The evolving geopolitical landscape has created a complex and increasingly restrictive environment for global sanctions compliance, especially concerning Russia, Iran, and Syria. The European Union's latest sanctions against Russia intensify scrutiny on defense, energy, and financial sectors, while efforts to combat sanctions evasion, particularly through maritime operations like "shadow fleets," are at the forefront. Meanwhile, the U.S. has tightened restrictions on Iran’s oil trade, and Syria has seen selective sanctions relief to support humanitarian aid. The Court of Justice of the European Union (CJEU) has further shaped compliance standards, offering guidance on country-of-origin rules and screening practices.  

This article explores the EU's new sanctions package, enforcement challenges, and emerging measures, such as proposed bans on Russian LNG and stricter maritime regulations, highlighting the growing complexity for businesses navigating these sanctions and the evolving role of global enforcement bodies.

This article is written by Kristi Rutgers ([email protected]) and Lorena Velo ([email protected]) Kristi and Lorena are part of RSM Netherlands Business Consulting Services, specifically focusing on International Trade and Strategy.  

Recent developments for Russian sanctions

EU Parliament Russian Sanctions Package Report – EU Sanctions against Russia 2025: State of play, perspectives and challenges    

The European Parliament published a report relating to the EU sanctions against Russia for 2025, covering enforcement, anti-circumvention measures, and sector-specific restrictions. Since 2022, the EU has implemented 16 sanction packages targeting Russian enlites, financial institutions, and key industries. The report identified that one of the primary difficulties is the rerouting of sanctioned goods through third countries such as Kazakhstan, Türkiye, and the United Arab Emirates. These nations serve as key intermediaries, allowing restricted items to ultimately reach Russia, despite direct bans. In response, the EU has implemented contractual clauses prohibiting re-exportation to Russia and imposed targeted sanctions on entities suspected of facilitating circumvention. However, enforcement remains difficult due to the complexity of international trade networks and the ability of companies to conceal transactions. Another major hurdle is Russia’s so-called "shadow fleet," with its implications of Russian as reflected in this article (please refer to paragraph: ‘European Parliaments briefing: Russia’s ‘shadow fleet’: Bringing the threat to light’).  

Looking ahead, the EU is considering additional measures to tighten its grip on sanctions enforcement in 2025. These could include a complete ban on Russian liquefied natural gas (LNG) imports and stricter enforcement of existing oil sanctions, as well as extending bans to Russian aluminum, nickel, and fertilizers. Increased tariffs on remaining imports are also under discussion. Another significant proposal involves utilizing interest earned on frozen Russian central bank reserves to support Ukraine’s military and reconstruction efforts. Additionally, there are calls for the establishment of an EU-level body next to the U.S. Office of Foreign Assets Control (OFAC), which would centralize and streamline sanctions enforcement to enhance efficiency. While these measures would strengthen the sanctions regime, they will likely face continued resistance, both from Russia’s evasive tactics and from businesses and countries reluctant to fully sever economic ties.

EU 16th Russian Sanctions Package    

The EU’s 16th sanctions package against Russia targets 48 individuals and 35 entities undermining Ukraine’s territorial integrity, sovereignty and independence. This decision increases pressure on Russia’s military and defense sectors by sanctioning arms manufacturers and technology firms. The EU imposed full sanctions on three entities transporting Russian crude oil, generating substantial revenue for the Russian government.

Within the new Russian sanctions package, the EU is targeting entities facilitating sanctions evasion through cryptocurrency exchanges and third-country intermediaries, as well as actors supporting Russia’s war effort. The measures also extend to Russian propaganda networks, the energy sector, politicians in occupied Ukrainian regions, and individuals involved in the forced transfer of Ukrainian children. With these additions, EU restrictive measures now apply to over 2,400 individuals and entities.

Sector-specific updates: EU Parliament’s report on the shadow fleet and OFAC guidance on maritime  

European Parliaments briefing: Russia’s ‘shadow fleet’: Bringing the threat to light    

Next to the 16th sanctions package and report, the European Parliament published a briefing relating to sector specific measures regarding Russian ‘shadow fleets’. The term refers to a fleet of vessels engaged in practices designed to circumvent international sanctions. These vessels, sometimes labeled as “dark” or “grey” fleets refer to ships that engage in illegal operations for the purpose of circumventing sanctions, evade compliance with safety and environmental regulations, avoid insurance costs and other illicit activities, such as, intentionally switching of their automatic identification systems (AIS) or broadcasting false position signals to hide their movements.  

The European Parliament recommends flag states to enforce AIS regulations to prevent blackouts and spoofing, particularly for vessels using flags of convenience. Spoofing refers to the intentional broadcasting of false AIS signals to conceal a vessel's true location, identity or journey. Therefore, port authorities should strengthen monitoring and impose penalties on non-compliant ships, including detention or cargo restrictions.

In addition, it is recommended that maritime stakeholders engage with flag states, port authorities, and financial institutions to disrupt shadow fleet operations. It is advised to establish transparent reporting mechanisms and improve international information-sharing to assist with collective enforcement efforts.

OFAC sanctions guidance for the maritime shipping industry    

In addition to the new EU measures on sanctions and shadow fleets, the Office of Foreign Assets Control (OFAC) has also released updated guidelines for maritime stakeholders regarding sanctions and shadow fleets. The stakeholders identified by OFAC include commodity brokers, insurers, ship management service providers, shipbroking companies, and port authorities, all of whom face a higher risk of being involved in deceptive sanction evasion practices.

OFAC recommends that maritime operators perform due diligence on vessel ownership, voyage routes, and trade documents. Fraudulent practices such as “spoofing” a vessel’s location via AIS manipulation to show a vessel’s location are used to conceal the true origin of oil cargoes. In addition, to due diligence prior to entering a commercial agreement, it is advised for maritime stakeholders to adopt contractual clauses that require counterparty compliance with U.S. sanctions regulations and enable actors to exit such arrangements as necessary.  

