Episode 167

30th June – 3rd July 2025

Sanctions

OFAC Authorises Civil Nuclear Transactions with Russia and Seeks Public Feedback

On 27th June 2025, the US Treasury’s Office of Foreign Assets Control (‘OFAC’) issued General Licence 115B, permitting certain transactions related to civil nuclear energy involving Russia. This update provides specific allowances within existing sanctions, reflecting a nuanced approach to energy cooperation amid broader restrictions.

Alongside the licence, OFAC updated several Russia-related FAQs to clarify its policy stance and compliance expectations. These include FAQs 966, 967, 978, 999, 1010, 1011, 1117, 1182, 1203, and 1216.

Additionally, OFAC announced a proposal to introduce a new electronic Sanctions Reconsideration Portal, inviting public comments as part of the Paperwork Reduction Act process. Feedback is due by 25th August 2025. This initiative aims to enhance transparency and streamline administrative processes for sanctions-related appeals.

US Treasury Issues Sanctions Regulations Targeting the International Criminal Court

The US Treasury’s Office of Foreign Assets Control (‘OFAC’) has published new regulations to enforce Executive Order 14203, signed on 26th February 2025. This order imposes sanctions on the International Criminal Court (‘ICC’), and the accompanying regulations are set to take effect on 1st July 2025, following their appearance in the Federal Register.

The move formalises the US government’s legal framework for restricting financial transactions and other dealings with individuals or entities associated with the ICC, in line with the executive directive. The published regulations provide further implementation guidance and are now available for public inspection.

US Lifts Syria Sanctions in Shift Toward Engagement, While Maintaining Pressure on Assad

On 30th June 2025, the US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) began implementing a presidential executive order revoking the long-standing Syria sanctions program. The move—aimed at supporting the country’s reconstruction under its new government led by President Ahmed al-Sharaa—removes hundreds of individuals and entities from the Specially Designated Nationals and Blocked Persons list and will see the Syria Sanctions Regulations eliminated from the Code of Federal Regulations.

While US officials framed the decision as a fresh opportunity for Syria to reintegrate into the global economy and rebuild after years of conflict, the action does not mark an end to all sanctions. OFAC simultaneously expanded existing sanctions under Executive Order 13894 to ensure continued accountability for Bashar al-Assad, his former associates, and regional destabilisers. New designations target captagon traffickers, former regime officials, and individuals affiliated with Iranian and terrorist networks.

Treasury Secretary Scott Bessent emphasised that the administration remains committed to preventing the resurgence of Assad-era abuses and threats to regional stability. The action follows a series of positive developments attributed to the new Syrian leadership over the past six months and is framed as part of a broader shift in US engagement in the Middle East. The White House press release is here.

FCDO Issues Sanctions Guidance for Non-UK Businesses Operating Abroad

The UK Foreign, Commonwealth and Development Office (‘FCDO’) has published tailored sanctions guidance to assist non-UK businesses engaging in international trade. The document outlines how UK sanctions may apply to entities operating outside the UK, particularly if they have dealings linked to the UK. It highlights compliance obligations, potential legal and reputational risks of non-compliance, and offers practical steps to strengthen due diligence and avoid circumvention. Country-specific insights are also provided for Armenia, Georgia, Kazakhstan, Kyrgyzstan, and Uzbekistan, including reference to relevant local laws and regulations. The webpage is here.

UK Updates Russian Oil General Licences Under Oil Price Cap Regime

On 27th June 2025, the UK Office of Financial Sanctions Implementation (‘OFSI’) amended two General Licences related to the oil price cap regime: INT/2022/2470156 (covering Exempt Projects and Countries) and INT/2025/5635700 (addressing Russian Oil Exempt Projects). These updates refine the scope of permitted activities under the sanctions framework targeting Russian oil.

OFSI advises all individuals and entities relying on these licences to review the amended documents in full to understand revised permissions, compliance obligations, and usage conditions.

