Sanctions Watch | Weekly Vol. 97

Sanctions Watch Vol 97

In the latest edition of our Sanctions Watch weekly digest, we present significant updates on sanction watchlists and regulatory developments.

1. U.S. Grants Temporary Authorization for Wind-Down Transactions Involving International Bank of Yemen

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License No. 33 under the Global Terrorism Sanctions Regulations (GTSR), 31 CFR part 594. This license temporarily authorizes all transactions that are ordinarily incident and necessary to the wind-down of dealings involving the International Bank of Yemen (IBY), or any entity in which IBY holds a direct or indirect 50% or greater ownership interest.

The authorization is valid till May 17, 2025, and provides an important compliance window for U.S. and international financial institutions, businesses, and other stakeholders to disengage from any restricted activities tied to IBY. However, all such transactions must comply with OFAC protocols, including the requirement that any payment to a blocked person must be deposited into a blocked account in accordance with the GTSR.

Importantly, the license does not grant permission for transactions involving any other individuals or entities blocked under the GTSR, unless such activity is separately authorized by OFAC. This measure demonstrates OFAC’s targeted approach to sanctions enforcement—allowing for an orderly retreat from proscribed financial engagements while maintaining broader restrictions on terrorist financing networks.

The issuance of General License No. 33 reflects a calibrated move by the U.S. government to manage financial and operational risks associated with sanctions enforcement, giving stakeholders time to realign with legal and regulatory frameworks. It also underscores the continued pressure applied on institutions like IBY, which are presumed to play roles in activities counter to U.S. foreign policy and national security interests.

2. OFAC Cracks Down on Iranian Oil Sanctions Evasion with New Maritime Shipping Advisory

OFAC released a comprehensive advisory update aimed at helping global maritime and shipping stakeholders identify and mitigate risks associated with the evasion of U.S. sanctions on Iranian petroleum and petrochemical exports. The advisory builds on its 2019 guidance, integrating updates pursuant to the National Security Presidential Memorandum (NSPM-2), which enforces a maximum pressure campaign on Iran.

According to the advisory, Iran currently exports about 1.6 million barrels of crude oil and 0.4 million barrels of refined petroleum products daily, mainly through deceptive maritime practices. These include the use of a “shadow fleet”—a collection of aging, poorly maintained tankers—false documentation, automatic identification system (AIS) manipulation, and complex vessel ownership structures. These tactics are aimed at disguising Iranian cargo origins and evading detection.

The document details red flags and mitigation steps for shipping companies, charterers, port operators, insurers, and brokers. It emphasizes due diligence protocols, cargo origin verification, insurance scrutiny, vessel tracking, and robust Know Your Customer (KYC) and Know Your Vessel (KYV) procedures. The advisory also recommends enhanced contractual controls that allow stakeholders to terminate dealings upon identifying deceptive practices.

Key enforcement actions were also highlighted. From December 2024 through April 2025, over 86 individuals and entities and 85 tankers were sanctioned across more than 25 countries. These entities include brokers in the UAE and Hong Kong, and operators in India, China, and the Seychelles.

These advisory underscores the U.S. government’s aggressive enforcement posture and the imperative for maritime stakeholders to proactively safeguard against the risk of sanctions violations. Non-compliance may result in severe civil penalties or criminal prosecution, even for non-U.S. persons.

3. South Korea Enacts Tough New Sanctions to Crack Down on Market Abuse and Illegal Short Selling

The Financial Services Commission (FSC) of South Korea approved amendments to the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA), which will take effect from April 23, 2025. These revisions introduce powerful non-monetary sanctions aimed at curbing unfair trading practices and illegal short selling in capital markets.

The changes are designed to align South Korea’s regulatory regime with international standards and improve market discipline. Key measures include transaction bans, executive disqualifications, and payment freezes on accounts involved in suspicious activities. The FSC can now prohibit individuals involved in illicit trading from engaging in any financial investment transactions for up to five years. The restriction period is determined based on the severity, frequency, and financial gains resulting from the misconduct. Exemptions may apply under specific, justified circumstances.

Another critical measure is the restriction on such individuals from being appointed to executive roles in listed companies and financial institutions, particularly where their actions have significantly impacted market integrity. The FSC may also compel companies to remove such individuals if appointed in violation of the sanctions.

Additionally, the FSC gains authority to freeze payment activities on accounts suspected of being used for market manipulation or short selling violations. Such freezes can last up to one year and may be lifted upon confirmation of the account holder’s non-involvement or other valid legal conditions.

These reforms are expected to significantly deter repeat offenses, bolster investor protection, and foster a healthier capital market environment. The FSC emphasizes its commitment to work closely with other agencies and stakeholders to ensure timely and effective enforcement while continuing to refine processes for sanctions implementation and review.

4. US Congress Introduces “No Limits Act” Sanctioning China for Aiding Russian

The group of U.S. lawmakers reintroduced the “No Limits Act of 2025” (H.R. 2914) to the House of Representatives, targeting Chinese support for Russia’s military actions in Ukraine. The bill, led by chair of the House Select Committee on Countering Corruption to impose broad sanctions on Chinese individuals and entities aiding Russia’s aggression.

The proposed legislation focuses on penalizing Chinese companies and organizations that provide material support through dual-use technologies, defense-related cooperation, or financial transactions that empower Russia’s military efforts. A key component of the bill mandates that major Chinese firms cooperating with Russia must sever such ties within 180 days of enactment.

Furthermore, the bill authorizes the U.S. president to implement sanctions against those in China who bolster Russia’s military-industrial complex, engage in harmful cyber operations, facilitate arms sales internationally, or attempt to bypass existing sanctions. The aim is to curtail strategic support flowing from China to Russia, ensuring greater accountability and reinforcing international opposition to the war in Ukraine.

Ukraine’s Ambassador, publicly endorsed the initiative, emphasizing its significance in strengthening allied resistance to Russian aggression and reinforcing global sanctions frameworks. This legislative move underscores the growing bipartisan resolve in the United States to apply diplomatic and economic pressure on actors undermining global security.

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Sanctions Watch is a weekly recap of events and news related to sanctions around the world.