Global Regulation Tomorrow

In parallel with shifting foreign policy objectives and geopolitical change, we are seeing a wave of regulatory action concerning sanctions across the United States, Canada, the European Union and the United Kingdom. Our international trade and sanctions team outlines some of the key developments below, including enforcement and key jurisdictions targeted by authorities.

United States

• Regulatory Developments: In a series of actions beginning January 2026, the Office of Foreign Assets Control of the US Department of the Treasury (OFAC) issued a suite of new Venezuela-related general licenses that collectively mark a significant evolution in U.S. sanctions policy toward Venezuela’s energy sector.  Notably, OFAC issued General License (GL) 46 in late January to authorize certain activities involving Venezuelan-origin oil (which was subsequently replaced by GL 46A in February), followed by GL 30B in February to facilitate port and airport operations, and on March 4 issued new guidance around GLs 48, 49, and 50A that opens additional pathways for due diligence, contingent contracting, and certain oil and gas sector operations, subject to conditions and exclusions.  At the same time, OFAC has continued to police sensitive transactions through targeted restrictions and interpretive guidance, including on resale of Venezuelan-origin oil to Cuba, signalling that U.S. policy is not a wholesale rollback of Venezuela sanctions but rather a controlled easing for specified commercial activity viewed by the U.S administration as consistent with current U.S. policy.
• In another notable development, the U.S. government used the Protecting American Intellectual Property Act (PAIPA) for the first time to sanction a Russia-based zero-day exploit broker, Sergey Zelenyuk, his company Operation Zero, and related affiliates for the acquisition and sale of stolen U.S. cyber tools and trade secrets that Treasury said were harmful to U.S. national security.  Treasury stated that the network acquired at least eight proprietary cyber tools developed exclusively for the U.S. government and select allies and paired the State Department’s PAIPA designations with OFAC cyber-related designations under E.O. 13694, as amended, as well as related SDN listings for associated individuals and entities.  This coordinated action is significant for companies with sensitive technology and IP because it shows that the U.S. government is prepared to treat major trade secret theft not merely as a criminal or civil enforcement matter, but as a sanctions issue where the theft is viewed as materially threatening U.S. national security or foreign policy interests.  More broadly, the action signals that PAIPA may become a more regular sanctions tool in high-impact IP theft and cyber-enabled misappropriation cases, particularly where stolen technology has dual-use, intelligence, or government-facing applications.
• Lastly, against a backdrop of heightened regional escalation, the Administration has continued to sharpen its Iran sanctions.  In January and February 2026, OFAC imposed additional sanctions on shadow-fleet vessels, operators, and illicit petroleum traders, and on February 25 Treasury sanctioned more than 30 individuals, entities, and vessels tied to Iranian petroleum sales, ballistic missile procurement, advanced conventional weapons production, and UAV-related networks.  Separately, on February 27, the State Department designated Iran as a “State Sponsor of Wrongful Detention,” underscoring the Administration’s willingness to pair traditional Iran program sanctions with newer detention-related authorities as part of a broader pressure campaign.
• At the same time, the Administration has adopted a revised approach to energy market disruption through the issuance of Russia GL 133.  On March 5, 2026, OFAC issued Russia GL 133 which authorizes transactions “ordinarily incident and necessary to the sale, delivery, or offloading” of Russian-origin crude oil and petroleum products (collectively, “products”) to India.  Notably, GL133 explicitly authorizes transactions where Russian-origin products are “produced by entities sanctioned” under certain Russian and Iranian sanctions programs, and/or loaded onto “vessels blocked” under these programs.  In a social media post on March 5, 2026, U.S. Treasury Secretary Bessent commented that GL 133 is designed as a “short-term measure” to “enable oil to keep flowing to market”, authorizing transactions “involving oil already stranded at sea”. 
• Enforcement: OFAC’s public enforcement docket in early 2026 has been limited in volume but clear in message.  To date, OFAC had announced two public civil enforcement actions totalling over five million USD, against IMG Academy and an individual who provided managerial services to Syrian companies.  The enforcement highlights suggest that OFAC remains focused less on novel theories than on core compliance failures, particularly dealings with blocked persons, inadequate screening, and the absence of risk-based controls even outside traditional financial-sector settings.
• In 2026, export control enforcement appears to be centred on high-end technology, China- and Russia-related diversion risk, and strong expectations for enterprise-wide compliance controls.  The U.S. Department of Commerce, Bureau of Industry and Security’s (BIS) early 2026 actions already reflect that emphasis: in February, BIS imposed a $252 million penalty on Applied Materials for unlicensed semiconductor-equipment exports involving a China Entity List customer, describing it as the second-highest BIS penalty ever and requiring audits and compliance certifications as part of the resolution.  The U.S. Department of Justice continued to pursue criminal cases tied to sensitive microelectronics and Russia-related procurement networks, including an 18  February  sentencing involving a scheme to export U.S.-origin sensitive microelectronics to Russia.  In 2026, we anticipate intensified scrutiny of semiconductor, AI, and other advanced‑technology supply chains; increased focus on indirect routing, foreign affiliates, and reexport or assembly pathways; and ongoing coordination between BIS and DOJ.
• Jurisdictions of interest For 2026, companies should expect OFAC and BIS to remain most focused on Russia, Iran, China, and Venezuela, with Cuba and North Korea continuing to present elevated baseline risk, and with increasing scrutiny on third-country diversion hubs used to route sensitive goods or funds.

