Episode 227

23rd February – 26th February 2026

Sanctions

UK Unveils Largest Sanctions Package Against Russia Since Early 2022

The UK government has announced its most extensive sanctions package since the early months of Russia’s full‑scale invasion, targeting nearly 300 individuals, companies and vessels in an effort to further restrict Russian oil revenues and military supply chains. The measures include sanctions on PJSC Transneft, major shadow‑fleet oil traders, dozens of tankers, suppliers of weapons components, civil nuclear entities, LNG operators and nine Russian banks. Ministers said the action aims to degrade Russia’s ability to finance and sustain its war, noting that international sanctions have already significantly reduced Moscow’s revenues. The announcement coincided with the Foreign Secretary’s visit to Kyiv, where she confirmed more than £30 million in new UK support for Ukraine’s energy resilience and reconstruction efforts. The press release is here, and the Russia sanctions list is here.

UK Issues Two New OFSI General Licences and Amends Two Licences

The UK Office of Financial Sanctions Implementation (‘OFSI’) has issued two new General Licences and amended an existing one, enabling specific wind‑down activities following recent designations. General Licence INT/2026/8893924 permits the orderly winding down of insurance policies written by Maritime Mutual entities prior to their designation, while General Licence INT/2026/8889196 allows persons to wind down transactions involving PJSC Transneft. OFSI has also amended General Licence INT/2025/5635700 to extend its scope to entities owned or controlled by Transneft and to add the Druzhba Pipeline to its schedule. OFSI advises that anyone relying on these licences should consult the full terms to ensure compliance. Finally, General Licence INT/2024/4761108 has been amended, expanding key definitions, introducing a new permission allowing entities to use the retail banking services of designated financial institutions for personal‑use payments, and clarifying that such payments cannot relate to commercial activity. The update also raises the cumulative payment limit from £50,000 to £55,000, extends the licence’s validity to February 2028, and revises reporting requirements. OFSI advises users to consult the full licence text to ensure compliance.

UK Director Jailed for Illicit Export of Military‑Grade Rifle Sights to Hong Kong

A Wakefield company director has been sentenced to just over two years in prison after repeatedly attempting to export military‑grade night‑vision rifle sights to Hong Kong without a licence, according to HMRC. Steven Gates misdescribed the controlled ML1d‑classified equipment as “low‑value cameras” and was caught after Border Force intercepted multiple shipments in 2022 and 2023, with a later home search revealing evidence of ten additional unlicensed exports. The case highlights the UK’s tightened enforcement posture toward strategic goods, particularly under its partial arms embargo on China and Hong Kong, with HMRC noting a sharp rise in criminal investigations. Officials reiterated that deliberate evasion of export controls will be detected, while reminding businesses that voluntary disclosure routes remain available for compliance breaches.

OFSI Launches Webinar on Strengthened Civil Enforcement Framework

The UK Office of Financial Sanctions Implementation will host a webinar on 3rd March to outline key changes to its civil enforcement and monetary penalties framework, following the publication of its consultation response and updated guidance on 9th February 2026. The session will walk industry through enhancements designed to strengthen OFSI’s enforcement processes, clarify expectations, and support firms in implementing the revised approach. Participants can register in advance.

OFSI Blog Highlights Key Lessons from £160,000 Bank of Scotland Sanctions Penalty

A new blog post from the UK Office of Financial Sanctions Implementation (‘OFSI’) outlines the lessons arising from its £160,000 penalty against Bank of Scotland for breaching the Russia financial sanctions regime. The post explains how the breach stemmed from weaknesses in sanctions screening, specifically a failure to detect a spelling variation of a designated individual’s name, as well as gaps in escalation procedures and outdated training. OFSI emphasises that firms must ensure screening systems can handle name variants, that frontline staff have clear escalation routes, and that training reflects the fast‑evolving sanctions landscape. The blog also notes that the bank’s prompt voluntary disclosure contributed to a reduced penalty, highlighting OFSI’s message that early reporting can materially influence enforcement outcomes.

US Treasury sanctions exploit‑broker network

According to the US Treasury Department, officials have imposed sanctions on Russian national Sergey Zelenyuk, his company Matrix LLC (operating as Operation Zero), and several associated individuals and entities for allegedly acquiring and selling stolen US government cyber tools, as well as brokering software exploits which could be used for malicious cyber activity. The announcement states that the network purchased proprietary tools taken from a US company by a former employee, who has since pleaded guilty, and then sold them to unauthorised buyers, including in non‑NATO countries. The designations, made under Executive Order 13694 and in coordination with the State Department’s first actions under the Protecting American Intellectual Property Act, block the assets of the named parties and prohibit US persons from engaging in related transactions, with Treasury emphasising that the measures aim to protect national security and deter further misuse of sensitive cyber capabilities.

