The Sanctions Update, compiled by attorneys from Steptoe's award-winning International Regulatory Compliance team and the Stepwise: Risk Outlook editorial team, publishes every Monday. Guided by the expertise of Steptoe's industry-leading IRC team, the Sanctions Update compiles and contextualizes weekly developments in international regulatory enforcement and compliance, as well as offers insights on geopolitical context, business impacts, and forthcoming risks.
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The Lede
Sanctions Pressure Mounts on Rwanda as DRC Presents Minerals-for-Security Deal
Over the last several weeks, sanctions pressure on Rwanda has grown over its support of the M23 rebel group currently seeking to control large swaths of the Democratic Republic of the Congo's (DRC) eastern provinces. Last week, the EU approved sanctions on several Rwandan military officers and M23 leaders, including three generals in Rwanda's military, M23's political head and intelligence chief, and a gold refinery accused of processing gold illegally extracted from Congolese territory. The long-awaited sanctions—the list was initially proposed in February, but snagged on Luxembourgish calls to wait for regional diplomacy to progress—build upon earlier efforts in Brussels, London, Washington and other Western capitals to constrain Kigali, including the suspension of an EU-Rwanda critical mineral deal, pausing of various UK-Rwanda bilateral programs (including financial aid, some military export licenses, and trade promotion activity), and US and UK sanctions on several Rwandan and M23 leaders.
Sanctions appear to have had some diplomatic impact, at the very least frustrating Kigali. In the wake of last week's EU sanctions, Rwanda cut ties with Belgium, one of the strongest proponents of penalizing the country for its involvement with the conflict in the DRC, and expelled Belgian diplomats from the country. Kigali denounced the sanctions regime more broadly as well, with Foreign Minister James Kabarebe saying in February that international sanctions would only reduce incentives for the country to engage in bilateral peace talks. However, Kigali did announce a surprise ceasefire with Kinshasa at an unannounced summit last week—although there are significant doubts that it will have any effect given that M23, the primary combatants, were not involved.
Beyond isolating Rwanda's leadership, last week's sanctions on Gasabo Gold Refinery—one of the country's main refining facilities—could have a significant impact on the country's growing refining industry. Developing the mining refinery sector in Rwanda has been a key goal in Kigali in recent years as the Kagame administration seeks to expand revenues from Rwanda's already large mining industry by allowing miners to export refined products at a higher cost. In 2023, gold exports amounted to $885 million and constituted the country's top export. While last week's sanctions are targeted solely to Gasabo Gold Refinery, there is a broader reconsideration of the EU-Rwanda critical minerals MOU and a worry that Rwandan gold in general could be branded "conflict resources"—a classification that could make it difficult to sell on the global market.
Rising pressure on the Rwandan mining industry comes as DRC is also seeking to leverage its critical minerals industry to entice further Western involvement and potentially fill a gap left by newly banned Rwandan resources. Last week, it was reported that the DRC had put a concrete deal on the table for the US: help Kinshasa defeat the M23 rebels contesting the country's east and receive access to one of the world's richest deposits of critical minerals. The deal could be deeply attractive to the US: the US and other Western countries are increasingly playing catch-up to China in establishing steady access to the critical minerals that are crucial to the high-tech supply chain that is a strategic and economic imperative for the US and its allies. The clear-cut deal may also appeal to President Trump's transactional foreign policy doctrine, despite his longstanding distaste for entangling the US in foreign conflicts. US President Trump seems to have shown interest in the deal, appointing Massad Boulos, the father-in-law of Tiffany Trump and a businessman with car trading experience in the Nigerian market, as the new presidential envoy responsible for exploring a deal. If the US were to accept a deal, it would likely come at the expense of its current cooperation with Rwanda against regional threats like al-Shabaab—potentially restructuring the regional security architecture.
However, China already dominates the Congolese mining industry—especially its crucial cobalt trade—and it may be difficult for Kinshasa to live up to promises to grant Washington privileged access. Five of the ten largest cobalt mines in the world (all located in the DRC) are owned by Chinese firms, and Congolese cobalt accounts for some 70% of cobalt processed by Chinese refineries (which themselves provide between 60 and 90% of the world's cobalt supply). While the DRC has recently pushed to reduce Chinese influence, pushing forward new plans to build cobalt refineries in-country and repeatedly blocking the proposed sale of state miner Gecamines to a Chinese firm, its desire or ability to limit Chinese investment in its single largest revenue stream may be more limited than it would initially present. Moreover, there are currently no American mining firms that currently operate in the DRC and would be capable of replacing China's presence, at least in the short term.
