Sanctions 2025

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

DOJ: Prioritising Sanctions Violations for Criminal Enforcement Recent criminal prosecutions and policy changes announced by the DOJ following President Trump’s inauguration in 2025 indicate that streamlining and pursuing criminal enforcement of US sanctions laws will be a key priority of the Trump Administration. For example, a memorandum issued by Attorney Gen - eral Pam Bondi on 5 February, 2025, announced the removal of a longstanding requirement that local US Attorney’s offices obtain approval from DOJ’s National Security Division in Washington before filing charges or seeking search warrants in connection with terror - ism and sanctions-related investigations that “target members or associates of any cartel or [Transnation - al Criminal Organization] designated as an [FTO] or SDGT.” Separately, on 12 May 2025, the head of the DOJ’s Criminal Division published a memorandum titled “Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime” (12 May Memo), which listed, among others, the following “high-impact areas” for the Criminal Division to prioritise investigations and prosecutions: • violations by corporations involving material sup - port of terrorism; • “conduct that threatens the country’s national security, including sanctions violations or [enabling] transactions by cartels, TCOs, hostile nation- states, and/or foreign terrorist organisations”; • material support by corporations to FTOs, includ - ing cartels and TCOs; and • digital assets cases involving cartels, TCOs, or terrorist groups, or facilitating money laundering or sanctions evasion. Perhaps most significantly for the average compa - ny, the 12 May Memo added “corporate sanctions offenses” (among other things) to the list of corpo - rate offenses for which whistleblowers who provide original and truthful information can recover rewards under the DOJ’s Corporate Whistleblower Awards Pilot Program, increasing the incentive for employ - ees to report on corporate failures to comply with US sanctions regulations.

• use of vessels that have undergone frequent name changes or reflagging in different third-country jurisdictions or by registries not authorised to pro - vide flagging services for a particular jurisdiction; • opaque ownership structures that involve layers of shell companies or special purpose vehicles (“SPVs”); • involvement of “exchange houses” registered in Hong Kong or the UAE, or “trading companies” located in close proximity to Iran; • falsified cargo, vessel, or transaction documents; • automatic identification systems (AIS) on vessels that have been disabled or manipulated; • ship-to-ship (“STS”) transfers or irregular voyages; • blending oil from third countries and/or relabe - ling the oil as originating in other jurisdictions (eg, “Malaysia Crude Oil Blend”); and • associations with or past use of “Shadow Fleet” vessels or entities affiliated with “Shadow Banking” networks. Compliance Recommendations: • verifying cargo origin, vessel flag registration, and insurance; • reviewing cargo and transaction documentation for signs of manipulation or other “red flags”; • monitoring vessel location and data manipulation; • implementing contractual controls; • undertaking thorough KYC on vessels, owners, and managers, including reviewing vessel IMO registra - tions and associated travel patterns, available STS history, ownership history, insurance, flag history, ties to evasive activities, actors, or regimes, and potential sanctions risks associated with the vessel or its owners, operators, or managers; and • Reporting suspicious transactions to the relevant authorities. In summary, the prevalence of sanctions evasion in the maritime shipping and oil and gas sectors, cou - pled with increased scrutiny from OFAC and other sanctions enforcement agencies, is creating a more challenging and demanding compliance landscape for maritime industry stakeholders.

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