Canada

• Regulatory developments:
  • Guidance documents: In November 2025 Global Affairs Canada (GAC) provided additional guidance on sanctions compliance and expanded its FAQ to help industry comply with the Canadian sanctions regime. The guidance offers limited additional direction on compliance program expectations and red flag indicators. See Norton Rose Fulbright Canada’s update for more details.Expanded sanctions against Russia under the Special Economic Measures (Russia) Regulations: The Government of Canada has continued to expand its sanctions on Russia, with a recent focus on combatting Russia’s shadow fleet and energy sector. These measures are designed to further increase the economic costs on Russia for its invasion of Ukraine by restricting Russia’s energy revenues and financial, including cryptocurrency infrastructure, while degrading Russia’s military capabilities.
  • Lifting sanctions under the Special Economic Measures (Syria) Regulations: In February 2025, the Government of Canada lifted broad sectoral prohibitions relating to the import and export of goods, investment activities, and financial services. The amendments aim to ease barriers to economic activity and enable transactions in order to facilitate humanitarian-related and other transactions in Syria. The designation criteria were expanded to capture those persons tied to human rights abuses or activities undermining Syria’s stability. Under the amendments, Canada de-listed two individuals and 24 entities, and sanctioned 6 individuals identified as being involved in gross and systematic human rights violations.

• Enforcement: The Government of Canada has been gradually increasing its sanctions enforcement measures
  • First-ever criminal charges under the sanctions against Russia: Following a three-year investigation, an individual was arrested and charged in June 2025 for exporting banned technology to Russia contrary to Canada’s sanctions regime against Russia (the Special Economic Measures (Russia) Regulations).First-ever forfeiture proceeding under the Special Economic Measures Act (SEMA): The Government of Canada has launched its first sanctions forfeiture proceeding against a seized an Antonov aircraft, which is owned, held or controlled by two Russian entities that have been sanctioned by Canada. The aircraft has been at Toronto’s international airport since Russian airlines were prohibited from using Canadian airspace in February 2022. After issuing seizure orders in 2023 and again in early 2025, the Attorney General of Canada filed a Notice of Application on March 18, 2025, to forfeit the aircraft under SEMA’s property‑forfeiture mechanism. Uniquely, under this provision, Canada does not need to demonstrate that the aircraft was used in a sanctions violation, only that it is property of sanctioned persons.
  • Establishment of a dedicated law enforcement entity: Canada has recently announced the establishment of a proposed federal Financial Crimes Agency dedicated to combatting sophisticated financial crimes, including money laundering. It is anticipated to launch in spring of 2026. Additional details will be announced in the near future

