Last Week's Major Developments in Sanctions - August 10 to August 14, 2026

Monday, August 10

• The DOJ announced that a Chinese national pleaded guilty to violating the Arms Export Control Act after attempting to procure U.S.-origin military-grade satellite modems and radios for shipment to China without the required State Department license. Chen and co-conspirators explored transshipment routes through Switzerland, Saipan, and Mexico and used cryptocurrency, including approximately $30,000 in USDT, to facilitate the purchase. District Judge David Sam accepted the individual's guilty plea and had scheduled sentencing for October 19, with maximum penalty of 20 years in prison. (Here)

• FinCEN convened law enforcement and financial institutions for an information-sharing engagement to combat cartels. The event was led by Gene Lange, who is performing the duties of the Under Secretary for Terrorism and Financial Intelligence, and Jimmy Kirby, FinCEN’s Deputy Director. Participants discussed case studies, typologies, and suspicious activity related to cartels. The August 10 event was the third in the “Combating and Obstructing Money Movements Associated with Narcotics and Drug Trafficking Organizations” (COMMAND) FinCEN Exchange series. The series supports Executive Order 14157, which designates cartels and other organizations as foreign terrorist organizations and specially designated global terrorists. (Here)

Tuesday, August 11

• FinCEN issued a final rule that permanently adopts the beneficial ownership information reporting framework established under the interim final rule of March 2025, thereby confirming on a permanent basis that domestic reporting companies and United States persons remain exempt from beneficial ownership reporting obligations under the Corporate Transparency Act, while foreign reporting companies continue to be required to report beneficial ownership information solely with respect to their non-United States beneficial owners. The final rule further expands upon the interim rule by extending the exemption previously applicable only to United States person beneficial owners to now also encompass United States person company applicants, who had remained subject to reporting obligations under the interim final rule, and by eliminating the requirement for United States persons holding a FinCEN identifier to update or correct previously submitted identifying information. In addition, FinCEN confirmed that it intends to conduct a single, one-time deletion of beneficial ownership information previously reported by United States persons to identify and remove records associated with identifying documents reasonably believed to have been issued by a United States authority, such as a passport or driver's license; however, this deletion process will not extend to any beneficial ownership information submitted after the expiration of the 180-day period following publication of the rule, and FinCEN has indicated that it will not provide confirmation of deletion to individual filers upon request. (Here)

Wednesday, August 12

• OFSI amended the Lukoil International General Licence (INT/2025/8031092) and the Lukoil Bulgaria General Licence (INT/2025/7895596). Both General Licences include a notification requirement for any Entity using the amended licences. Some key notification requirements specified under the amended GLs include: 1. Entities relying on the amended General Licences must notify OFSI when they first use the licence and provide their current contact details. 2. Entities that begin using the licences on or after 12 August 2026 must notify OFSI within 14 days of first use. 3. Entities already relying on the licence when the requirement takes effect must notify OFSI within 14 days of 12 August 2026. This is a one-off notification requirement unless contact details change. Additionally, the Lukoil International General Licence (INT/2025/8031092) has been extended until 26 February 2027 and the Lukoil Bulgaria General Licence (INT/2025/7895596) has been extended until 29 October 2026. (Here)

• OFAC settled with Rice Lake Weighing Systems, a Wisconsin-based scale manufacturer, to pay $60,764 for potential civil liability for eight apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR). The violations arose from Rice Lake's Italian subsidiary, Dini Argeo S.r.l., which continued indirect sales of weighing equipment to Iran via a UAE-based distributor between June 2019 and November 2021, after General License H authorizing such sales had been revoked in 2018, with total transaction value of approximately $121,527. OFAC deemed the case non-egregious and voluntarily self-disclosed, applying a base penalty of one-half the aggregate transaction value. Key takeaways: 1. Foreign subsidiaries owned or controlled by U.S. persons are subject to ITSR obligations nearly identical to their U.S. parent, and compliance failures at the subsidiary level create direct liability for the U.S. parent. 2. Aggravating factors included reckless disregard for sanctions requirements (Dini should have known indirect sales were prohibited) and Rice Lake's failure to adequately explain or translate compliance guidance sent to non-U.S. personnel. 3. Red flags indicating diversion were present but missed, including repeated inquiries from the sanctioned Iranian counterparty and Iran-referencing email signatures. 4. Mitigating factors included prompt self-initiated investigation upon receiving a tip, voluntary self-disclosure, tolling of the statute of limitations, and post-discovery compliance program enhancements (employee training, distributor vetting, reexport warnings on invoices). 5. OFAC flagged the UAE as a known high-risk jurisdiction for diversion, reinforcing the need for heightened due diligence on indirect sales channels through such intermediary markets. (Here, a note from our founder's on this enforcement action)

Thursday, August 13

• OFSI launched a new GOV.UK online form for organizations wishing to invite OFSI to speak at, attend, or participate in events. OFSI announced that the form provides a single route for submitting invitations and helps ensure requests are directed to the appropriate team with the information needed for consideration. (Here)

• FinCEN issued a Financial Trend Analysis on 67,540 BSA reports filed between 2023–2025 involving more than $4.9 billion in suspected human smuggling-related activity. While filings declined 62% in 2025, FinCEN identified recurring financial typologies in migration routes across U.S.–Latin America. Key takeaways from the Analysis: 1. MSBs filed 97% of reports, while depository institutions filed only 3% but accounted for 61% ($3 billion) of reported suspicious activity. 2. Key red flags include unverifiable relationships between senders and beneficiaries, unusual transaction patterns, funds sent to migration routes/high-risk jurisdictions, and structuring. 3. Banks identified funnel accounts, frequent P2P payments, excessive cash deposits/withdrawals, and transactions inconsistent with customers’ stated occupations or profiles. 4. Travel agencies can serve as unwitting or intentional facilitators, with suspicious activity including large cash deposits, bulk airline-ticket purchases, charter flights, and visa-related payments. 5. The analysis also highlights emerging activity along the U.S.–Canada border, including P2P transfers, cash/foreign currency exchanges, and geographic activity inconsistent with customer profiles. (Here)

Friday, August 14

• BIS has charged Plexon, Inc. with eight violations of the Export Administration Regulations for exporting neural recording systems and accessories, valued at approximately $178,721, to China’s Academy of Military Medical Sciences (AMMS) without the required BIS authorization. AMMS had been on the BIS Entity List since December 2021 due to its alleged support for Chinese military end uses, including purported brain-control weaponry. The case underscores the importance of end-user screening and export license controls, particularly for emerging technologies with potential military applications. BIS is seeking administrative sanctions, including potentially significant civil penalties and denial of export privileges. (Here)