Author name: mayurjethwa@hotmail.com

Executive Summary This week was dominated by a significant escalation in US pressure against Iran and its overseas financial networks. The most consequential development for the UAE was FinCEN’s proposed action against Banque Misr UAE, following allegations that the bank processed approximately USD 1.8 billion for 103 companies potentially connected to Iranian shadow-banking networks. The action forms part of the newly launched Operation Economic Outcast, a sustained US campaign targeting Iran’s access to international banking, oil revenues, shipping, aviation, gold and dual-use technology. Separately, the United States delivered further sanctions relief for Syria, creating new opportunities while leaving important residual risks in place. 1. FinCEN Targets Banque Misr UAE What changed? On 28 August, FinCEN proposed a rule that would prevent US financial institutions from maintaining correspondent banking relationships with, or processing correspondent transactions for, Banque Misr UAE. The US Treasury alleges that between January 2024 and June 2026, the bank processed approximately USD 1.8 billion involving 103 companies potentially forming part of Iranian shadow-banking networks. According to Treasury, some customers appeared to be front companies connected to Iran’s Ministry of Defense, the IRGC and other Iranian state interests. The measure is currently a proposed rule, not yet a final correspondent-banking prohibition. US Treasury announcement Why it matters This is an unusually direct US action against a UAE-regulated financial institution. It demonstrates that: Operational impact UAE and GCC institutions should immediately identify: A restriction based only on Banque Misr UAE’s BIC may be insufficient. The greater risk is migration of the underlying network. 2. US Launches “Operation Economic Outcast” Against Iran What changed? On 24 August, the US Treasury announced a sustained, whole-of-government campaign intended to sever Iran’s international financial connections. OFAC targeted nearly 60 Iran-linked individuals, entities and vessels across: Treasury also highlighted Iran’s use of gold, aviation, shipping and covert financial channels. US Treasury announcement Why it matters This signals a shift from periodic designation packages toward a continuing campaign against Iran’s overseas facilitators. The explicit focus on third-country enablers increases secondary-sanctions and correspondent-banking risks for: Operational impact Institutions should not treat this as a routine list-update exercise. Relevant controls should examine: 3. Additional US Sanctions Relief for Syria What changed? The United States announced further relief on 24 August, including: US Treasury and State announcement Why it matters The changes may increase legitimate commercial and banking interest in Syria. However, relief does not remove every restriction or eliminate exposure to separately designated individuals, terrorist groups, proliferation networks and former-regime actors. Different sanctions frameworks may also move at different speeds. Operational impact Banks should avoid treating Syria as either completely prohibited or fully unrestricted. A controlled approach should include: 4. UK, EU and UN No similarly material new UK, EU or UN sanctions package was identified during the reporting period. However, institutions should continue implementing the EU’s July 2026 Russia package, particularly its measures concerning financial services, crypto activity, shadow-fleet vessels, refineries and LNG-tanker sales. EU 21st sanctions package Recommended Actions This Week Key Risk Outlook Overall risk direction: Increasing The principal emerging risk is not simply direct Iranian exposure. It is the possibility that affected customers and payment flows migrate from a publicly identified UAE institution into other local banks, exchange houses and trading companies. The immediate compliance priority should therefore be: Follow the underlying networknot only the named bank or sanctioned party. Comply Sphere Advisory provides specialist sanctions advisory support for organisations navigating complex sanctions decisions and cross-border risk.

