions and environmental disclosures. Instead, the proposed bill also directly targets corporate responsibility across the entire supply chain, including labor practices, wages, and human rights violations.

Originally introduced in 2022, the NYFSSA was reintroduced in 2025 as Senate Bill S4558, and it has gained renewed political momentum. The law would apply to fashion companies with at least $100 million in global revenues that manufacture or sell products in New York-effectively ensuring that nearly every major global fashion brand would be subject to its requirements.

Key Provisions of the NYFSSA 

Under the proposed NYFSSA, fashion companies must map out their entire supply chain and identify, cease, prevent, mitigate and account for actual and potential adverse impacts to human rights and the environment in both their own operations and their supply chain. Unlike the CFEAA, which focuses primarily on environmental disclosures, the NYFSSA additionally requires public disclosure of labor practices, wages, and sourcing policies, ensuring that brands cannot hide unethical business operations behind vague sustainability pledges.

The proposed New York legislation demands robust environmental and social due diligence. Fashion industry companies would be required to set clear climate targets and report on their progress toward emissions reductions, water conservation, and toxic chemical elimination. To prevent greenwashing-the practice of misleading consumers about sustainability efforts-the bill calls for third-party verification of corporate sustainability reports, ensuring that commitments translate into real-world action rather than empty promises.

The NYFSSA calls for fashion companies to adhere to fair wage laws across all levels of production, from textile mills to garment factories, preventing exploitation within their supply chains. Independent audits would be conducted to evaluate working conditions, wages, and hiring practices, ensuring that companies are not engaged in child labor, wage theft, or other undesirable employment practices.

Like its California counterpart, failure to comply with the NYFSSA would come with steep financial consequences. Companies that violate its provisions could face fines of up to 2% of their annual revenues. These funds would be directed to the Fashion Remediation Fund, which would in turn provide worker relief and finance environmental restoration projects in communities disproportionately affected by unethical and unsustainable industry practices.

Through this sweeping legislation, New York is taking an aggressive stance on corporate responsibility. Indeed, New York’s aim seems to be reshaping the fashion industry to foster a more sustainable, ethical and socially responsible fashion ecosystem.

What’s Next? 

Both bills have their challenges. Critics argue that the CFEAA, while groundbreaking in environmental accountability, does not go far enough in addressing supply chain labor issues. Meanwhile, some claim that the NYFSSA is overly ambitious, placing burdensome supply chain requirements on companies that could be difficult to enforce, especially in countries with weak labor laws.

At the same time, major fashion brands and industry groups are pushing back against both laws, arguing that they impose heavy regulatory burdens and would likely increase costs for companies and consumers alike. Not coincidentally, the fast-fashion industry, with its reliance on cheap production models and just-in-time manufacturing, would be hardest hit by the proposed legislation.

Is This a Turning Point for Fashion? 

Despite opposition, both bills reflect a growing trend: lawmakers are no longer allowing fashion brands to self-regulate when it comes to environmental and labor standards. Whether these bills pass in their current form or get watered down, the era of unchecked fashion industry practices, opaque supply chains, and questioned labor practices is coming under scrutiny.

With fast-fashion giants like Shein, Zara, and H&M capturing an increasing share of the $2.5 trillion fashion industry market, the question is not whether regulations will come-but how soon and how strict they ultimately will be. If California and New York succeed, the fashion industry as we know it may never be the same again.

 
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. 

As employers continue to grapple with the impact of the coronavirus pandemic upon the workplace, California’s Division of Occupational Safety and Health (Cal/OSHA) has adopted emergency temporary standards (ETS) that went into effect on November 30, 2020. The ETS, which will last for at least 180 days and are subject to extension, require most California employers to act immediately on several COVID-19-related fronts, including the implementation of written COVID-19 prevention programs that satisfy specific criteria.

Broadly, the ETS compel employers to put in place site-specific plans that address COVID-19 health hazards and correct unsafe or unhealthy conditions in the workplace. In addition, employers in the Golden State must furnish employees with face coverings and, when there are multiple COVID-19 infections or outbreaks at a given worksite, the employer in question must provide COVID-19 testing to employees and notify public health departments. Of note, the ETS also require accurate recordkeeping and reporting of COVID-19 cases.

