USA TRENDS AND DEVELOPMENTS Contributed by: Seward & Kissel LLP
that such monitoring by non-bank financial institu - tions, such as venture capital firms and investment advisers, includes developing and maintaining effec - tive risk-based sanctions compliance controls for their business. In the second enforcement announcement from June, the National Security Division (NSD) of the DOJ announced parallel resolutions coordinated with OFAC, and with the US Department of Commerce’s Bureau of Industry and Security Office of Export Enforcement of apparent violations of US sanctions and export control laws, with private equity firm White Deer Management LLC and its affiliates, after the firm discovered and voluntarily self-disclosed criminal vio- lations of US sanctions and export laws committed by a company it had acquired. Notably, DOJ and OFAC each reduced potential penalties in response to White Deer’s voluntary self-disclosure and cooperation in the investigation. The DOJ declined to prosecute under its new March 2024 NSD Enforcement Policy for Business Organizations, which applies to Volun - tary Self-Disclosures in Connection with Acquisitions. OFAC noted the extensive remedial measures taken by management after the discovery of the offending conduct, which resulted in a 50% reduction of OFAC’s base civil penalty amount. Sanctions Against Iran Intensify as Conflict Escalates In early 2025, the Trump Administration reinstated a policy of “maximum pressure” on Iran, which includes additional sanctions measures against Iran and enti - ties doing business with Iran. Even more recently, military developments in Iran have thrust Iran and the sanctions programme targeting it to the top of US poli- cymakers’ priority list. The Department of State has expanded the reach of the Iranian sanctions programme under existing sanc - tions authorities, including, for example, sanctioning the sale and transfer of certain minerals and entities involved with Iran’s military defence industry. Simi - larly, the US Office of Foreign Asset Control (OFAC) has issued several rounds of sanctions designations against Iranian economic activity in 2025, and the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has recently issued
an advisory guiding financial institutions concerning Iranian oil exports, “shadow banking,” and weapons procurement. Recently, the US has participated in military action in Iran that quickly triggered sanctions policy adjust - ments, including sanctions of specific entities involved with Iran’s military defence industry. The Iranian sanc - tions regime is expected to see significant develop - ments in the second half of 2025 as military operations in and around Iran and diplomatic negotiations with the US and other countries play out. Trade War Causes Uncertainty with China Relations with China in 2025 have been driven so far by the new presidential administration’s efforts to reshape US trade policy. The US has pursued aggres- sive measures to achieve its goals regarding US- China relations, particularly by instituting high tariffs. Observers have speculated that the developments affecting US trade policy in China may also impact sanctions policy. Meanwhile, in January 2025, the US implemented a final rule on the new US Outbound Investment Secu - rity Programme, which focuses on regulating out- bound US person investments in the semiconductor and microelectronics, quantum information technolo - gies, or artificial intelligence sectors in China (includ - ing Hong Kong and Macau). The current administra - tion issued guidance on 21 February 2025, indicating that it was reviewing the outbound investment rule to “examine whether it includes sufficient controls to address national security threats,” suggesting that the administration may act to modify or expand the rule to other sectors or other “countries of concern.” Parties dealing with Chinese companies should also be aware of developments concerning the Chinese Military Companies (CMC) list, a programme author - ised by Congress through the National Defense Authorization Act (NDAA), that has seen the number of listed companies grow in recent years. The pro- gramme requires the US Department of Defense to publish a list of CMCs that are controlled by Chinese military bodies or are “identified as a military-civil fusion contributor to the Chinese defense industrial base.” Listed companies may be barred from con-
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