US Developments
The Treasury Department Removes Tornado Cash from Sanctions List
The Department of the TreasuryremovedTornado Cash, a digital asset mixer, from the Specially Designated Nationals and Blocked Persons List (SDN List). Treasury announced that the removal was based on the Trump administration's review of the "novel legal and policy issues raised by use of financial sanctions against financial and commercial activity occurring within evolving technology and legal environments[.]" The delisting follows a ruling in the Fifth Circuit on November 26, 2024 that the Office of Foreign Assets Control (OFAC) exceeded its statutory authority by designating Tornado Cash. OFAC's initial designation of Tornado Cash was the first time it had targeted an on-chain decentralized protocol.
Tornado Cash was previously sanctioned on August 8, 2022 for allegedly facilitating money laundering by the North Korea-backed Lazarus Group. The Treasury Department noted that it remains "deeply concerned" about North Korea's efforts to steal and utilize digital assets. Treasury said it "will continue to monitor closely any transactions that may benefit malicious cyber actors or [North Korea]" and warned that US persons "should exercise caution before engaging in transactions that present such risks." Secretary of the Treasury Scott Bessent said preventing abuse by North Korea and other illicit actors is "essential" to ensuring that Americans can benefit from "financial innovation and inclusion."
Treasury Secretary Reiterates Potential for Increase of Russian Sanctions
During an interview with Fox Business, Bessent stated that President Trump has instructed him to increase US sanctions on Russia "to a ten" if it would bring President Vladimir Putin to the negotiating table. While Bessent quickly followed that he is optimistic that such measures are not necessary, he asserted that "all options are on the table," including "maximum energy sanctions on Russia."
Bessent's remarks are yet another indication of the Trump administration's stated willingness to increase sanctions on Russia if that would bring an end to the war in Ukraine. Though they were made before Trump's call with Putin—during which Putin agreed to a partial ceasefire on energy infrastructure—Bessent's statements hint at the severity of potential sanctions in the event negotiations sour. Bessent described former President Biden's final energy sanctions package on Russia as escalating US sanctions "from a three to a six," which suggests that the Trump administration is considering energy-related sanctions significantly greater in scope in the event negotiations fail.
US Extends Sanctions Waivers on Russian Gas Payments for Türkiye, Slovakia, and Hungary
The US has reportedly granted Türkiye, Slovakia, and Hungary an extension on their waivers for gas payments to Russia. The waivers, which are now set to expire in May, were initially granted by the US nearly one month after its designation of Gazprombank. All three countries rely on Gazprombank for processing energy-related transactions, specifically those dealing with the TurkStream pipeline. The Trump administration granted these waivers despite its recent statements about potentially tightening Russian energy sanctions pending the outcome of negotiations on Ukraine.
Venezuela Resumes Accepting Repatriation Flights After Threat of US Sanctions
In a post to X, Secretary of State Marco Rubio warned Venezuela of "new, severe, and escalating sanctions" if it does not accept a consistent flow of deportation flights. Rubio's comments were an indication of the Trump administration's position on Venezuela and its willingness to impose financial penalties on countries to further its domestic agenda. Several days after Rubio's announcement, the Venezuelan government said it would resume accepting the repatriation of Venezuelans from the United States, and the first such flight carrying migrants is reported to have taken place.
These developments come as the Trump administration reportedly weighs a plan to impose tariffs or other financial penalties on countries that purchase oil from Venezuela, while at the same time extending a license for Chevron, an American energy company, to operate in the country. President Trump previously announced via a post to Truth Social on February 26, 2025 that the license previously granted by the Biden administration would not be extended due to Venezuela's lack of electoral reform and failure to accept Venezuelan deportees. It was replaced by a new license, General License 41A, "Authorizing the Wind Down of Certain Transactions Related to Chevron Corporation's Joint Ventures in Venezuela," which is set to expire on April 3, 2025. The Trump administration is considering an extension of the license for at least 60 days, although Rubio and other cabinet members critical of Venezuelan President Nicolás Maduro have reportedly voiced opposition to the proposed extension.
US Increases Pressure on Iran with New Sanctions
OFAC has designated 19 individuals, entities, and vessels, including a "teapot" refinery in China, for their alleged connection with the illicit trade of Iranian oil. On the same day as OFAC's announcement, the Department of State sanctioned one crude oil and petroleum products storage terminal in China for allegedly receiving and storing Iranian crude oil from a previously designated tanker.
