Sanctions and Export Controls Update

Monthly Roundup – May 2025

📅 June 3, 2025

Welcome to this month’s Sanctions and Export Controls Update, highlighting IFI’s take on key developments from May 2025.

The United States, EU, and UK advanced sanctions and export control measures targeting drug trafficking, geopolitical threats, and the war in Ukraine. The U.S. sanctioned Mexico’s CJNG cartel and issued broad Syria sanctions relief following President Trump’s announcement to lift restrictions post-Assad. The Commerce Department also scrapped the AI Diffusion Rule, opting for stricter chip export controls to counter China.

The EU adopted its 17th Russia sanctions package, extended cyber-attack measures, and lifted economic sanctions on Syria. It also sanctioned Russian actors involved in hybrid threats. The UK updated its export control list, issued new financial sanctions on Russia-linked entities, and introduced 100 additional designations targeting Russia’s military, energy, and propaganda networks.

United States

May saw significant shifts in U.S. sanctions and export control priorities, including immediate relief for Syria following the Assad regime’s fall, and a reinforced export control approach to AI and semiconductors. Additionally, the United States sustained its aggressive posture against transnational criminal organizations with new designations tied to the CJNG cartel.

Drug Cartel Sanctions

The Treasury Department imposed sanctions on three Mexican nationals, including CJNG leader César “Primito” Morfín Morfín, and two companies involved in fuel theft and fentanyl trafficking. The designations target CJNG’s diversification into crude oil smuggling, an increasingly lucrative revenue stream that finances cartel violence and narcotics trade. Concurrently, the Treasury Department’s FinCEN issued an alert for financial institutions outlining typologies and red flags to detect related illicit finance.

May 1: Treasury Targets Major Mexican Cartel Involved in Fentanyl Trafficking and Fuel Theft

AI and Export Controls

The Department of Commerce rescinded the Biden-era “AI Diffusion Rule,” citing risks to innovation and diplomacy. The Trump Administration unveiled plans for a replacement strategy focused on collaboration with allies and strengthened chip-related export controls to prevent Chinese access to advanced semiconductors. A new guidance advisory warns against the use of Chinese chips and outlines critical infrastructure protections.

May 13: Department of Commerce Rescinds Biden-Era Artificial Intelligence Diffusion Rule, Strengthens Chip-Related Export Controls

Syria Sanctions Relief

President Trump announced a plan to lift U.S. sanctions on Syria, citing the fall of the Assad regime and the establishment of an interim government under Ahmed al-Sharaa. This policy shift was framed as a step toward normalization and reconstruction, following consultations with Türkiye and Saudi Arabia.

Following Trump’s announcement, OFAC issued General License 25 (GL 25), authorizing transactions across all sectors of the Syrian economy, provided they do not involve designated terrorist organizations. A new waiver under the Caesar Syria Civilian Protection Act has also been issued to allow foreign partners, allies, and the region to invest in Syria.

May 13: Trump announces plan to lift sanctions on Syria
May 23: Treasury Issues Immediate Sanctions Relief for Syria

European Union

The EU intensified its sanctions strategy in May 2025, focusing on Russia’s hybrid threats and continued aggression in Ukraine. It adopted its 17th sanctions package targeting Russia’s shadow fleet, dual-use imports, and 75 new individuals and entities. In response to rising cyber threats, the EU extended its cyber sanctions regime and expanded listings for actors engaged in digital espionage and propaganda. The EU also lifted all remaining economic sanctions on Syria following the fall of the Assad regime, signaling support for reconstruction under new leadership. These actions reflect a broader effort to reinforce EU security and uphold international law.

Russia Sanctions

The EU adopted its 17^th sanctions package against Russia since its military invasion of Ukraine. This package targets Russia’s shadow fleet of oil tankers, adds 75 new individual and entity listings, and imposes stricter trade controls on military-use technologies. It also extends an oil price cap exemption for Japan’s energy security. The sanctions have significantly reduced Russia’s oil revenues and access to critical goods, with the EU stressing continued international coordination and efforts to prevent circumvention.

The EU also imposed new sanctions on 21 individuals and six entities involved in Russia’s destabilizing activities abroad, including media manipulation, espionage, cyberattacks, and propaganda. These measures expand the EU’s ability to target tangible assets and financial operations supporting such activities, and allow for suspending Russian media broadcasts within the EU. Key figures listed include pro-Russian propagandists, intelligence operatives, and companies engaged in surveillance and disinformation campaigns, particularly in Ukraine, the EU, and Africa.

Syria Sanctions Lifted

On May 20, the EU lifted all remaining economic sanctions on Syria to support the country’s recovery following the fall of Bashar al-Assad’s regime, aligning with a similar move by the U.S. under Donald Trump. While aiming to encourage stability and inclusive governance under interim president Ahmed al-Sharaa, the EU warns sanctions could return if commitments are not upheld. Restrictions on arms, surveillance tools, and individuals tied to Assad remain in place.

May 20: EU Lifts all economic sanctions on Syria

Cyber Threats

The EU extended its sanctions against cyber-attacks threatening the Union and its member states until 18 May 2026, with the legal framework for these measures prolonged until 2028. These targeted sanctions, such as asset freezes and travel bans, apply to individuals and entities involved in significant cyber-attacks and aim to deter malicious cyber activity and uphold international norms. Currently affecting 17 individuals and four entities, the measures are part of the EU’s broader cyber diplomacy efforts and will be reviewed annually.

