Episode 173

Sanctions

EU Unveils 18th Sanctions Package Targeting Russia’s Energy, Banking, and Military Sectors

The European Union has launched its most robust sanctions package yet—labelled the 18th—against Russia in an ongoing effort to cut off revenue streams fuelling the war in Ukraine. With this package, the EU aims squarely at energy exports, shadow fleet operations, and the financial sector. Key highlights include lowering the crude oil price cap from $60 to $47.60 per barrel, imposing an import ban on refined petroleum products derived from Russian crude (excluding allied deliveries), and extending sanctions to 105 additional vessels, bringing Russia’s shadow fleet tally to 444. Asset freezes and travel bans now target associated entities and individuals, including ship captains and registry operators.

The banking sector faces a new transaction ban across 22 more Russian financial institutions, with heightened penalties for third-country entities assisting Russia’s SPFS messaging system. Further restrictions cover software exports related to financial operations and transactions with the Russian Direct Investment Fund (‘RDIF’) and its affiliates. Militarily, the sanctions now reach key suppliers of battlefield equipment, including Chinese firms and dual-use tech providers across several countries, with export controls expanded to €2.5 billion worth of goods. There are also new restrictions on advanced machinery, chemicals used in propellant production, and sanctions against Russian proxies, propaganda agents, and those involved in indoctrinating Ukrainian children. Additional measures against Belarus align its trade restrictions with those on Russia and enforce a complete arms import embargo.

Reaffirming its pledge, the EU stated that it remains fully committed to Ukraine’s sovereignty and will continue its unwavering support across political, economic, and military fronts. The bloc insists that Russia must not prevail and that any peace efforts must respect Ukraine’s terms.

UK and EU Slash Oil Price Cap to Undermine Russia’s War Financing

In a coordinated move to intensify economic pressure on Russia, the UK and the European Union have announced a reduction in the Crude Oil Price Cap from $60 to $47.60 per barrel. The measure, aimed at striking directly at President Putin’s primary revenue source, is expected to significantly depress the market value of Russian crude, which has already seen a 35% year-on-year decline as of May. Oil exports account for roughly 30% of Russia’s federal income, fuelling its military actions in Ukraine.

Chancellor Rachel Reeves, speaking from the G20 in South Africa, emphasised the strategic timing and impact of the action, noting that it targets Russia’s economic vulnerabilities while maintaining global energy stability. Foreign Secretary David Lammy reinforced that the UK would not relent in efforts to financially constrain the Kremlin, stating that delaying peace only intensifies the resolve to support Ukraine.

The reduced cap comes into effect on 2nd September 2025, with a 45-day wind-down period for contracts signed before this date and priced under the previous limit. While the crude cap is adjusted, price caps for refined products—$100 for high-value (diesel, petrol) and $45 for low-value (fuel oil)—remain unchanged.

This move complements the UK’s broader campaign against Russian influence, which includes sanctions on over 250 energy-related vessels and recent actions targeting intelligence operatives linked to Kremlin-sponsored disruption. The goal remains clear: economically squeeze Russia to force its return to the negotiation table and secure a lasting peace in Ukraine. The Licence is here, Oil Price Cap Guidance here, and updated FAQs here.

UK Cracks Down on Russia’s Oil Revenues with New Sanctions

The UK government has unveiled a fresh wave of 137 sanctions targeting Russia’s energy sector, specifically aimed at cutting off funds which support President Putin’s war efforts in Ukraine. These sanctions focus on Russia’s shadow fleet of oil tankers and key intermediaries involved in moving illicit oil shipments. Over 135 vessels are now blacklisted for transporting $24 billion worth of cargo since early 2024.

Among the entities sanctioned is Intershipping Services LLC, identified for registering shadow fleet vessels under Gabonese flags, enabling annual cargo transfers of up to $10 billion. Another notable target is LITASCO Middle East DMCC, a company tied to Russian oil giant Lukoil, which has facilitated substantial volumes of oil transport through covert means.

This latest action coincides with a joint UK-EU move to lower the Crude Oil Price Cap, tightening financial restrictions even further. Foreign Secretary David Lammy described the measures as essential steps toward dismantling Putin’s oil revenues and reinforcing the UK’s commitment to Ukraine. Since 2022, Western sanctions have steadily eroded Russia’s oil and gas earnings, contributing to economic instability, inflation, and increased military spending within the country.

OFSI Issues Twin Wind-Down Licences for Litasco Middle East DMCC and Intershipping Services LLC

On 21st July 2025, the UK’s Office of Financial Sanctions Implementation (‘OFSI’) issued two General Licences — INT/2025/6488808 and INT/2025/6397444 — allowing persons to wind down transactions involving designated entities Litasco Middle East DMCC and Intershipping Services LLC, respectively. Each licence provides limited permissions to disengage from dealings with these sanctioned parties, subject to specific definitions and usage requirements. Potential users are advised to consult the full licence texts for operational details and compliance obligations.

General Licence Issued for Intershipping Services LLC Operations

HM Treasury has issued a general licence (INT/2025/6403704) under the Russia (Sanctions) (EU Exit) Regulations 2019, permitting specific business operations for Intershipping Services LLC. This UAE-based company acts as the global representative for the Maritime Administration of the Gabonese Republic.

The licence authorises financial transactions involving “Relevant Ships”—vessels operated by or for the Gabonese government—including payments to or from Intershipping Services LLC and third parties under existing or new contracts. It also allows UK financial institutions to process these transactions, provided they meet regulatory criteria.

