Sanctions in 3D

Where the Three Regimes Part Ways

The most consequential divergence is on secondary sanctions—the extraterritorial application of sanctions to non-US persons for conduct outside US territory. OFAC’s secondary sanctions authority allows it to penalise any entity worldwide that facilitates transactions with sanctioned persons, regardless of any connection to the United States. Executive Order 14114, signed in December 2023, expanded this authority by targeting foreign financial institutions that facilitate significant transactions with designated Russian entities—with OFAC defining “significant” by reference to factors including transaction size, frequency, nature, awareness of US nexus, and the significance of the transaction to US sanctions objectives. Neither the EU nor the UK has equivalent authority. The EU requires an EU nexus—an establishment, financial system access, or conduct within the bloc—for jurisdictional reach. The UK similarly requires a UK nexus.

This asymmetry has profound practical implications. A company incorporated in Singapore, banking in Hong Kong, and trading commodities through Dubai could face OFAC enforcement for dealings with a Russian counterparty even with zero US touchpoints. The same transaction would fall outside EU and UK jurisdiction entirely. Compliance teams must therefore treat OFAC as the de facto global regime and build screening architecture accordingly.

On energy sector treatment, the divergence is equally stark. In July 2025, the EU and UK aligned on lowering the Russian oil price cap to $47.60 per barrel—a significant tightening from the original $60 ceiling. The United States did not follow. The split reflects different energy security calculations: the US, as a net energy exporter, faces minimal domestic supply risk from tighter caps, but resisted lower caps over concerns about global supply disruption and enforcement complexity. Europe, meanwhile, sought to reduce Russia’s petroleum revenues while maintaining supply through the price cap mechanism.

Designations, Enforcement, and Penalties

The raw numbers underscore the scale of the compliance challenge. As of early 2026, OFAC maintains approximately 1,465 active Russia-related designations on its SDN list—a programme larger than any other in OFAC’s history. For context, approximately 10,000 parties were added to the entire SDN list over the 20 years preceding February 2022. The annual flow data reveals the escalation trajectory: OFAC added 2,275 SDN entries in 2022, accelerated to 3,135 in 2024, and added 1,764 in the first half of 2025 alone—of which 442 were designated under the Biden administration and 1,322 under the Trump administration, reflecting a bipartisan ratchet effect where successive administrations compete to demonstrate sanctions resolve. The EU has sanctioned over 2,100 individuals and entities across 19 packages. The UK’s consolidated list reached 4,733 total designations in its 2024–25 review, with 2,113 Russia-specific entries.

But designation counts tell only half the story. Enforcement intensity—the willingness and capacity to penalise violations—varies dramatically across the three regimes. OFAC’s enforcement penalties operate in a different order of magnitude. In 2023, OFAC collected a record $1.5 billion in penalties, anchored by the $968.6 million Binance settlement—the largest sanctions enforcement action in history. In 2025, OFAC levied over $265 million in penalties across 14 enforcement actions, with the $216 million GVA Capital case accounting for the majority.

EU enforcement remains primarily criminal rather than administrative, with member states handling prosecution individually. The Netherlands has emerged as the most aggressive enforcer: a Rotterdam court imposed 18 months’ imprisonment and a €200,000 fine for an export scheme of dual-use electronics to Russia in 2023; an Amsterdam court ordered €1 million in confiscation for sanctions evasion in 2024; and in July 2025, a Dutch court sentenced an individual to three years’ imprisonment for transferring ASML semiconductor know-how to Russian defence entities. Across all member states, the EU has levied approximately €490 million in sanctions-related fines since 2017, though this figure remains two orders of magnitude below OFAC’s enforcement output—a gap the 2024 Directive is explicitly designed to close.

Where Regimes Conflict

The divergences mapped above create specific compliance grey zones—areas where the three regimes produce contradictory or ambiguous obligations. Five deserve particular attention.

Grey Zone 1: Energy Sector Transactions

The split oil price cap ($60 US vs. $47.60 EU/UK) creates a compliance paradox for any entity involved in Russian petroleum trade. A transaction priced at $55 per barrel would be compliant under US rules but violate EU and UK sanctions. For multinational commodity traders, this means separate compliance workflows for US-nexus and EU/UK-nexus transactions—even when dealing with the same cargo. The EU’s introduction of new exemptions for Rosneft and Gazprom Neft transactions adds further complexity, requiring case-by-case assessment of whether specific crude oil trades fall within the carve-out.