May 12: Cyber-attacks: Council extends sanctions and legal framework

United Kingdom

The UK advanced a robust sanctions agenda in May, including 100 new Russia-related designations targeting the drone supply chain, shadow fleet operations, and financial networks. The UK also updated its export control regulations to align with global regimes and introduced an “Open General Export Licence” to ease military exports to trusted allies. Financial sanctions were imposed on Russian-linked energy firms, while sanctions on five Zimbabwe-related targets were lifted in coordination with the U.S. and EU. Together, these steps reflect the UK’s dual strategy of tightening pressure on adversaries while signaling flexibility toward reengagement where reforms are underway.

Russia Sanctions Expansion

The UK imposed financial sanctions, including asset freezes and trust service restrictions, on five individuals and four entities linked to Russia’s energy and financial sectors. The individuals, mainly Azerbaijani nationals, were directors of Coral Energy Group (now 2Rivers Group), BX Energy, and Nord Axis Ltd, which are companies involved in trading Russian oil and operating in sectors of strategic importance to the Russian government. The action, under the Russia (Sanctions) (EU Exit) Regulations 2019, supports the UK’s ongoing efforts to pressure Russia over its aggression toward Ukraine.

The UK also announced 100 new sanctions targeting Russia’s military, energy, financial sectors, and propaganda networks in response to Putin’s largest drone attack on Ukraine. These measures aim to disrupt weapons supply chains, oil revenues, and sanctions evasion networks, including shadow fleet operations and financial institutions. The UK is also working with partners to tighten the Oil Price Cap, further undermining Russia’s war economy and pressuring Putin to agree to an unconditional ceasefire.

May 9: OFSI Financial Sanctions Notice
May 20: UK announces major sanctions in support of Ukraine

Export Control Revisions

The Export Control (Amendment) Regulations 2025, effective 20 May 2025, update the UK’s strategic export control list by amending the Export Control Order 2008 and the assimilated Dual-Use Regulation. Key changes include increasing fines for certain offences, updating military and dual-use goods lists to reflect technical changes agreed through multilateral regimes like the Wassenaar Arrangement, and aligning with updates from other international control groups such as the Australia Group and Nuclear Suppliers Group. These revisions aim to maintain consistency with global export control standards.

May 2: UK Export Control (amendment) Regulations 2025

Open General Export Licence (OGEL)

The UK Secretary of State has approved an “Open General Export Licence (OGEL)” allowing the export and re-export of certain military goods, software, and technology to specified low-risk destinations. Exporters must provide required documentation, maintain transaction records for audit purposes, and ensure shipments go only to authorized countries, NATO entities, contractors, and armed forces. The OGEL is designed to streamline exports while ensuring compliance with UK export controls.

May 9: Open General Export Licence: Military Goods, Software and Technology: Government or NATO end use

Zimbabwe Delisting

The United Kingdom has removed five Zimbabwean individuals and one entity from its sanctions list, signaling a shift in its approach toward the country. Those delisted include Owen Ncube, Midlands provincial affairs minister; Anselem Sanyatwe, sports minister; Isaac Moyo, director-general of the Central Intelligence Organisation; Godwin Matanga, former police commissioner-general; and Zimbabwe Defence Industries (ZDI), the state-owned arms manufacturer. This development follows the European Union’s decision in February to lift sanctions on ZDI while renewing its broader Zimbabwe sanctions framework. Similarly, the United States eased its stance in March 2024 by removing several Zimbabwe-related designations.

May 27: Update on Zimbabwe: Lifting sanctions on 4 individuals and 1 entity

Recommended Blogs

Lessons From Russia & Iran – What EU Sanctions Teach Us About Policy in Action

May 29, 2025

The EU’s Russia and Iran sanctions programs demonstrate using sanctions as strategic tools of influence, while also exposing the challenges in enforcement and importance of global coordination.

Trump’s IEEPA Tariffs – Blurring the Lines Between Trade Sanctions and Traditional Tariffs

May 13, 2025

The Trump administration’s unprecedented use of tariffs as a tool of national security and foreign policy to compel countries to change policies the U.S. opposes has blurred the lines between tariffs and trade sanctions.

April 2025 Sanctions & Export Controls Update

May 5, 2025

Explore this month’s Sanctions and Export Controls Update, highlighting IFI’s take on key developments from the U.S., EU and UK in April 2025.

Intensifying Focus on Export Control Compliance by Banks

April 16, 2025

This article recaps BIS export control guidance to banks, assesses the likelihood of enforcement action this year, and sets out actions Chief Compliance Officers can take to improve their export control compliance program.

Syndicates of Terror

April 4, 2025

Eight Latin American drug cartels were recently designated by the United States as Foreign Terrorist Organizations and Specially Designated Global Terrorists. The U.S. designation enhances compliance risks for financial institutions and other companies transacting in Latin America.

Export Controls, Ethics & Human Rights in Global Trade

April 1, 2025

International trade is vital for economic growth and global relations, but it involves complex ethical and legal issues, especially regarding human rights. Explore dual use goods, human rights considerations, international regulatory frameworks, and actions for businesses further in this article.