USA TRENDS AND DEVELOPMENTS Contributed by: Seward & Kissel LLP
Introduction The first half of 2025 has witnessed rapid and dynamic geopolitical developments, including notable shifts in emphasis regarding US foreign policy and national security priorities. While other tools of economic statecraft, including tariffs and export controls, have received considerable public attention, new develop- ments in several US sanctions programs have also emerged, necessitating close monitoring of the latest updates. The ongoing conflicts in the Middle East have punc - tuated the US policy of “maximum pressure” against Iran. At the same time, the United States issued a sweeping general license to provide broad sanctions relief to Syria, as its new government seeks to rebuild the Syrian economy following the fall of the Assad regime. Sanctions against Russia seem firmly entrenched as long as the war with Ukraine continues, but there are new questions of sanctions divergence with other jurisdictions (most notably the United Kingdom and the European Union). Parties with exposure to Russia must navigate an increasingly complex patchwork of sanctions actions, including the G7’s oil price cap and the threat of secondary sanctions that continue to be imposed against foreign financial institutions that do business with any designated party. In China, even as parties have worked to comply with newly implemented outbound investment rules, pending diplomatic efforts concerning trade and tariffs have made those rules subject to potential change. China presents other complexities as well, including the US’s list of Chinese Military Companies (CMC) and the Chinese government’s own sanctions programme. Amidst significant upheaval and uncertainty, the exist - ing sanctions programmes continue to play a key role in the economic and diplomatic landscape. The US has indicated that it will continue to use sanctions as a key policy tool in the coming years, making ongo - ing sanctions monitoring and compliance a mission- critical business function.
Robust Enforcement Expected in 2025 The United States has long employed sanctions pro- grammes as a means of achieving national security and foreign policy objectives around the world. In recent months, it has demonstrated a willingness to use sanctions policy as both a carrot (in the case of Syria) and a stick (in the cases of Iran and Russia), and the authors expect sanctions policy to play a role in upcoming developments in the Middle East, relations with China, and the Russia-Ukraine War. Although the resolution of these and other world affairs remains unpredictable, the US will likely maintain a focus on enforcing existing sanctions programmes and, in some cases, may look to enhance and expand exist - ing programmes. At present, OFAC continues to focus its efforts on organisations subject to US jurisdiction, as well as foreign entities that conduct business in or with the United States or with US persons, or that use goods or services exported from the United States, and to look to its May 2019 Framework for Compliance Com - mitments as an effort to clarify OFAC’s compliance expectations and best practices for industry actors. OFAC’s recent enforcement releases demonstrate a continued commitment to impose extraterritorial or secondary sanctions against non-US persons where transactions are made in US dollars or transit the US financial system, causing US financial institutions to breach applicable US sanctions programmes. Most recently, in June 2025, OFAC issued its first two enforcement releases since the new administration took office, offering a preview of its potential enforce - ment priorities. In the first instance, OFAC imposed the maximum civil penalty permitted under the statute, $215,988,868, on GVA Capital Ltd., a venture capital firm based in California. GVA knowingly managed an investment for sanctioned Russian oligarch Suleiman Kerimov while aware of his blocked status, in viola - tion of Ukraine-Russia sanctions, and failed to fully and timely respond to an OFAC subpoena. This action highlights that gatekeepers, such as “investment pro - fessionals, accountants, attorneys, and providers of trust and corporate formation services, among oth- ers,” are responsible for monitoring sanctions risks posed by sanctioned persons or their proxies who may seek to use their services. OFAC emphasised
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