Grey Zone 2: Secondary Sanctions and Third-Country Exposure

OFAC’s secondary sanctions create risk for non-US companies that EU and UK law does not replicate. A Dubai-based trading house with no US banking relationships could face OFAC designation for facilitating trade with a Russian counterparty, even where that trade is fully compliant with UAE, EU, and UK law. The practical implication: companies operating in major intermediary jurisdictions—the UAE, Turkey, Kazakhstan, and the Caucasus—must screen against OFAC requirements regardless of their own jurisdictional nexus.

Grey Zone 3: Humanitarian Exemptions

All three regimes provide humanitarian exemptions, but they differ in structure and scope. The EU operates a two-tier system: automatic exemptions for activities matching defined humanitarian categories, plus case-by-case derogations requiring member state authorisation. OFAC uses general licences that authorise specific categories of humanitarian activity but do not provide blanket exemption. The UK’s humanitarian exception includes time-limited provisions—the ISIL/Al-Qaida exception expires after two years. NGOs and international organisations operating across all three regimes must map their activities against three different exemption frameworks.

Alias Management and Entity Re-emergence

Sanctioned entities routinely re-emerge under different corporate names, altered ownership structures, or new jurisdictional registrations—a practice that exploits the gap between designation and detection. Russian-linked entities have been documented reconstituting in jurisdictions including the UAE, Turkey, and Central Asia within weeks of designation, using nominee shareholders and shell structures to obscure beneficial ownership. The three regimes differ in how aggressively they pursue alias identification: OFAC maintains the most extensive alias database and regularly adds “also known as” entries to SDN listings, while EU and UK databases are less comprehensive on alias coverage. For compliance teams, this means that name-based screening alone is insufficient—effective sanctions compliance requires entity-resolution technology that matches on beneficial ownership, directorship networks, and transactional patterns, not just corporate names.

A Practical Framework

The divergence across regimes does not make compliance impossible—it makes it architectural. Companies operating across US, EU, and UK jurisdictions need a structured approach that we characterise as Screen–Assess–Monitor.

Pillar 1: Screen

Map all jurisdictional touchpoints across the transaction lifecycle. This means identifying not only where the company is incorporated and regulated, but where its counterparties bank, where goods transit, where intellectual property is developed, and where beneficial ownership resides. Apply the most restrictive standard—typically OFAC—as the baseline screening filter. Any match requires escalation before jurisdictional carve-outs are considered.

Pillar 2: Assess

Classify exposure by regime and sector. Energy transactions require a dedicated workflow given the oil price cap divergence. Technology transfers demand product-level classification against all three export control regimes. Counterparty scoring must run against OFAC’s SDN list, the EU’s consolidated sanctions list, and the UK’s newly merged sanctions list. Document all screening decisions with audit trails—the EU’s new criminal liability provisions make compliance documentation a legal defence.

Pillar 3: Monitor

Implications for Global Businesses

The divergence between US, EU, and UK sanctions regimes is structural, not cyclical. It reflects different legal traditions (common law vs. civil law), different institutional architectures (OFAC’s centralised authority vs. the EU’s member-state enforcement), and different strategic calculations (US energy exporter vs. European energy importer). Companies should not expect convergence.

What they should expect is growing enforcement. The EU’s Directive 2024/1226 introduces mandatory minimum criminal penalties for sanctions violations—a significant departure from the previously administrative approach. UK OFSI has nearly tripled its active investigation caseload from 2021 to 2025. OFAC continues to levy penalties that represent existential financial risk for mid-sized companies.

The bottom line: multi-jurisdictional sanctions compliance is no longer a legal department function. It is an enterprise risk management discipline that requires dedicated screening architecture, real-time regulatory intelligence, and a cultural commitment to treating the most restrictive standard as the operating baseline.

This analysis draws on official designation data from OFAC, the EU Consilium sanctions database, and UK OFSI Annual Reviews. Enforcement data is sourced from OFAC enforcement records, EU member state court filings, and OFSI published actions. Regulatory comparison is based on primary legislation review. Oil price cap data from EU Council and UK Government announcements. Technology control analysis based on EU Dual-Use Regulation updates and UK export control amendments.