Sanctions 2025

USA – WASHINGTON, DC Trends and Developments Contributed by: Jonathan M. Epstein, Daniel E. Goren, Tahlia Townsend and Manny Levitt, Holland & Knight LLP

sia, and Iran. This trend intensified significantly during the Biden Administration, following the G7’s imposi - tion of a “price cap” on Russian-origin oil in 2022, with the United States and the United Kingdom announc - ing continuous rounds of sanctions designations in response to efforts by vessels and related entities (referred to as the “Shadow Fleet” or “Dark Fleet”) to evade US sanctions and avoid compliance with the price cap. In 2025, this trend has continued and intensified, but the focus has moved away from Russia to Iran, in line with President Trump’s National Security Presi - dential Memorandum 2 (NSPM-2), which announced a “max pressure” campaign on Iran and called for, among other things, a “robust and continual” cam - paign led by State in coordination with Treasury to “drive Iran’s export of oil to zero, including exports of Iranian crude to the People’s Republic of China.” NSPM-2 also called on the DOJ to “pursue all avail - able legal steps to impound illicit Iranian oil cargoes” and disrupt efforts by the Iranian government to evade US sanctions and export controls. On 10 January 2025, 183 vessels allegedly involved in Russia-related trades were sanctioned, along with several vessel insurers, management and holding companies, and Russian oil traders. Since President Trump took office on 20 January 2025, each round of “Shadow Fleet”-related designations has been made under sanctions programs targeting Iran and terrorist organisations supported by the Iranian government, including Hezbollah, the Houthis, and the Iranian Rev - olutionary Guard Corps. The aggregate result is that, since 2024, the number of vessels registered with the International Maritime Organization and subject to OFAC sanctions increased by over 46% to 1,841 (including individually desig - nated vessels and vessels subject to sanctions due to sanctioned owners/operators). Sanctions authori - ties in other jurisdictions have also increased des - ignations; according to industry reports, over 1,300 vessels are now directly identified on sanctions lists maintained by the UN Security Council, OFAC, the European Commission, United Kingdom’s HM Treas - ury, and Switzerland’s State Secretariat for Economic Affairs, representing (as of May 2025) a 30% increase

from 2024 and a nearly 130% increase from February 2022 according to S&P Global. More recently, desig - nations have targeted not only oil and gas tankers but also container cargo vessels allegedly connected to sanctions evasion networks. In addition to vessels, OFAC has issued a steady stream of designations targeting parties within the oil and gas and maritime shipping sectors allegedly involved in “sanctions evasion networks”, including: • shipping companies; • vessel chartering companies; • technical and commercial managers for vessels and related service providers; • oil and gas brokers and traders; • financial institutions; • insurers; • port operators and port service providers; and • so-called “teapot” refineries (primarily in China). Many of the designations have thus far targeted par - ties located in the UAE, Hong Kong, Oman, Singapore, Malaysia, China, and the Marshall Islands, further increasing the sanctions risks associated with those jurisdictions. However, parties located in the EU and UK, jurisdictions not historically targeted by US sanc - tions authorities, have also been designated. Notably, while China has historically not been a major target of US blocking sanctions despite periods of rising geo - political tensions with the United States, a growing number of Chinese entities have been sanctioned for their role in purchasing and transporting Iranian oil. Beyond the rising tide of sanctioned vessels and asso - ciated parties, updated guidance issued by OFAC and FinCEN on “red flags” for Iran-related maritime sanc - tions evasion and due diligence expectations under - score the regulatory scrutiny the maritime industry is receiving. The updated guidance includes the follow - ing recommendations: Red Flags: • use of vessels that are uninsured or use sanc - tioned, new, or untested insurance providers for no apparent business reason;

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