Compliance With the ETS

Strict compliance with the ETS means that California employers must either (1) develop written standalone COVID-19 Prevention Programs or (2) ensure that the elements of such plans are included in existing Injury and Illness Prevention Programs (IIPP). Whatever the case may be, all of the following must be addressed:

• A system for communicating COVID-19 policies and procedures
• Identification and evaluation of COVID-19 hazards
• Investigation and response to COVID-19 cases in the workplace
• Correction of COVID-19 hazards
• COVID-19-related training and instruction
• Physical distancing
• Face coverings
• Engineering and administrative controls realted to COVID-19
• Personal protective equipment
• COVID-19 reporting and recordkeeping
• Workplace exclusion of employees with or exposed to COVID-19
• Return to work criteria

What Employers May Not Already Be Doing in the Wake of COVID-19

As a practical matter, it is likely that most California employers have many of these protocols (as required under the ETS) already in place. Still, the ETS impose additional and specific obligations that may not be on employer radar screens and could require immediate action. As indicated above, employers must now:

• Offer COVID-19 testing at no cost and during working hours to all employees who may have been exposed to COVID-19 in the workplace
• Exclude from the workplace any employees diagnosed with COVID-19, as well as those who have been exposed to the virus. Exclusion lasts until (1) the excluded employee has not had a fever of 100.4 degrees or higher for at least 24 hours (and that fever resolved without the use of fever-reducing mediations); (2) his or her COVID-19 symptoms have improved; and (3) at least 10 days have passed since the COVID-19 symptoms first appeared. Employees who are not symptomatic but test positive for COVID-19 may not return to work until a minimum of 10 days have passed since the date of the COVID-19 test. In all cases, a negative COVID-19 test shall not be required for an employee to return to work

It is important to emphasize that while any employee is excluded from the workplace due to COVID-19, employers are required to continue and maintain their excluded employee’s earnings, seniority, and benefits.

In the Event of an Outbreak

While somewhat redundant of the foregoing requirements, it is important to shine a light on what an employer needs to do if a workplace experiences an outbreak of COVID-19 (defined as when a local health department identifies a workplace as an outbreak location, or when there are three or more COVID-19 cases in an exposed workplace during a 14-day period). In such a circumstance, employers must:

• Provide testing immediately to all employees during the outbreak period and additional testing one week later
• After the first two COVID-19 tests, provide additional COVID-19 testing of employees who remain at the workplace, at least once per week or more frequently if required by a local health department
• Exclude from the workplace all employees who have tested positive for COVID-19, as well as employees exposed to the virus
• Immediately investigate and determine the possible workplace factors that contributed to the outbreak and take appropriate corrective action
• Document the investigation in accordance with the ETS and notify the local health department accordingly

In the Event of a Major Outbreak

A major COVID-19 outbreak is one involving 20 or more cases within a 30-day period (and lasts until there are no new cases for a 14-day period). Where a major outbreak is in effect, employers must (1) conduct twice-weekly free testing during employee work hours; (2) evaluate and possibly correct onsite ventilation systems; (3) determine the need for respiratory protection programs (or make changes to existing ones); and (4) evaluate whether to halt some or all operations until the COVID-19 hazards have been corrected.

A Final Word on the ETS

In addition to all of the foregoing, the ETS also include mandates related to employee housing and/or motor vehicle transportation to and from work. Rest assured, the employment lawyers at Michelman & Robinson, LLP are available to shed light on these additional requirements, answer any questions you may have about the ETS, and assist in implementing compliant COVID-19 Prevention Programs or IIPPs.

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.

In the world of international disputes, U.S. discovery processes have long been a double-edged sword. On the one hand, they offer an expansive toolkit for fact-finding; on the other, they present significant challenges for arbitration, a mechanism designed for efficiency and privacy. With the recent narrowing of 28 U.S.C. Section 1782-once a powerful tool for parties seeking discovery in aid of arbitration-the landscape for resolving international disputes is evolving rapidly.

For arbitrators, litigants, and practitioners, understanding these changes is critical to navigating discovery in a post-ZF Automotive era.

U.S. Discovery 101

The U.S. discovery process is markedly broader and more expansive compared to other countries, making it a unique feature of its civil litigation system. Unlike many jurisdictions where judges oversee and control evidence-gathering, U.S. lawyers conduct discovery with significant autonomy, including taking oral depositions and requesting extensive document production. The scope of discovery is broad, allowing parties to request any information that might lead to admissible evidence, even if it establishes liability against the producing party-a concept often restricted in other systems. For instance, while U.S. lawyers can compel the opposing party to produce incriminating documents, many civil law countries limit discovery to evidence supporting a party’s own case and assign judges a gatekeeping role. Additionally, the U.S. heavily incorporates electronic discovery (e-discovery), requiring the production of electronically stored information like emails and metadata, a process less common or developed abroad. While this liberal approach promotes transparency and thorough preparation, it also significantly increases costs and complexity, contrasting with the more streamlined, judge-controlled discovery processes in other jurisdictions, which prioritize efficiency and cost reduction.

The Power-and Limits-of U.S. Discovery in International Disputes

U.S. discovery is renowned for its breadth and reach, allowing parties to compel testimony, request documents, and unearth evidence that can make or break a case. This expansive approach stands in stark contrast to the narrower discovery mechanisms found in many other legal systems, making U.S. courts an attractive venue for obtaining information, even for disputes rooted outside their borders.

Section 1782 of the U.S. Code historically facilitated this by allowing litigants in foreign or international proceedings to petition U.S. federal courts for discovery. Its appeal lay in the ability to access U.S.-based evidence without the cumbersome procedures of diplomatic letters rogatory. Over time, it became a favored tool for international arbitrations as well.