• Jurisdictions of interest:  Russia remains the main target of GAC. It is clear that Canada will continue to use sanctions as a foreign policy tool designed to help degrade Russia’s military capabilities and ability to generate energy-related revenues to fund its aggression against Ukraine.
• Further developments to Canada’s sanctions regime against Iran are anticipated as the Government of Canada’s reassesses its position in light of ongoing developments in the Middle East. On February 13, 2026, Canada amended the Special Economic Measures (Iran) Regulations to sanction seven individuals who were identified as having engaged in activities that undermine international peace, security or stability in a manner that is consistent with the policies of Iran. 

European Union

• Regulatory developments: To date, the approach to enforcement of violations of EU sanctions has varied across EU Member States, which has weakened their overall effectiveness.To address this, the EU adopted Directive (EU) 2024/1226 (EU Sanctions Directive) in April 2024, which introduces, among others, harmonized minimum penalties for EU sanctions violations. However, implementation of the EU Sanctions Directive has also differed across EU Member States. Germany, for example, missed the May 2025 implementation deadline due to new elections and legislative discontinuity, which triggered infringement proceedings by the EU. Ultimately, Germany enacted the “Act on the Adjustment of Criminal Offences and Sanctions for Violations of Restrictive Measures of the European Union” (the Implementing Act) in January 2026, which has been in force since 6 February 2026. The Implementing Act significantly strengthens German foreign trade criminal law by expanding the catalogue of criminal offences, criminalizing specific circumvention conduct, upgrading numerous administrative offences to criminal offences, and extending criminal liability to certain forms of reckless behaviour involving dual‑use items. It also abolishes the former “48‑hour grace period”, substantially increases potential corporate fines to up to EUR 40 million, and introduces a framework for placing certain companies under public trusteeship within the meaning of Article 5aa (2f) lit. a) of Regulation (EU) No. 833/2014. The reform represents a major step towards harmonized enforcement of EU sanctions across the EU while simultaneously tightening criminal sanctions law for economic operators, which further elevates the importance of effective compliance risk management structures. For a more in-depth discussion on the implications for EU operators, please see our latest update here.

• Enforcement: Recent enforcement activity by national enforcement authorities clearly intensified with respect to EU sanctions. Consequently, we expect the volume of related criminal proceedings to steadily increase. In addition, Europol has reinforced its operational support to EU Member States with the establishment of a “Target Group Sanctions”, a new team within its European Financial and Economic Crime Centre dedicated to identifying and disrupting criminal networks involved in sanctions evasion. Launched in November 2025, the unit uses Europol’s intelligence, analytical and financial-tracing capabilities to help investigators uncover illicit trade routes, track financial flows and detect related criminal activities, such as money laundering, customs fraud and document forgery. Europol has also partnered with the European Anti-Fraud Office (“OLAF”) in “Project Transporter” which targets vehicle exports routed through third countries and suspected of being diverted to Russia or Belarus, responding to increasing misuse of forged documents and illicit financing. In January 2026, OLAF reported a successful joint operation uncovering more than 760 vehicles falsely declared as destined for Turkey but ultimately transported to Russia, leading to criminal proceedings in three EU Member States.

• Jurisdictions of interest: Although the EU failed to agree on new sanctions against Russia ahead of the four‑year anniversary of Russia’s invasion of Ukraine, Russia remains a central focus for EU regulators. Recent sanctions packages included, inter alia, a ban on imports of Russian liquified natural gas starting 1 January 2027 for long‑term contracts, and within six months of the entry into force of the sanctions for short‑term contracts. In addition, on 15 January 2026, the EU applied for the first time its new automatic and dynamic mechanism for adjusting the price cap on Russian crude oil. Furthermore, and in line with the UK’s approach, the EU’s stance on Iran continues to evolve. In January 2026, the EU adopted new sanctions in response to “serious human rights violations and Iran’s continued support for Russia’s war of aggression against Ukraine”. In February 2026, the EU also added the Islamic Revolutionary Guard Corps of Iran to its terrorist list. However, the current situation in Iran, and more broadly in the Middle East, is expected to continue shaping potential future EU measures.