UK Updates Russia Sanctions List—Three Entries Amended, Asset Freezes and Trust Service Bans Maintained

On 1st July 2025, the Office of Financial Sanctions Implementation (‘OFSI’) updated its Russia sanctions list under the Russia (Sanctions) (EU Exit) Regulations 2019. The changes affect three entries—Yegor Yurievich Karasev, Anatoliy Moiseevich Cherner, and the Main Directorate of Deep-Sea Research of the Russian Ministry of Defence. While the entries have been amended, all three remain subject to asset freezes and trust services prohibitions due to their links to the Russian government and sectors deemed strategically significant. The notice reminds UK entities of their legal obligations to freeze relevant assets, cease trust services, and report findings to OFSI.

China Sanctions Former Philippine Senator Tolentino Over Anti-China Rhetoric

China’s Ministry of Foreign Affairs has announced sanctions against former Philippine Senator Francis Tolentino, citing his “egregious conduct” and statements that Beijing claims undermine China’s sovereignty and bilateral relations. The move includes a travel ban, barring Tolentino from entering mainland China, Hong Kong, and Macao.

Labelling Tolentino part of a group of “anti-China politicians” in the Philippines, the Chinese government framed the sanctions as a firm defence of its national sovereignty, security, and development interests. While Beijing did not elaborate on specific incidents, the decision aligns with a pattern of diplomatic retaliation against foreign political figures critical of its policies in the South China Sea and broader regional disputes.

UK Sanctions Strategy Quietly Charts a Smarter, More Unified Future

The UK government’s latest sanctions review—launched quietly in Parliament and overlooked in public discourse—signals a significant policy shift: away from fragmented enforcement toward a more integrated, data-driven strategy. Framed as a cross-government review of “implementation and enforcement,” the document in fact covers a much broader remit, including resourcing, intelligence-sharing, and policy architecture.

Key developments include a two-track approach that both raises the cost of non-compliance and supports businesses in complying, reflecting a balance of deterrence and clarity. The strategy lays out 10 recommendations—three of which have already been actioned, such as the publication of sector-specific guidance, a simplified sanctions homepage, and new legal protections for whistle-blowers.

Notably, the review calls for ditching “magical thinking” in sanctions design, advocating instead for a theory-of-change framework and clear delisting criteria. It also acknowledges the messiness of enforcement bodies and proposes a joint enforcement strategy, single reporting channel, and possibly a future intelligence hub—though it stops short of endorsing a standalone sanctions agency.

Rather than replicate allies’ every move, the UK now embraces flexible coordination with partners, backed by rigorous metrics and ongoing funding under the Economic Deterrence Initiative. While the document avoids labelling itself a “strategy,” its clarity, timelines, and focus on outcomes mark it as a strategic shift, nonetheless.

Fraud

Spain Dismantles €460M Global Crypto Fraud Network in Major International Crackdown

On 25th June 2025, Spanish authorities arrested five individuals—three in the Canary Islands and two in Madrid—linked to a major global cryptocurrency investment fraud operation. The network is believed to have defrauded over 5,000 victims worldwide, laundering an estimated €460 million in illicit proceeds. The fraud was orchestrated through a vast web of international sales representatives and supported by a corporate and banking infrastructure allegedly based in Hong Kong. Investigators suspect the criminals used a variety of payment gateways and crypto wallets registered under different names to obscure fund transfers.

Europol, which has supported the investigation since 2023, coordinated efforts across several countries, including Estonia, France (specifically New Caledonia), and the United States. A Europol cryptocurrency specialist was deployed to Spain during the arrests to provide operational support to local authorities. The investigation remains ongoing.

Europol warns that online fraud is rapidly evolving into one of the most significant threats to the EU’s internal security. With technological advances such as AI accelerating tactics like social engineering and data exploitation, the agency anticipates that this form of crime may soon surpass traditional organised criminal enterprises in scale and impact.