OFAC's designations are the fourth tranche of Iranian oil-related sanctions under the Trump administration's National Security Presidential Memorandum (NSPM-2), which reimposes "maximum pressure" on Iran and purports, among other things, to "drive Iran's export of oil to zero, including exports of Iranian crude to the People's Republic of China."
The sanctions also come at the same time the Trump administration has reportedly told the Iranian Supreme Leader, Ayatollah Khomeini, that Tehran has a two-month deadline to reach an agreement with Washington on its nuclear program. As we covered in previous weeks, President Trump is likely to continue targeting Iran's oil trade as a means of both cutting off revenue streams that fund terrorist proxies in the Middle East and building leverage for nuclear talks.
Treasury Publishes Alert on International Cartels
OFAC issued an alert entitled International Cartels Designated as Foreign Terrorist Organizations and Specially Designated Global Terrorists, which highlights civil and criminal liability risks for US and foreign financial institutions and others with exposure to cartels and transnational criminal organizations recently designated as Foreign Terrorist Organizations (FTOs) or Specially Designated Global Terrorists (SDGTs). The alert highlights prior OFAC actions and speaks generally to the risk of dealing with sanctioned cartels and organizations, but does not provide significant new guidance. Its publication suggests that enforcement of cartel-related sanctions is likely to be a top priority for OFAC under the Trump administration. The alert states it is part of the administration's broader efforts to combat cartels as detailed in Trump's January 20, 2025Executive Order entitled Designating Cartels and Other Organizations as Foreign Terrorist Organizations and Specially Designated Global Terrorists.
In a related action, OFAC sanctioned Jumilca Sandivel Hernandez Perez, allegedly a key leader of the Guatemala-based Lopez Human Smuggling Organization (HSO).
State Department Imposes Visa Restrictions on Thai Officials
The Department of State has announced a new visa restriction policy on current or former Thai government officials "responsible for, or complicit in, the forced return of Uyghurs or members of other ethnic or religious groups with protection concerns to China." In the press release, Secretary of State Marco Rubio noted that he would immediately use this authority to target the Thai officials allegedly responsible for or otherwise complicit in the forced return of approximately 40 Uyghurs to China on or around February 27, 2025. Thai government officials visited China's northwestern Xinjiang region shortly after the State Department's announcement in order to assuage fears that the deported Uyghurs were being mistreated, but the US government has yet to respond to the gesture.
UK Developments
Increased UK and EU Collaboration Focuses on Ukraine, Russian Hybrid Threats and Defence Spending
The UK Foreign and Defence Secretaries recently met with the EU's High Representative for Foreign Affairs, Kaja Kallas, to discuss ways to increase pressure on Russia's economy, coordinate cooperation on Ukraine, and increase action against hybrid threats such as cyberattacks, election interference, and disinformation.The talks reflect the UK's commitment to strengthen ties with Europe and work together to ensure security and prosperity for the region.The talks also included discussion of European efforts to boost defence spending, including through innovative initiatives and bolstering wider military readiness in support of NATO.The talks build on increased UK engagement with the EU in recent months.Prior to the first UK-EU Summit in May 2025 and the UK-hosted Berlin Process Summit later this year, the discussions are also expected to include other areas of cooperation such as stability in the Western Balkans, where both the UK and EU play a leading role in maintaining peace and security.
OFSI Publishes Monetary Penalty Against Law Firm Subsidiary for Breaches of Russia Sanctions Regime
OFSI has issued a civil monetary penalty against the law firm Herbert Smith Freehills CIS LLP ("HSF Moscow") in the amount of £465,000 for breaches of UK Russia financial sanctions. The monetary penalty relates to six payments made by HSF Moscow with a collective value of £3,932,392.10 to UK designated persons (i.e., Alfa-Bank JSC, PJSC Sovcombank, and PJSC Sberbank).The payments took place over a period of seven days as the firm wound down its Russian offices.The OFSI enforcement action highlights OFSI's focus on enforcement of financial sanctions and contains the following important compliance lessons, which have broader application beyond the legal sector.First, companies must understand their exposure to sanctions risks and take appropriate steps to address them. Second, it is crucial that companies' sanctions compliance policies and procedures are adhered to.Third, careful consideration should be given to the ownership and control structures of counterparties to allow an accurate assessment of the application of asset freezes and making available sanctions to transactions.