• Increased convergence between sanctions and AML compliance: Irrespective of specific sanctions programs or targeted sectors, we are seeing an increased convergence between sanctions and anti-money-laundering (AML) risks and related compliance. Recent regulatory actions, particularly the inclusion of targeted financial sanctions risks within the scope of the new EU AML Regulation (EU) No. 2024/1624, underscore the EU legislator’s intention to promote a more integrated approach to risk management. Enforcement authorities also recognize the growing interconnection between sanctions and AML frameworks, reflected in closer cooperation in investigations. Notably, customs investigations into sanctions breaches are now frequently triggered by suspicious activity reports (SARs) submitted to the Financial Intelligence Units (FIUs). For companies, this development requires a strategic reassessment of internal processes to address these intertwined obligations and to mitigate associated risks.

United Kingdom

• Regulatory developments:  The Office of Financial Sanctions Implementation (OFSI) has announced changes to its enforcement processes, notably including the introduction of:
  • a settlement scheme  (those agreeing to settle will be eligible for a 20% discount off the baseline penalty),an early account scheme (which again attracts a 20% discount off the baseline penalty), and
  • doubling the maximum penalty that OFSI can impose for a breach of financial sanctions – the maximum penalty will now be the greater of GBP 2 million or the total value of the breach. 

OFSI has also called for evidence seeking industry’s views on the approach to ownership and control under UK sanctions regulations and how it is being “applied in practice”, which indicates an intention to grapple with an area that has attracted conflicting views from both industry participants and the English courts

• Enforcement:  UK authorities continue to engage in enforcement action:
  • Financial sanctions: In November 2025, OFSI imposed a £160,000 fine on the Bank of Scotland for breaches of financial sanctions under the UK’s sanctions targeting Russia.  The Bank processed 24 payments to or from a personal current held by a UK designated person. Due to its voluntary disclosure of the breaches, the Bank was granted a 50% discount to the original penalty. OFSI recently published a blog on key lessons for industry arising from this enforcement action, including the importance of screening data and its configuration, the inherent risks arising from automated screening processes, emphasis on training content being tailored to the current geopolitical landscape, and demonstrating that voluntary disclosures can shape enforcement outcomes.Trade sanctions: The Office of Trade Sanctions Implementation recently commented that it has five “late-stage” investigations near potential enforcement actions.
  • Export controls: His Majesty’s Revenue & Customs (HMRC) continues to pursue active enforcement, having recently (a) prosecuted an individual for illegally exporting military-classified rifle sights to Hong Kong SAR in February 2026 who received a short custodial sentence;  and  (b) fined an exporter approximately £620,000 for unlicensed exports of military goods.

On 10 March, the UK government published a policy paper outlining its strategic approach to sanctions enforcement, outlining the respective roles and responsibilities of different regulatory responsibilities in the UK, providing an overview of licensing and reporting suspected breaches, its approach to civil and criminal enforcement, and outlining the four principles that drives its approach to sanctions enforcement (driving compliance, proportionality and fairness, transparency, and due process). The paper is available here.

• Jurisdictions of interest:   Russia remains a core focus for UK regulators, with nearly 300 new designations announced to mark the four-year anniversary of Russia’s invasion of Ukraine.  The UK’s position on Iran continues to evolve – in January 2026, the Foreign Secretary announced that it would be looking to impose further sanctions and other sectoral measures on Iran, including working together with its colleagues in Europe on potential sanctions packages. However, recent developments will likely impact the approach of the UK and the EU in the coming months.

• Areas of focus: In line with our last update, decentralised finance and digital assets continue to attract regulatory scrutiny. In January 2026, OFSI published a blog on the abuse of cryptoassets to facilitate sanctions evasion, noting that it had recently joined forces with the multi-agency Crypto Cash Fusion Cell (CCFC) to “target criminal funds linked to sanctions offences”. We have already seen a number of crypto-related enforcement actions in the US and expect the UK to continue increasing its focus in this area.