Report Finds Russian Fossil Fuel Revenues Fall Below Pre‑Invasion Levels in Fourth Year of War

A new analysis from the Centre for Research on Energy and Clean Air reports that Russia’s fossil fuel export revenues have fallen to 27% below pre‑invasion levels in the fourth year of its full‑scale war against Ukraine, despite export volumes remaining slightly above 2021 levels. The study attributes the revenue decline to coordinated EU, UK, US and allied sanctions, including measures targeting refined oil, major Russian producers and an expanding “shadow fleet” of tankers. While China, India and Türkiye continue to buy the majority of Russian crude, their imports also declined over the past year. The report notes that enforcement pressure has reduced the use of false‑flagged vessels but that Russia has increasingly shifted tankers to its own flag, and it calls for further action to close sanctions loopholes and restrict services which facilitate Russian oil transport.

Money Laundering

Washington Man Admits Laundering Nearly $100 Million Linked to Global Investment Fraud Scheme

A Newcastle, Washington resident has pleaded guilty to conspiring to launder nearly $100 million in proceeds from an international investment fraud scheme which used a network of shell companies, dozens of bank accounts, and multiple cryptocurrency exchanges to move victim funds offshore. According to the plea agreement, the defendant helped channel money from investors who believed they were funding oil‑and‑gas storage deals in Rotterdam and Houston, before rapidly transferring the funds through domestic and foreign accounts and into crypto wallets controlled by individuals in Russia and Nigeria. Investigators traced at least $24.7 million directly to victims, with authorities alleging the remaining deposits were also fraud proceeds. The defendant agreed to pay more than $24 million in restitution and forfeit cash, crypto assets, and a vehicle, with sentencing scheduled for May 2026.

AMLA Names Juan‑Manuel Vega Serrano as Vice‑Chair to Support EU Anti‑Money Laundering Oversight

The EU Anti‑Money Laundering Authority has appointed Juan‑Manuel Vega Serrano as its new Vice‑Chair, adding more than 30 years of AML/CFT experience to the organisation’s senior leadership. Vega Serrano, a long‑serving Spanish civil servant, previously led Spain’s AML/CFT supervisory authority and FIU, served as an AML/CFT regulator at the Spanish Treasury, and chaired the Financial Action Task Force. In his new role, he will support AMLA’s efforts to strengthen and harmonise the EU’s anti‑money‑laundering and counter‑terrorist‑financing framework as the authority continues to build its operational capacity.

Bribery and Corruption

WEF examines how the 2025 CPI is reshaping business strategy

An article on the World Economic Forum website reports that the 2025 Corruption Perceptions Index shows most countries are struggling to control public‑sector corruption, creating greater uncertainty and strategic challenges for businesses. The piece explains that weakened institutions, declining trust, and more discretionary use of power are reshaping operating environments, while even traditionally higher‑scoring democracies are experiencing downward trends. It outlines three major forces affecting companies, namely less predictable governance, rising civic pressure, and the shift from compliance‑focused approaches to integrity‑driven leadership, and argues that businesses which integrate integrity into strategy, risk assessment, and collective action efforts are better positioned to navigate volatility and support more stable markets.

Fraud

SFO Secures Prison Sentence for Director Behind Global Aircraft Parts Fraud

The UK Serious Fraud Office (‘SFO’) has secured a four years and eight months prison sentence for Jose Alejandro Zamora Yrala, director of AOG Technics, after investigators uncovered a £39.3 million aircraft parts fraud which involved selling more than 60,000 engine components with forged airworthiness certificates. The scheme, run from Zamora’s home in Surrey between 2019 and 2023, affected airlines and manufacturers worldwide, prompted safety alerts from UK, US and EU aviation regulators, and led to aircraft groundings and significant financial losses. Zamora pleaded guilty in December 2025 to fraudulent trading following an SFO investigation which revealed falsified documentation, fabricated employees, and doctored certificates used to pass off illegitimate parts as genuine.

FATF outlines rising cyber‑enabled fraud risks

The Financial Action Task Force (‘FATF’) has released a new paper examining the rapid growth of cyber‑enabled fraud and the associated money‑laundering, terrorist‑financing, and proliferation‑financing risks. The report highlights the scale of the problem, such as fraud representing over 40% of all crime in the UK and a 61% rise in scam cases in Singapore, and stresses that most jurisdictions now view fraud as a major laundering threat. FATF outlines how countries can use existing standards to improve payment transparency, strengthen asset‑recovery mechanisms, regulate virtual assets more effectively, enhance beneficial‑ownership transparency, and deepen domestic and international cooperation. The organisation also notes the increasing use of advanced technology by both fraudsters and financial‑intelligence units, and signals that fraud will remain a strategic priority in its work over the coming years.

