Key Takeaways | Enforcement Outlook | Sanctions Trends and Emerging Risks

Sanctions enforcement is intensifying amid heightened geopolitical tensions, rapid innovation in digital assets, unprecedented coordination among US enforcement authorities, and increasingly assertive approaches in the EU and UK. The US Department of the Treasury (Treasury), including the Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN), is expanding its enforcement reach while working more closely with the Department of Justice (DOJ), Department of Commerce (Commerce), and other agencies. Recent enforcement actions, proposed rulemakings, and legislative developments signal increased expectations for companies to understand and manage sanctions risk across industries — from financial services and FinTech to education and other nontraditional sectors.

Our cross-practice team examined the current sanctions landscape, recent enforcement actions, and emerging government priorities. The discussion offered practical insights into regulatory risk, compliance challenges, and where enforcement is headed.

Top takeaways included:

1. Shift in OFAC Priorities: In 2025 and 2026, the focus of OFAC’s designation and enforcement activities shifted beyond Russia to include the pursuit of a “maximum pressure” campaign targeting Iran, the prevention of cryptocurrency-related frauds and scams, and the combatting of cartels and transnational criminal organizations. However, the Russian energy sector remains a focus for sanctions.
2. “Gatekeeper” Conduct and Moving Beyond the 50% Rule: Recent enforcement actions illustrate that OFAC is targeting entities and professionals that continue to service blocked persons, including venture capital funds and investment advisers. Additionally, OFAC’s 50% rule is not a ceiling for what entities a blocked person may have an interest in; rather, blocked persons may have a property interest in an entity, despite having an ownership interest below 50%, depending on the blocked person’s relationship with the entity.
3. Non-Traditional Sectors for Enforcement: OFAC is increasingly looking beyond the financial sector to identify violations of sanctions programs. For instance, a Florida-based school was recently penalized for accepting tuition payments from blocked individuals. While industry and geographic location can be important factors for sanctions exposure, actors operating in all sectors must remain vigilant for sanctions risks.
4. Increased Interagency Coordination: Federal agencies are increasingly engaged in coordinated efforts regarding various focus areas, including cryptocurrency-related fraud, domestic public benefits fraud, and cartels, with OFAC playing a role in various efforts.
5. EU Sanctions Shift to Systemic Controls: Recent EU sanctions packages relating to Russia have moved beyond traditional listings and now focus on enforcement architecture, anti circumvention measures, and control of financial channels. Directive (EU) 2024/1226 criminalizes core sanctions breaches across 27 Member States (including corporate liability and sanctions violations as a money laundering predicate) and strengthens investigative and confiscation powers, marking a step change in enforcement capability.
6. UK Sanctions Reforms: OFSI’s updated enforcement and penalties guidance introduces a more structured and transparent enforcement framework, with formal seriousness assessments and a more predictable penalty methodology. New early resolution tools – an Early Account Scheme (up to 20% reduction) and a Settlement Mechanism (a further 20%) – incentivise prompt cooperation, while enforcement priorities centre on sanctions evasion, professional facilitation, and reporting failures.

McDermott Will & Schulte’s Enforcement Outlook webinar series is designed to keep you up to date on the enforcement trends that might impact your organization’s compliance strategy. For more materials related to past episodes, visit our Enforcement Outlook Series hub.