USA Trends and Developments Contributed by: Bruce G. Paulsen, Brian Maloney and Hannah Thibideau, Seward & Kissel LLP
ered foreign persons to capture entities “subject to the direction or control of” a country of concern. It also expands the covered technologies to include high-performance/supercomputing and hypersonic systems, and provides the Treasury Department with the ability to add more categories in future. Addition - ally, the COINS Act widens the geographic scope of the Outbound Program to include Cuba, Iran, North Korea, Russia and Venezuela. US persons will also be prohibited from “knowingly directing” notifiable trans - actions by non-US persons, in addition to the existing prohibition on “knowingly directing” prohibited trans - actions by non-US persons. At the same time, the COINS Act creates several new exceptions and procedural features that do not exist in the Outbound Program. It adds broad excepted trans - action categories, including transactions secondary to covered transactions, ancillary transactions by finan - cial services institutions, de minimis transactions, and ordinary business transactions. The law also requires the Treasury Department to set up a process for per - sons to request confidential, non-binding feedback on borderline transactions, authorises a publicly accessible database of covered foreign persons with a petition removal process, and mandates increased bilateral and multilateral engagement. The codification of the US’s outbound foreign invest - ment regulations solidifies the US government’s will - ingness to curb investments as an additional mecha - nism for enforcing sanctions objectives. The COINS Act’s expansion beyond China to additional countries that are often the target of US sanctions also brings these investment restrictions in line with the broader geographical prohibitions in the economic sanctions space. US investors should continue to carefully assess outbound investment compliance require - ments when investing outside the United States. Russia Sanctions: Ongoing Enforcement The United States continues to maintain its sanctions programmes against Russia as the latter’s war with Ukraine continues. In October 2025, OFAC issued new sanctions aimed at Russia’s energy sector, des - ignating Russia’s two largest oil companies, Lukoil OAO (“Lukoil”) and Open Joint Stock Company Ros - neft Oil Company (“Rosneft”), as well as their sub -
sidiaries, as Specially Designated Nationals (SDNs). OFAC designated both companies for operating or having operated in the energy sector of the Russian Federation economy. Additionally, all entities that are 50% or more directly or indirectly owned by Rosneft and Lukoil are blocked, pursuant to Executive Order 14024. These designations increase pressure on Rus - sia’s energy sector and seek to stymie the Kremlin’s ability to raise funds for the war on Ukraine. In April 2026, OFAC issued general licences extending prior authorisations issued in October 2025 regard - ing Lukoil, extending the time period for transactions involving the maintenance, operation or wind-down of Lukoil. The licences continue to allow limited, time- bound transactions to proceed despite the designa - tion of Lukoil and some of its affiliates as SDNs. The updated licence allows such transactions to continue until 29 October 2026. While OFAC has generally maintained its sanctions on Russia, in the wake of Iran’s closure of the Strait of Hormuz and resulting global oil shortages, OFAC issued General License 134B, authorising certain transactions involving crude oil and petroleum pro - ductions of Russian origin. General License 134B extended the authorisation provided under previ - ous licences, allowing products loaded onto vessels before 17 April 2026, until 16 May 2026. The authori - sation only applied to crude oil or petroleum products. OFAC Modernisation Efforts Earlier this year, the Treasury Department indicat - ed that modernising OFAC was one of the Depart - ment’s priorities in order to streamline compliance. According to Treasury Assistant Secretary for Terrorist Financing Jonathan Burke, the Treasury Department aims to increase the effectiveness of US sanctions by revisiting and removing certain sanctions compli - ance requirements that are inefficient or not in line with major national security risks. The Department is undertaking a review of sanctions programmes to sharpen the focus of active sanctions, including by identifying OFAC designations that are outdated or no longer necessary, and developing additional guidance to help focus compliance resources where they are most needed. As part of this effort, the Department claimed it is reviewing sanctions programmes that
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