OFSI Publishes Annual Review on UK Sanctions on Russia
OFSI has published its annual review for 2023 – 2024, which highlights a number of key trends, including an increased focus on enforcement of financial sanctions breaches across a range of sectors.With respect to enforcement, the report underscores OFSI's increased focus on the enforcement of UK financial sanctions, a trend that is likely to continue in the year ahead. In particular, OFSI has significantly increased headcount within its enforcement team during the reporting period, resulting in the accelerated investigation and enforcement of financial sanctions breaches. 242 enforcement cases were closed by OFSI during the reporting period, which represented a tripling in the number of cases closed compared to the previous year.Of those cases, approximately 20% resulted in some form of enforcement action, whether a financial penalty, details of the breach (including the name of the party in breach) being disclosed publicly, or issuance of a warning letter.The report also highlights OFSI's increased focus on intelligence gathering and the proactive investigation of financial sanctions breaches, a development that increases the likelihood of OFSI becoming aware of breaches of UK financial sanctions, even in circumstances where they are not voluntarily self-disclosed.
EU Developments
EU Council Adds Al Azaim Media Foundation to Sanctions List
The EU Council has recently added Al Azaim Media Foundation, the media wing of the Islamic State-Khorasan Province, to the EU's autonomous sanctions list targeting ISIL (Da'esh) and Al-Qaeda affiliates. The Al Azaim Media Foundation is actively involved in recruiting members, disseminating extremist ideologies, and promoting acts of terrorism. This update brings the list to a total of 15 individuals and 7 groups. Those included are subject to asset freezes and a ban on EU entities from providing financial support or economic resources to them. Additionally, travel bans are imposed on the listed individuals. These sanctions have recently been extended until 31 October 2025.
EU Council Imposes Sanctions on Individuals and Entity Linked to DRC Human Rights Violations
On 17 March 2025, the EU Council imposed restrictive measures on nine individuals and one entity responsible for serious human rights violations and abuses in the Democratic Republic of the Congo (DRC). Earlier in 2025, clashes between the Rwanda-backed M23 rebels and Congolese security forces escalated, leading to the capture of Goma and Bukavu by the group in the eastern part of the country. Rwanda and the DRC announced a surprise ceasefire agreement last week, but the conflict is unlikely to be impacted as the M23 rebels were not party to the deal and have denounced any pause in fighting. The Council's measures target those sustaining the armed conflict and exploiting natural resources through illicit trade. On the same day the Council imposed the sanctions, Rwanda announced its decision to sever diplomatic ties with Belgium. Kigali reportedly believes that Belgium has taken a stance against Rwanda in its conflict with the DRC, as Belgium has been an advocate for the sanctions.
Among those listed are five senior leaders of the M23 armed group, including President Bertrand Bisimwa, and three senior officers of the Rwanda Defence Force (RDF). Additionally, Francis Kamanzi, CEO of the Rwanda Mines, Petroleum and Gas Board, and the entity Gasabo Gold Refinery have been sanctioned for their roles in exploiting conflict minerals. The sanctions include a travel ban, asset freeze, and prohibition on EU citizens and companies from providing funds to the designated individuals and the entity. This brings the total to 32 individuals and 2 entities under EU sanctions related to the DRC.
Third Countries Align with EU's 16th Sanctions Package Against Russia
The High Representative of the EU has announced that Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Montenegro, North Macedonia, Norway, the Republic of Moldova, and Ukraine have aligned themselves with several Council decisions, including those within the 16th sanctions package. Specifically, these countries have aligned with Decision 2025/338, which renews the sanctions regarding certain non-government controlled areas of Ukraine, extending until 24 February 2026.
Additionally, these countries have aligned themselves with Council Decisions 2025/397, 2025/396, 2025/394, and 2025/391, all of which are part of the 16th sanctions package. For more information on the content of these decisions, please see our blog post here. These countries, including EU candidate nations, have regularly aligned themselves with EU sanctions against Russia.
EU Commission Updates FAQs Clarifying 16thSanctions Package Provision
The latest 16th package of Russian sanctions introduced a new full transaction ban on specific Russian ports, locks and airports. These infrastructures include two Moscow airports, four regional airports and several ports. The European Commission has updated its sanctions FAQ on Article 5ae of Council Regulation 833/2014, providing key clarifications. These include details on the scope of prohibited transactions with listed Russian ports and airports, specific exemptions allowed, and the application of these rules to EU-flagged vessels and third-country transactions. The update also clarifies indirect transaction scenarios and the reporting requirements for EU operators engaging in exempt transactions.
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