The licence explicitly exempts these actions from sanctions regulations but does not permit any activities which breach other parts of the Russia Regulations unless similarly licensed. The document took effect on 21st July 2025 and can be varied or revoked by HM Treasury at any time.

UK Launches World-First Sanctions Regime to Target Global People-Smuggling Networks

The UK government has unveiled a groundbreaking sanctions regime aimed at dismantling international people-smuggling operations which fuel irregular migration. This initiative marks the first time any country has introduced dedicated sanctions targeting individuals and entities involved in organised immigration crime. The regime empowers authorities to freeze assets, impose travel bans, and sever access to the UK financial system for those complicit in smuggling activities—regardless of their location.

The first wave of sanctions, announced on 23rd July 2025, targets 25 individuals and organisations across Asia, the Middle East, the Balkans, and North Africa. These include gang leaders, suppliers of small boats, hawala bankers facilitating illicit payments, and companies advertising smuggling equipment online. Notable figures such as Bledar Lala, who oversees smuggling operations from Belgium, and Mohammed Tetwani, the self-proclaimed “King of Horgos” in Serbia, are among those sanctioned.

The regime complements new enforcement powers under the Border Security, Asylum and Immigration Bill and forms part of the UK’s broader “disrupt, deter, return” strategy. It aims to undermine the financial and logistical infrastructure of smuggling networks while reinforcing international cooperation. Foreign Secretary David Lammy and Home Secretary Yvette Cooper emphasised that the measures send a clear message: the UK will pursue and penalise those who exploit vulnerable migrants for profit. The statutory guidance is here.

OFSI Updates General Licences to Include New Sanctions Regulations

On 23rd July 2025, the UK’s Office of Financial Sanctions Implementation (‘OFSI’) amended General Licence INT/2025/5632740—focused on interim support for designated persons—and INT/2022/1679676—enabling asset recovery by law enforcement and regulatory authorities—to incorporate the newly introduced Global Irregular Migration and Trafficking in Persons Sanctions Regulations 2025. These changes expand the scope of permitted activities under the licences.

Money Laundering

UK Treasury Sets Out Targeted Reforms to Money Laundering Regulations Following Broad Consultation

The UK government has published its official response to the 2024 consultation aimed at improving the Money Laundering Regulations (‘MLRs’). Drawing on over 200 submissions from regulators, law enforcement, industry groups, and civil society, HM Treasury plans to introduce targeted changes to close loopholes, clarify obligations, and enhance risk-based approaches. Rather than overhauling the framework, the reforms seek to refine the existing system and align customer due diligence more closely with actual risk levels.

Among the key themes addressed are reforms to registration requirements for the Trust Registration Service, clarifications on the regulatory scope of the MLRs, and better coordination across supervisory bodies. The government also plans to tackle residual challenges through updated guidance, developed jointly with industry supervisors, to ensure consistent compliance without imposing undue burdens on low-risk customers.

These developments align with commitments made under the broader Economic Crime Plan 2023–2026, reinforcing efforts to fight financial crime while fostering proportional and effective regulation.

Other Financial Crime News

SFO Freezes Over £11K in Crypto from Arena TV CEO in Landmark Move

The UK’s Serious Fraud Office (‘SFO’) has frozen cryptocurrency assets valued at £11,155, including Bitcoin and USDC, belonging to Richard Yeowart, CEO of collapsed broadcasting firm Arena TV. This marks the agency’s first use of new powers introduced last year specifically for freezing crypto assets.

The order was approved at Westminster Magistrates’ Court after SFO proceeds-of-crime specialists linked the assets to suspected criminal activity. The frozen funds will be held for up to nine months to allow any affected parties to come forward, while investigations continue.

Arena TV’s collapse has prompted a sweeping investigation including a raid, three arrests, and the search of three properties. SFO’s Director of Operations, Emma Luxton, emphasised their growing crypto capabilities as part of wider efforts to disrupt sophisticated attempts to conceal illicit wealth.

UK Sets Unified Economic Crime Priorities to Strengthen Public-Private Response

In a significant move to tackle financial crime, the National Crime Agency (‘NCA’) and the Financial Conduct Authority (‘FCA’) have published nine priorities aimed at combating the UK’s biggest economic crime threats. These priorities target key vulnerabilities including cash-based money laundering, the exploitation of money mules, and fraud linked to overseas jurisdictions. With over £100 billion estimated to be laundered through or within the UK annually, largely driven by drugs, trafficking, and fraud, the initiative marks a strategic escalation in aligning public and private efforts.

This release fulfils a commitment under the UK’s second Economic Crime Plan and reflects close coordination with stakeholders such as HM Treasury, the Home Office, UK Finance, and the wider financial sector. The aim is to enhance resource allocation among regulated firms without adding cost burden, allowing for smarter, more impactful interventions while retaining regulatory compliance.

The approach will enable firms to ‘dial-up’ their efforts in high-risk areas and ‘dial-down’ in less critical zones. Planned changes—such as raising reporting thresholds for Defence Against Money Laundering (‘DAML’) reports and refining money laundering regulations—are expected to unlock resources for enhanced crime-fighting capacity.

Rachael Herbert of the NCA’s National Economic Crime Centre emphasised the strength of public-private partnerships, while FCA’s Steve Smart highlighted the value of unified national priorities for industry clarity. UK Finance's Ben Donaldson described the strategy as potentially transformative, noting it empowers both sectors to synchronise efforts and achieve greater societal protection.