Market Abuse

UK Tribunal Upholds FCA Bans in Bond Spoofing Scandal

The Upper Tribunal has confirmed the Financial Conduct Authority’s (FCA) decision to prohibit three former Mizuho International bond traders—Diego Urra, Jorge Lopez Gonzalez, and Poojan Sheth—from participating in the UK financial services industry. The trio were also fined a total of nearly £381,000 for engaging in market manipulation between June and July 2016.

Their misconduct involved “spoofing” in Italian Government Bond futures—placing large orders with no intention of executing them to mislead the market and profit from genuine trades. The Tribunal agreed with the FCA that the behaviour was dishonest and demonstrated a lack of integrity.

This is the third such Tribunal endorsement of the FCA’s enforcement in recent weeks, reinforcing a clear signal: dishonest trading tactics will not go unchecked. The individuals have 14 days to appeal the ruling.

UK Market Cleanliness Metric Rises—but Questions Remain on Insider Activity Signals

The FCA’s latest market cleanliness statistics for 2024 show a marked increase in pre-announcement share price movement before UK takeovers, with 37.8% of events showing abnormal activity—up from a five-year moving average of 32%. However, the metric has been recalibrated since 2024, making year-on-year comparisons difficult.

Other indicators paint a nuanced picture:

• Abnormal Trading Volume (‘ATV’) held steady at 5.6%, reflecting persistent volatility across global markets.

• Potentially Anomalous Trading Ratio (‘PATR’) ticked up to 4.1% from 3.3%, though this still represents only a fraction of total trading volume (0.6% of activity warranted deeper review).

While these metrics aim to spotlight possible insider dealing, the FCA cautions against over-interpreting them: not all insider trading causes price shifts, and legitimate analysis can sometimes mimic suspicious patterns. The regulator is now working to broaden its indicator set to better reflect market integrity.

Cyber Crime

US and UK Target Russian Hosting Provider Aeza for Enabling Global Cybercrime and Technology Theft

The United States Department of the Treasury, in coordination with the United Kingdom’s National Crime Agency, has sanctioned the Russia-based Aeza Group for operating a “bulletproof hosting” (‘BPH’) service that supports a wide array of cybercriminal activities. These BPH services provide secure infrastructure for ransomware operators, infostealer malware, darknet drug vendors, and other illicit actors by helping them evade law enforcement detection and takedown efforts. OFAC’s designations, issued under Executive Orders 13694, 14144, and 14306, freeze all US-based assets of Aeza and prohibit transactions with US persons.

Aeza Group, headquartered in St. Petersburg, has reportedly hosted infrastructure for notorious malware groups such as Meduza and Lumma, both of which have targeted entities in the US defence sector and global technology industries. The company also provided services for the BianLian ransomware gang and supported the Russian darknet drug market, Blacksprut. OFAC’s statement highlights Aeza’s pivotal role in facilitating cyber-enabled crimes that pose threats to US national security and the global financial system.

The sanctions extend to Aeza’s UK front company, Aeza International Ltd., and its Russian subsidiaries, Cloud Solutions LLC and Aeza Logistic LLC. All three were designated for acting on behalf of Aeza Group. Four of the firm’s senior figures—Arsenii Penzev, Yurii Bozoyan, Vladimir Gast, and Igor Knyazev—were also sanctioned. Penzev and Bozoyan were reportedly arrested in Russia for facilitating the placement of illicit drug markets on Aeza's infrastructure. Gast, the firm’s technical lead, managed the hosting of illicit sites, while Knyazev is currently running Aeza in the absence of the other executives.

This move follows a pattern of increasing enforcement actions by the US against cybercriminal infrastructure and echoes a broader effort to dismantle the networks that enable ransomware, identity theft, and the trafficking of synthetic opioids. The Treasury stressed that the ultimate goal of sanctions is behavioural change, not punishment, and signalled openness to removing sanctioned entities that disengage from illicit activities.