Key Sanctions Developments The past week included an important U.S. Russia-related licensing development alongside further sanctions designations across Iran, counter-terrorism and counter-narcotics programmes. 🇺🇸 United States – Lukoil International Licensing On 20 August, OFAC issued Russia-related General License 131I relating to certain transactions connected with the potential sale of Lukoil International GmbH. The licence authorises certain transactions necessary for negotiating and entering into contingent contracts for a potential sale, alongside specified maintenance activities. OFAC also amended associated Russia-related FAQs. What this means for businesses:The development illustrates an important distinction between a sanctioned parent or wider group and transactions specifically authorised under a General Licence. Businesses considering activity connected with sanctioned groups need to understand precisely: A General Licence creates a defined authorisation — not a general removal of sanctions risk. 🇺🇸 United States – Further Designation Activity OFAC’s 20 August action also included designations across Iran, counter-terrorism, counter-narcotics and Cuba-related programmes. For screening teams, multiple programme updates on the same day reinforce the operational importance of timely list ingestion and effective change-management processes. 🇬🇧 United Kingdom – General Licence Administration OFSI continued updating its General Licence collection during August, including administrative changes published on 19 August. Although such changes may appear less significant than new designations, firms relying on sanctions licences should maintain processes to identify amendments, expiry dates and changes to conditions. Compliance Focus of the Week Licensing Does Not Mean Low Risk Sanctions licences are designed to authorise defined activities that would otherwise be restricted. They do not necessarily make the underlying relationship low risk. Before relying on a licence, organisations should understand: This becomes particularly important in complex corporate groups where some entities may be sanctioned while other activity is subject to specific authorisation. Key Takeaway Sanctions compliance is rarely a simple permitted/prohibited decision. Licensing, ownership and control, secondary sanctions, contractual arrangements and the wider transaction context can materially change the analysis. The strongest sanctions frameworks provide a structured process for identifying these factors and documenting why a particular decision was reached. Comply Sphere Advisory provides specialist sanctions advisory support for organisations navigating complex sanctions decisions and cross-border risk.

Key Sanctions Developments This week was comparatively quieter for major new sanctions designations, but an important U.S. enforcement action provided a useful reminder that sanctions risk can arise from ordinary commercial transactions. 🇺🇸 United States – OFAC Enforcement Action On 12 August, OFAC announced a settlement with Rice Lake Weighing Systems, Inc. for $60,764 relating to apparent sanctions violations. The case demonstrates an important principle: sanctions compliance is not relevant only to banks and financial institutions. Manufacturers, exporters, technology companies and other corporates engaged in international business can also face sanctions exposure through their customers, distributors, destinations and transaction chains. What this means for businesses:Sanctions controls should reflect the organisation’s actual business model. For internationally active companies, this may require consideration of: 🇬🇧 United Kingdom – General Licence Updates OFSI amended existing General Licences during the week. General Licences can permit activities that would otherwise be prohibited, but their conditions and scope need to be understood carefully. What this means for businesses:A General Licence should never be treated simply as confirmation that a transaction is permitted. Organisations relying on a licence should determine: Compliance Focus of the Week Sanctions Risk Is Not Just a Banking Issue One of the recurring misconceptions around sanctions is that sophisticated controls are primarily a requirement for financial institutions. In reality, sanctions exposure can arise across: The appropriate controls will differ by sector, but the underlying principle remains the same: organisations need to understand where sanctions risk enters their business. Key Takeaway A sanctions framework should be proportionate to the organisation’s actual exposure rather than copied from another business or industry. Understanding customers, counterparties, jurisdictions, products and transaction flows provides the foundation for designing effective sanctions controls. Comply Sphere Advisory supports businesses with practical, risk-based sanctions frameworks and independent sanctions risk assessments.

