The global sanctions landscape has undergone more structural change in the past 18 months than in any comparable period since the post-2014 measures that followed Russia’s annexation of Crimea, and compliance teams at multinational firms are grappling with the consequences of operating within three regulatory regimes that are broadly aligned in objective but increasingly divergent in their detailed mechanics.
The UK’s Office of Financial Sanctions Implementation, the US Office of Foreign Assets Control, and the EU’s consolidated sanctions framework are each moving at different speeds and issuing guidance that does not always translate cleanly across jurisdictions.
The most recent and consequential development in the UK came on 11 May 2026, when the government announced a new package of sanctions targeting 85 individuals and entities connected to Russia’s hostile activities. The package included designations of individuals linked to propaganda and influence operations as well as those responsible for policies aimed at undermining democratic processes abroad, including those connected to the forced deportation and indoctrination of Ukrainian children. The breadth of the designations, which extended beyond traditional financial actors into information warfare and governance sectors, signals a widening of the UK sanctions toolkit that compliance teams at media companies, technology platforms, and public relations firms will need to assess carefully.
On the US side, OFAC issued General Licence 131E on 29 April 2026, extending authorisation for certain transactions linked to the sale of Lukoil International until 30 May 2026. The licence permits steps needed to negotiate and enter into a sale agreement, with completion remaining subject to separate OFAC approval. Critically, the licence does not authorise transfers of funds to persons or accounts in Russia, meaning that even legitimate deal activity must be structured with considerable precision to avoid inadvertent sanctions breach. Energy sector firms including Shell, BP, and TotalEnergies, all of which have navigated complex unwinding processes from Russian assets since 2022, will be tracking the evolution of that licence closely.
The EU has continued its own sanctions expansion through 20 successive packages targeting Russia and Belarus, with the most recent package provoking retaliatory travel restrictions from the Russian Foreign Ministry, which expanded its entry ban to cover representatives of EU institutions, member state governments, civil society activists, academics, and parliamentarians deemed to have supported resolutions viewed as hostile. The escalating tit-for-tat dynamic between Brussels and Moscow is creating genuine operational complications for multinationals with personnel who travel regularly to Russia for legitimate humanitarian or legal purposes.
Interpretation of asset freeze provisions has also become more technically demanding following updated EU consolidated guidance published in May 2026. The guidance confirmed that asset freezes cover all rights attached to shares, including voting rights, which must be fully suspended. It further confirmed that only listed persons are directly subject to asset freezes but that these measures can indirectly apply to non-listed entities owned or controlled by listed persons, subject to a case-by-case assessment. For private equity firms, hedge funds, and institutional investors with complex ownership structures involving Russian-connected entities, the guidance materially raises the standard of due diligence required before any corporate action involving affected shares.
The UK US Financial Regulatory Working Group, which held its 12th official meeting in Washington DC in February 2026 with senior officials from HM Treasury, the Federal Reserve, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the SEC, the Bank of England, and the FCA, discussed digital assets and regulatory modernisation alongside financial stability themes. The group emphasised close ongoing bilateral cooperation and announced that the Transatlantic Taskforce for Markets of the Future would report back to both Treasuries with recommendations via the Working Group in summer 2026. The group plans to reconvene formally that summer to continue its biannual dialogue. The inclusion of digital assets in that agenda is significant: stablecoin regulation, cross-border crypto flows, and the intersection of decentralised finance with sanctions compliance are all areas where bilateral coordination could meaningfully affect the compliance obligations of firms operating across both markets.
For compliance practitioners, the key operational challenge created by the current sanctions environment is the risk of circumvention. UK guidance from OFSI emphasises that compliance leads must be trained to identify common red flag indicators including inconsistencies relating to the product, the customer, the transaction, and the export destination. Training content must be regularly reviewed and updated to reflect current regulatory and geographical developments. Firms that operated with relatively static sanctions screening programmes before 2022 have found those programmes structurally inadequate for a compliance environment in which designation lists are updated frequently and new categories of actor, from influence operatives to academic institutions, are being brought within scope.
The interplay between sanctions compliance and anti-money laundering obligations adds another layer of complexity. Firms including Standard Chartered, Deutsche Bank, and HSBC have all faced enforcement actions in prior years that combined AML failings with sanctions exposure, demonstrating that the two regimes operate in close proximity and that gaps in one area tend to create vulnerabilities in the other. Under the UK’s Economic Crime and Corporate Transparency Act, the trajectory is clearly toward mandatory risk-based due diligence, with the UK government’s September 2025 review of responsible business conduct examining the effectiveness of existing measures including section 54 of the Modern Slavery Act alongside broader supply chain obligations.
The Steptoe legal team has observed that organisations assessing their sanctions and responsible business conduct programmes need to account for overlapping regulatory requirements in specific member states and jurisdictions outside the EU, and to identify where compliance efficiencies can be leveraged across multiple frameworks simultaneously rather than addressing each regime in isolation.
The combination of the UK’s expanding sanctions toolkit, OFAC’s granular general licence conditions, and the EU’s increasingly technical asset freeze guidance means that the margin for error in sanctions compliance is narrowing significantly. For financial institutions, commodity traders, professional services firms, and technology companies with any exposure to Russian-connected transactions or entities, the period between now and the end of 2026 represents a critical window in which to stress-test existing compliance frameworks against a regulatory landscape that shows no signs of stabilising.