But the U.S. Supreme Court’s 2022 decision in ZF Automotive US v. Luxshare, Ltd. marked a pivotal shift. By ruling that Section 1782 only applies to tribunals “imbued with governmental authority,” the Court excluded private arbitration panels from its scope. This decision left many questions about where discovery for international arbitration stands now.

The Arbitration Conundrum Post-ZF Automotive

Arbitration thrives on principles of efficiency, confidentiality, and party autonomy. The decision in ZF Automotive reinforced the idea that arbitration, as a private dispute resolution mechanism, should not be subject to the broad, court-supervised discovery processes typically reserved for public tribunals. While this aligns with arbitration’s ethos, it presents challenges for parties who rely on U.S. evidence to support their claims.

For example, multinational companies often hold critical evidence within U.S. jurisdictions-documents, financial records, or emails crucial to the outcome of an arbitration. The narrowing of Section 1782 means parties must now look elsewhere to access such evidence.

The State Court Solution: New York and California Leading the Way

Although federal courts have restricted the use of Section 1782, state courts in New York and California provide alternative avenues for discovery. Both states allow pre-complaint discovery in aid of arbitration, albeit under stricter conditions than federal courts once offered.

• New York: Rule 3102(c) of the Civil Practice Law and Rules permits pre-complaint discovery to aid arbitration when a party can demonstrate necessity or “extraordinary circumstances.” For example, New York courts have ordered discovery to preserve evidence critical to an overseas arbitration, recognizing its potential impact on the arbitral process.
• California: The state’s Civil Procedure Code under Title 9.3 allows parties to request discovery assistance from state courts, provided the arbitral tribunal approves. This process ensures that state courts complement, rather than interfere with, arbitration proceedings.

For parties who can satisfy these requirements, state court discovery provides a valuable lifeline.

Despite these options, discovery in aid of arbitration remains inconsistent across the U.S. Most states lack explicit provisions allowing courts to assist with arbitration discovery. In some cases, statutes have been repealed or intentionally exclude arbitration. For example:

• Pennsylvania: Repealed its discovery provision for foreign tribunals, including arbitrations, in 2012.
• Texas and Florida: Allow pre-complaint discovery to preserve testimony for court cases but make no mention of arbitration, reflecting a broader reluctance to intervene in private dispute mechanisms.

This patchwork of rules may cause uncertainty for international litigants, underscoring the importance of understanding jurisdiction-specific discovery laws.

The Way Forward for International Arbitration

As parties adapt to the post-ZF Automotive landscape, strategic solutions are essential for overcoming discovery challenges. Here’s how arbitration practitioners can navigate this evolving terrain:

Leverage State Courts Where Possible

Familiarity with state-specific rules, particularly in arbitration-friendly jurisdictions like New York and California, is crucial for accessing U.S.-based evidence. Both states allow pre-complaint discovery in support of arbitration under specific circumstances, offering a valuable alternative when federal courts are unavailable.

Draft Tailored Arbitration Agreements

Parties should proactively address discovery needs during contract negotiations by including tailored provisions for evidence gathering. For example, specifying mechanisms for document production or interim relief can prevent uncertainty and reliance on judicial interpretation.

Explore Parallel Litigation Applications

Parallel litigation can be a powerful tool for parties seeking interim relief or addressing discovery challenges in arbitration. Courts can provide remedies that arbitral tribunals may lack the authority to enforce, offering a practical solution for preserving rights and securing compliance. For instance:

Preliminary Injunctions: These orders can prevent the destruction of evidence or ensure that critical information remains available for arbitration proceedings.

Attachments and Freezing Orders: These measures secure assets or preserve evidence at risk of being hidden or dissipated before a tribunal can act.

Pursue Alternative Evidence Sources

When U.S.-based discovery is unavailable or restricted, parties should explore other avenues, such as:

• Letters Rogatory: Requesting judicial assistance through diplomatic channels to obtain evidence from foreign jurisdictions.
• Arbitral Tribunal Orders: Seeking evidence directly under the procedural rules of the arbitration institution or tribunal.

These methods may require careful navigation of cross-border legal systems but can yield critical results when local discovery options are insufficient.

Monitor Evolving Case Law

The interpretation of Section 1782 and related discovery rules continues to evolve. For example, courts are clarifying the boundaries of what constitutes a “tribunal imbued with governmental authority.” Staying informed about these developments is essential to identify emerging opportunities or mitigate risks.

Conclusion

The restrictions imposed by ZF Automotive have reshaped the discovery landscape for international arbitration, but they also invite innovative strategies. By leveraging state courts, drafting robust arbitration agreements, employing parallel litigation for interim relief, and exploring alternative evidence sources, parties can adapt effectively to these challenges.

The key to success lies in a proactive and adaptable approach. International arbitration remains a cornerstone of global dispute resolution, and practitioners who navigate these evolving dynamics skillfully will ensure that their clients are well-positioned in any forum.

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.