Market Abuse

FCA Fines Seven Influencers for Promoting Unauthorised Investment Scheme

Seven social media influencers have been sentenced at Southwark Crown Court after admitting to issuing unauthorised financial promotions for a foreign exchange trading scheme, following an investigation by the UK Financial Conduct Authority. The individuals, whose combined Instagram following totalled 4.5 million, received a range of penalties including fines, conditional discharges and orders to pay costs. The FCA said the promotions breached the Financial Services and Markets Act 2000 and highlighted the risks associated with high‑leverage products, such as Contracts for Difference. The regulator reiterated its intention to work with responsible influencers while taking action against those who endanger consumers’ financial wellbeing.

Other Financial Crime

Why Tariff Turbulence Is Supercharging Trade‑Based Financial Crime

In an opinion piece from the World Economic Forum, it is argued that rapid shifts in tariffs, sanctions and global supply chains are creating fertile ground for trade‑based financial crime, with banks struggling to keep pace as criminals exploit volatility and outdated compliance systems. The article contends that traditional controls are no longer sufficient as illicit actors use AI, shell companies and complex rerouting tactics to obscure illicit flows, and it calls on financial institutions to adopt real‑time, intelligence‑led defences which integrate automation, advanced monitoring and geopolitical insight. The author frames the current moment as both a risk and an opportunity: a chance for banks to rebuild resilience by modernising their approach to detecting illicit activity across global trade networks.

Kentucky US Attorney’s Office Reports Over $35.5 Million Recovered in FY2025

The US Attorney’s Office for the Western District of Kentucky reported collecting more than $35.5 million in fiscal year 2025, including over $4.3 million from criminal actions and more than $31.2 million from civil matters, with an additional $6 million recovered through joint efforts with other DOJ components. Notable recoveries included payments in federal fraud cases, over $16 million from False Claims Act violations, and $9.5 million in unpaid taxes from a bankruptcy proceeding, alongside more than $1 million collected through asset‑forfeiture actions. Officials emphasised that these recoveries support restitution for victims and contribute to federal funds dedicated to victim compensation and assistance programmes.

Cybercrime

UK Court of Appeal Backs ICO in Landmark DSG Retail Case

The UK Information Commissioner’s Office has won a significant case in the Court of Appeal reinstating its £500,000 penalty against DSG Retail for a 2020 cyberattack which compromised the personal data of at least 14 million people, confirming that organisations must protect all personal data they process regardless of whether individuals can be directly identified from stolen datasets. The judgment overturns the Upper Tribunal’s earlier decision and clarifies that the duty to implement appropriate security measures applies broadly under the Data Protection legislation, offering important guidance for the current UK data‑protection regime. The case now returns to the First‑tier Tribunal to apply the clarified legal interpretation to the facts of the breach. The Court of Appeal judgment is here.

Former Defence Contractor Executive Sentenced for Selling Trade Secrets to Russian Broker

The US Department of Justice announced that a former general manager for a US defence contractor has been sentenced to 87 months in prison for selling stolen trade secrets to a Russian broker. According to the DOJ, the individual unlawfully transferred proprietary technical data related to defence technology and attempted to profit from the sale of sensitive information. The case was investigated by federal authorities as part of broader efforts to address the theft of US defence‑related intellectual property and protect national security interests.

Poll Finds Major NATO Publics View Cyberattacks on Critical Infrastructure as Acts of War

According to reporting from Politico, new polling across the United States, Canada, France, Germany and the United Kingdom shows that majorities in each country believe cyberattacks which disable hospitals or power grids should be considered acts of war, even as governments continue to struggle with how to respond to state‑linked hacking campaigns. The survey highlights growing public concern over increasingly frequent attacks attributed to Russia and other adversaries, including incidents targeting medical systems, energy infrastructure and telecommunications networks. While NATO has previously said that severe cyberattacks could trigger collective defence measures, the threshold for such a response remains unclear, and the article notes that public opinion is more hawkish than current policy.

UK police AI chief acknowledges bias risks in crime‑fighting technology

According to reporting by the Guardian, Alex Murray, the National Crime Agency’s lead for artificial intelligence, has said that police use of AI tools will inevitably contain some degree of bias but stressed that a new £115m national AI centre aims to identify, minimise, and manage these risks. Murray noted that systems such as facial recognition and predictive policing can reproduce historical prejudices embedded in training data, and he emphasised the need for rigorous testing, data cleaning, and officer training to prevent unfair outcomes. The article also highlights recent findings of bias in retrospective facial recognition systems, calls from oversight bodies for stronger safeguards, and examples of how AI is already accelerating investigations, while highlighting that human officers will remain responsible for final decisions.