Key Sanctions Developments The past week brought further sanctions activity across Iran, Cuba and Russia, reinforcing the need for organisations to maintain effective sanctions-list and regulatory-change controls. 🇺🇸 United States – New Iran-Related Designations On 7 August, OFAC announced further Iran and counter-terrorism-related designations and amended Iran-related guidance. The action included additions to the SDN List, with certain designated individuals identified as subject to secondary sanctions. What this means for businesses:Non-U.S. businesses should not assume that U.S. sanctions are irrelevant simply because a transaction has no obvious U.S. connection. Where secondary sanctions authorities apply, dealings involving designated parties or restricted activities may create exposure for non-U.S. persons and financial institutions. 🇺🇸 United States – Cuba Measures OFAC also announced Cuba-related designations on 6 August and issued related guidance. The measures illustrate the continued use of sanctions against networks supporting sanctioned governments and restricted activities. What this means for businesses:Organisations should ensure sanctions-list updates are incorporated promptly into screening systems and that changes affecting existing customers and counterparties trigger appropriate review. 🇪🇺 European Union – Russian Military-Industrial Complex On 7 August, the EU imposed sanctions on five additional individuals supporting Russia’s military-industrial complex. The individuals hold senior positions in Russian companies operating in defence and military technology, including missile and drone production. What this means for businesses:Exporters and companies dealing in technology, electronics, industrial components and potentially dual-use goods should continue to consider the ultimate end user and end use of their products. The absence of a designated name at the immediate customer level may not resolve the wider sanctions or circumvention risk. 🇬🇧 United Kingdom – Russia Sanctions Lists The UK’s Russia sanctions designation and notices guidance was updated during the week, reinforcing the importance of ensuring screening processes are aligned with the current UK Sanctions List. Compliance Focus of the Week Secondary Sanctions Risk Secondary sanctions can create exposure for businesses outside the jurisdiction imposing the measures. A transaction may therefore require consideration of: This is particularly relevant for businesses operating across complex international trade corridors. Key Takeaway The week’s developments highlight the importance of combining screening with contextual risk assessment. Sanctions exposure increasingly requires organisations to understand not only who they are dealing with, but also the underlying activity, ownership structure and ultimate purpose of the transaction. Comply Sphere Advisory provides specialist sanctions advisory support to organisations assessing complex cross-border sanctions exposure.

Key Sanctions Developments The sanctions landscape remained active at the end of July and beginning of August, with developments affecting Iran, Russia, Venezuela and broader counter-terrorism measures. 🇺🇸 United States – Iran and Counter-Terrorism Measures OFAC continued its focus on Iran-linked networks at the end of July, alongside counter-terrorism and non-proliferation measures. Recent actions included Iran-related designations and measures targeting networks involved in weapons procurement and sanctions-sensitive activity. The continuing focus demonstrates that sanctions exposure can extend beyond directly designated Iranian entities to intermediaries, trading companies, financial facilitators and other parties supporting restricted activity. What this means for businesses:Organisations with Middle East and international trade exposure should continue to consider indirect Iran nexus, including ownership structures, intermediaries, payment chains and the underlying commercial purpose of transactions. 🇪🇺 European Union – Russia Sanctions Continue to Expand The EU’s 21st sanctions package, adopted in late July, introduced significant measures affecting Russia’s energy, financial and maritime sectors. Measures included additional individual and entity designations, restrictions involving Russian financial institutions, additional shadow-fleet vessels, crypto-related platforms and tighter export controls. The package also introduced measures relevant to LNG tanker sales and non-EU financial institutions. What this means for businesses:For companies operating across the UAE, GCC and international trade corridors, Russia-related risk increasingly requires assessment beyond the immediate counterparty. Banks, vessels, ownership structures, trade routes and third-country intermediaries may all be relevant. 🇺🇸 United States – Venezuela Licensing Changes OFAC issued an amended Venezuela-related General Licence on 3 August, continuing the evolving approach to permitted and restricted activity involving Venezuela. What this means for businesses:General licences should not be interpreted as broad sanctions relief. Businesses should establish whether the specific parties, activities, dates and conditions of a licence apply before proceeding with a transaction. Compliance Focus of the Week Look Beyond the Immediate Counterparty A customer or supplier being non-sanctioned does not necessarily mean that the wider transaction presents no sanctions risk. Consider: Increasingly complex sanctions regimes make understanding the full transaction chain an important part of sanctions risk management. Key Takeaway Sanctions compliance is moving further beyond simple list screening. Organisations operating internationally should consider how sanctions exposure can arise through ownership, intermediaries, financial institutions, shipping, trade routes and the ultimate purpose of a transaction. Comply Sphere Advisory provides specialist sanctions advisory support to businesses navigating complex sanctions risk.