Within the guidelines OFAC further emphasize on potential red flags such as: modifications to original documents or letters of engagement intended to hide links to sanctioned activities, sudden changes to shipping instructions that deviate from established business practices, and refusals to provide additional information when such details are standard in the industry.  

U.S. persons and entities must be aware of restrictions on transactions involving blocked property and notes that non-U.S. entities could also be subject to OFAC enforcement or secondary sanctions if they cause U.S. persons to violate these regulations. To address these risks, OFAC recommends that maritime stakeholders implement sanctions internal compliance controls.

Latest updates on Iran and Syria sanctions  

Ease on Syrian Sanction from both EU and US perspective    

The Council has decided to suspend sectoral sanctions on Syria’s energy (oil, gas, and electricity) and transport sectors due to the current situation. The humanitarian exemption will be extended indefinitely. Additionally, exemptions will be introduced to the ban on banking relations between Syrian and member-state financial institutions, permitting transactions related to energy, transport, humanitarian aid, and reconstruction. Five entities: Industrial Bank, Popular Credit Bank, Saving Bank, Agricultural Cooperative Bank, and Syrian Arab Airlines, will be removed from the asset freeze list, and funds may be made available to the Syrian Central Bank. However, the Council will maintain sanctions targeting the Al-Assad regime, the chemical weapons sector, and illicit drug trade. Certain sectoral measures will also remain, including restrictions on arms trade, dual-use goods, equipment for internal repression, surveillance software, and the import/export of Syrian cultural heritage goods.

From the US side, on January 6, 2025, OFAC issued Syria General License (GL) 24, authorizing expanded transactions in Syria for six months to support essential services and humanitarian efforts. This follows the end of Assad’s rule and aims to aid Syria’s rebuilding. While sanctions remain on Assad, his associates, and terrorist groups, GL 24 allows transactions for governance continuity, utilities, and humanitarian aid. Existing humanitarian authorizations remain, and further guidance is available for compliance and specific licensing requests.

Tightening on Iran Sanctions    

Lastly, OFAC sanctioned over 30 individuals and vessels for brokering the sale and transportation of Iranian petroleum. Targets include oil brokers in the UAE and Hong Kong, tanker operators in India and China, and Iran’s National Iranian Oil Company (NIOC). The sanctioned vessels have transported millions of barrels of crude oil, funding Iran’s destabilizing activities. The U.S. has imposed sanctions on Iranian tankers using ship-to-ship transfers outside jurisdictional limits to conceal the origin of Iranian oil and evade restrictions, targeting companies and vessels involved in these shadow fleet operations. Eight entities from Iran, India, Malaysia, Seychelles, and the UAE, are designated and eight vessels  are being identified as blocked property in which these entities have an interest.  

Sanctions Compliance in practice: CJEU decisions shaping compliance standards

Country of Origin    

The Court of Justice of the European Union (CJEU) ruled in Case C-67/23 that the importation of teak logs processed in Taiwan does not violate Article 2(2)(a) of Regulation 194/2008, provided the processing changes the goods' origin. The case arose from criminal proceedings against the managing director of W. GmbH, a German company, for allegedly breaching EU sanctions prohibiting the import of goods originating in or exported from Burma/Myanmar. The director argued that the teak logs, having been processed in Taiwan, no longer fell under this restriction. The CJEU clarified that processing teak logs into sawn wood constitutes a transformation that determines a new origin, meaning the goods would be considered as originating in Taiwan rather than Burma/Myanmar. Additionally, the Court held that the prohibition on exports from Burma/Myanmar applies only to goods imported directly from that country, ensuring that third countries not targeted by the sanctions are not affected.

Sources for screening     

The Court of Justice of the European Union (CJEU) issued a significant ruling in Case T-748/22 on January 25, 2025, clarifying the criteria for identifying “associated persons” in the context of EU sanctions and the evidentiary standards for maintaining individuals on sanctions lists. The Court upheld the use of publicly available information as corroborative sources when official records are unavailable, including press reports and even Wikipedia entries, stating: "Although they are extracts from the 'Wikipedia' website, which is a collective online encyclopedia, the information contained in those extracts may nevertheless corroborate information from other sources." Additionally, the ruling validated reliance on sanctions imposed by non-EU jurisdictions, such as the United Kingdom, reinforcing their probative value in EU assessments. This decision has broad implications for sanctions enforcement, as it affirms the EU’s flexible approach to evidence in designating individuals.    

Forward Thinking  

As the EU and U.S. continue to refine and expand sanctions enforcement, organizations must prepare for an increasingly complex regulatory landscape. The EU’s tightening restrictions on Russia, including potential bans on LNG imports and increased scrutiny of third-country intermediaries, signal a need for enhanced supply chain transparency and contractual safeguards against indirect exposure. Simultaneously, stricter maritime compliance measures targeting Russia’s "shadow fleet" and OFAC’s emphasis on vessel tracking and due diligence indicate that businesses involved in shipping, insurance, and commodities trading will need to adopt AI-driven monitoring systems and strengthen compliance protocols to mitigate enforcement risks.  

Meanwhile, diverging trends in Iran and Syria sanctions—where Iran faces heightened enforcement while Syria sees selective relief—highlight the necessity for real-time geopolitical risk assessments and adaptable compliance frameworks. Recent CJEU rulings further suggest a shift toward broader evidentiary standards, requiring companies to integrate diverse intelligence sources, including publicly available data and third-country sanctions lists, into their due diligence processes. Looking ahead, organizations must prioritize proactive compliance by implementing risk assessments and transparent supply chain tracking.

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