Sanctions 2026

USA – WASHINGTON, DC Trends and Developments Contributed by: Stephanie L. Connor, Andrew K. McAllister, Matt Rosenbaum and Manny Levitt, Holland & Knight LLP

Union Cuba-Petroleo (“CUPET”), Cuba’s state-owned oil company. Counterterrorism Pressure on Cartels The Trump Administration’s use of counterterrorism and counternarcotics sanctions authorities to target cartels in the Western Hemisphere has expanded dra - matically, and 2026 has seen this strategy extend to new geographies and organisations. This trend began in 2025 when President Trump signed an EO direct - ing the designation of cartels and transnational crimi - nal organisations as FTOs and Specially Designated Global Terrorists (SDGTs). In 2026, this trajectory has continued. On 28 May 2026, Secretary of State Marco Rubio designated Brazil-based Primeiro Comando da Capital (PCC) and Comando Vermelho (CV) as both SDGTs and FTOs, effective from 5 June 2026, expanding the counter - terrorism sanctions framework into South America’s largest economy. PCC and CV command thousands of members, operate throughout Brazil, and maintain networks extending across the Western Hemisphere, Africa and Europe. The designations carry immediate implications for any company with a US nexus, includ - ing financial institutions, fintech companies, and busi - nesses in the tourism, consumer goods and extrac - tives sectors, who may have counterparties, supply chains, or investment relationships touching Brazilian commerce in regions where PCC or CV operate. In March 2026, US and Ecuadorian forces conducted joint military operations targeting “designated terrorist organisations”, illustrating that the counterterrorism framework is now operational through co-ordinated military action in the hemisphere. OFAC has continued to designate individuals and entities associated with cartels’ alternative revenue streams in 2026, including a timeshare fraud network led by a Mexican cartel. As noted above, the FTO designations carry crimi - nal liability for parties providing “material support” extending well beyond the civil penalties that normal - ly apply to SDN dealings and create risks of private litigation under the ATA. As a result, companies with operations in jurisdictions where FTOs are reportedly active (eg, Mexico, Colombia, Venezuela and Brazil) face heightened risk and should assess their exposure

to designated entities that may be embedded in local economies. Russia: Enforcement Coupled with Relief Russia has featured prominently in OFAC’s enforce - ment actions in recent years, with over half of OFAC’s enforcement actions in 2025 relating to violations of US sanctions targeting Russia, including a landmark USD216 million penalty against a fund linked to a Russian oligarch. These actions, combined with the designations of Lukoil and Rosneft in October 2025, signalled a continued commitment to Russia sanc - tions even as the administration pursued diplomatic negotiations to resolve the war in Ukraine. While active enforcement of sanctions in Russia has continued, the policy approach to Russia has includ - ed selective relief and a marked slow-down in the expansion of sanctions designation. In March 2026, the Trump Administration offered significant sanc - tions relief to the Russian oil and gas sector through a GL temporarily authorising the delivery and sale of Russian-origin crude oil and petroleum products that were already on the water, aimed at addressing rising oil prices following US and Israeli military operations in Iran. OFAC’s Crackdown on “Gatekeepers” OFAC has intensified its focus on professional service providers, including investment advisers, private equi - ty firms, attorneys, accountants, and trust/corporate service providers, who fail to properly account for and mitigate sanctions risks. Recent enforcement actions have targeted players in private equity, venture capital, real estate, and legal markets, with OFAC emphasis - ing that companies must “look beyond legal formali - ties to underlying practical and economic realities” (a theme addressed in further detail below). OFAC has signalled that professional intermediaries are often the critical choke-points through which sanctioned persons access the global financial system, and that these firms must undertake robust diligence that looks beyond mere corporate formalities. In several cases involving US-based private equity firms that invested funds on behalf of sanctioned persons, as well as actions against venture capital and real estate trans - action participants, OFAC has warned that sophisti - cated financial actors cannot plead ignorance when a

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