Sanctions regimes imposed by the UK, US, and EU remain among the most potent instruments of geopolitical influence, aiming to significantly shape the conduct of states, corporations, and individuals on a global scale. However, as these regimes expand and evolve throughout 2025, businesses and financial institutions face a daunting challenge, namely navigating conflicting rules, managing overlapping enforcement, and adapting to a rapidly shifting compliance landscape.
The Evolving Sanctions Landscape in 2025
The first half of 2025 has seen a significant escalation in new sanctions, particularly targeting Russia’s energy sector, “shadow fleet” and financial infrastructure. The UK, EU, and US have each introduced new designations, expanded asset freezes, and imposed fresh restrictions on the provision of technology, business services, and trade in high-risk goods. While there is broad alignment on major targets, such as Russia and, to a lesser extent, Iran and Syria—each jurisdiction maintains its own lists, rules, and enforcement priorities.
At the same time, there have been efforts to recalibrate sanctions in response to changing geopolitical realities, such as the coordinated easing of sanctions on Syria following regime change. This dynamic environment increases the complexity for global businesses, especially those with cross-border operations or supply chains.
Key Areas of Divergence and Overlap
Despite shared strategic objectives, the UK, US, and EU sanctions regimes diverge in several key areas. These differences range from designation scope to enforcement mechanisms and pose significant compliance risks for global businesses.
- Scope and Targets
- Although the UK, US, and EU frequently designate the same individuals and entities, they often differ in the breadth of restrictions imposed and the legal rationale underpinning those measures.
- For example, the UK’s 2025 sanctions package introduced new restrictions on the export of business software and technology to Russian-linked entities. In contrast, the EU has intensified its focus on disrupting Russia’s “shadow fleet” operations, while the US continues to lead on secondary sanctions, targeting third-country facilitators and intermediaries.
- Enforcement and Compliance
- Enforcement models vary: the UK’s Office of Financial Sanctions Implementation (OFSI) and the US Treasury’s Office of Foreign Assets Control (OFAC) have distinct processes for investigations, penalties, and licensing.
OFSI operates under HM Treasury and follows a primarily administrative enforcement regime. OFSI can impose monetary penalties for breaches of financial sanctions, even in the absence of intent or knowledge, under a strict liability standard introduced by the Economic Crime (Transparency and Enforcement) Act 2022.
In contrast, the US operates under a more aggressive and extraterritorial model, led by the OFAC within the US Treasury Department. OFAC has wide-ranging authority to impose civil and criminal penalties. OFAC also actively investigates “causing violations” and facilitation, expanding liability to third parties. It uses a risk-based approach, emphasising self-disclosure, cooperation, and the presence (or absence) of a compliance programme as key mitigating or aggravating factors.
- The UK has expanded reporting requirements in 2025, now covering high-value dealers, art market participants, letting agents, and insolvency practitioners, while the US and EU are also tightening compliance expectations for non-financial sectors.
OFAC’s 2025 compliance advisories have targeted industries such as real estate, maritime logistics, fintech, and professional services, highlighting their vulnerability to indirect sanctions violations by facilitating or obscuring sanctioned transactions through intermediaries.
Similarly, the EU has introduced harmonised compliance standards under the 2025 EU Sanctions Directive. The Directive outlines new obligations for gatekeeper professions, such as lawyers, notaries, auditors, and corporate service providers to conduct due diligence, report potential breaches, and avoid facilitating asset concealment for sanctioned persons.
- Coordination and Conflict
- Although there is regular coordination among the UK, US, and EU on major sanctions initiatives, substantive differences remain. For instance, the US may impose secondary sanctions on non-US entities dealing with sanctioned parties, creating extraterritorial risk for EU or UK firms.
- Conversely, the recent coordinated easing of sanctions on Syria demonstrates how policy shifts can occur in parallel, but not always identically, across jurisdictions. In response to political developments and a change in leadership in Syria, the UK, US, and EU each announced measures to relax certain aspects of their existing sanctions regimes. However, despite a shared policy objective namely, to facilitate humanitarian aid, support post-conflict reconstruction, and re-engage with civil society, the legal and practical implementation of these measures has diverged in key respects.
While the EU permitted limited transactions for humanitarian and reconstruction purposes, the US adopted a narrower approach focused on specific non-governmental activities, and the UK maintained strict controls via case-by-case licensing.
This divergence poses serious compliance risks, as transactions lawful in one jurisdiction may violate another’s rules. Cross-border dealings require careful legal assessments and robust due diligence.
Overlapping Enforcement: Risks and Realities
With agencies in each jurisdiction empowered to investigate and penalise breaches, companies face the risk of double jeopardy being pursued by multiple authorities for the same conduct. In 2025, the UK and US have taken steps to formalise enforcement cooperation, including a new memorandum of understanding to share intelligence and coordinate actions. The EU has launched a Helpdesk to support SMEs in navigating compliance, reflecting the growing complexity of the regulatory environment.
Enforcement priorities for 2025 include:
- Targeting circumvention and evasion, particularly through third countries and new technologies
- Expanding the scope of reporting and compliance obligations
- Increasing transparency and regular publication of enforcement actions
Navigating Compliance: Practical Steps
To manage the risks of conflicting and overlapping sanctions regimes, businesses should:
- Maintain up-to-date screening against all relevant lists of sanctions (UK, US, EU) for counterparties, vessels, and transactions.
- Conduct enhanced due diligence for high-risk jurisdictions and sectors, especially where secondary sanctions may apply.
- Monitor regulatory updates and guidance from all relevant authorities, including new reporting obligations and enforcement trends.
- Document compliance efforts and decision-making processes to demonstrate good faith and mitigate enforcement risk.
- Seek specialist legal advice when operating in areas of potential conflict, such as transactions involving sanctioned entities or cross-border trade with high-risk countries.
Conclusion
In 2025, the challenge for global businesses is not just understanding what is sanctioned, but where, by whom, and how enforcement will be pursued. The UK, US, and EU continue to align on many objectives, but conflicting rules and overlapping enforcement are a reality.
Proactive compliance, robust due diligence, and a clear understanding of each regime’s nuances are essential for navigating this complex terrain and for avoiding the severe penalties associated with breaches or regulatory failures.
Linkilaw is well-positioned to assist businesses in managing these challenges, offering strategic advice and legal guidance tailored to ensure effective compliance across multiple sanctions regimes.
