Executive summary
Economic sanctions can coerce, constrain, or signal—but their success depends on design, enforcement, and diplomacy. The newest waves of sanctions in 2024–2025—tightened measures on Russia (including EU packages and expanded U.S. secondary sanctions), renewed pressure on Iran after April 2024, the partial re-tightening on Venezuela’s oil sector in April 2024, and coordinated actions on Myanmar—show sanctions can raise costs, shrink access to finance and technology, and alter behavior on the margins. Yet they have not, by themselves, delivered sweeping policy reversals. A growing body of research finds sanctions reliably inflict economic pain but are more likely to achieve limited objectives when they are multilateral, precisely scoped, credibly reversible, and paired with active diplomacy and humanitarian safeguards. ([consilium.europa.eu](https://www.consilium.europa.eu/en/press/press-releases/2024/06/24/russia-s-war-of-aggression-against-ukraine-comprehensive-eu-s-14th-package-of-sanctions-cracks-down-on-circumvention-and-adopts-energy-measures/?utm_source=openai))
What, exactly, are sanctions—and how are they supposed to work?
Sanctions restrict economic activity (trade, finance, technology transfers, services) to influence a target’s behavior. Three mechanisms matter: coercion (raise the cost of noncompliance), constraint (deny resources or capabilities), and signaling (rally allies and markets). Modern “smart” programs mix targeted listings with sectoral and export controls—and increasingly rely on extraterritorial “secondary” measures to deter enablers. In 2024–2025, enforcement innovations—like expanding secondary-sanctions exposure for foreign financial institutions (FFIs) engaged with Russia’s military-industrial base—illustrate this shift from broad embargoes to granular, compliance-driven pressure. ([hoganlovells.com](https://www.hoganlovells.com/en/publications/significant-new-measures-against-russia-issued-by-us-departments-of-treasury-state-and-commerce?utm_source=openai))
What the latest rounds tell us
Russia: deeper packages, sharper enforcement
In June 2024 the EU adopted its 14th sanctions package, expanding energy, finance, and anti-circumvention measures (including restrictions on LNG transshipment and a “best efforts” duty for subsidiaries). In December 2024, a 15th package targeted the “shadow fleet” and additional enablers. These sit alongside a Price Cap Coalition that tightened maritime enforcement through 2024 with multiple OFAC actions against shippers and traders. The U.S. also broadened secondary-sanctions risk for FFIs dealing with virtually any EO 14024–designated Russian SDN and hit additional Russian banks and payment workarounds into 2025. The cumulative effect: rising frictions in cross‑border payments, higher logistics costs for oil exports, and a harder road for Russia to source high‑priority technology—though not an end to the war. ([consilium.europa.eu](https://www.consilium.europa.eu/en/press/press-releases/2024/06/24/russia-s-war-of-aggression-against-ukraine-comprehensive-eu-s-14th-package-of-sanctions-cracks-down-on-circumvention-and-adopts-energy-measures/?utm_source=openai))
Iran: punitive strikes after April 2024—and a long diplomatic shadow
Following Iran’s April 13, 2024 attack on Israel, the U.S. and EU tightened measures on UAVs, missiles, steel, and dual-use tech. Additional U.S. actions in 2024–2025 targeted procurement networks spanning Iran, the UAE, China, and Hong Kong. These steps raise costs and complicate supply chains but operate within a volatile diplomatic landscape marked by the fraying of the 2015 nuclear deal and talk of “snapback” options. Sanctions have shaped Iran’s incentives before—most notably during the run‑up to the JCPOA—yet durable change has historically required paired relief for verified steps and credible off‑ramps. ([home.treasury.gov](https://home.treasury.gov/news/press-releases/jy2270?utm_source=openai))
Venezuela: partial opening, then re‑tightening
After a six‑month window of oil-and‑gas relief in late 2023, Washington allowed General License 44 to expire on April 17, 2024, replacing it with GL 44A to wind down activities by May 31, 2024. Legal advisories and OFAC notices emphasized case‑by‑case specific licensing, keeping a narrow path open even as broader relief receded. The episode underscores sanctions’ “conditionality loop”: economic openings can incentivize negotiations, but relief is reversible if commitments falter. ([reuters.com](https://www.reuters.com/markets/commodities/venezuela-oil-sector-hit-by-loss-its-widest-us-license-2024-04-18/?utm_source=openai))
Myanmar: targeting the regime’s lifelines
Coordination tightened on aviation fuel and state revenue streams, including U.S. restrictions on financial services for the state‑owned MOGE (effective December 15, 2023) and allied actions in 2024. While such steps can constrain airstrike capacity and hard‑currency flows, their effectiveness hinges on limiting diversion through regional intermediaries and sustaining multilateral buy‑in. ([ofac.treasury.gov](https://ofac.treasury.gov/faqs/1138?utm_source=openai))
What the evidence says about “do they work?”
Recent empirical work finds sanctions reliably reduce growth, trade, and FDI in target economies—especially in the first two years—but policy concessions remain uneven and depend on goals and context. Studies and working papers point to stronger results for narrow, clearly defined aims (e.g., nonproliferation steps) than for regime change, and warn about humanitarian spillovers. Evidence from Russia shows substitution toward lower‑quality suppliers and mounting payment frictions as enforcement tightens. ([sciencedirect.com](https://www.sciencedirect.com/science/article/abs/pii/S0147596723000525?utm_source=openai))
Design choices that improve the odds
- Clarity of objectives and metrics: focus on specific behaviors with verifiable benchmarks and timelines.
- Multilateral scope and enforcement: EU, G7, and partner alignment plus coordinated export‑control updates and maritime enforcement increase bite and reduce leakage. ([consilium.europa.eu](https://www.consilium.europa.eu/en/press/press-releases/2024/06/24/russia-s-war-of-aggression-against-ukraine-comprehensive-eu-s-14th-package-of-sanctions-cracks-down-on-circumvention-and-adopts-energy-measures/?utm_source=openai))
- Credible, phased relief: offer calibrated off‑ramps tied to compliance (the JCPOA playbook on “Implementation Day” remains instructive, even after its unraveling). ([home.treasury.gov](https://home.treasury.gov/news/press-releases/jl0129?utm_source=openai))
- Secondary‑sanctions leverage—used judiciously: expanding FFI exposure can deter facilitation but risks financial fragmentation if overused. ([davispolk.com](https://www.davispolk.com/insights/client-update/russia-sanctions-update-us-expands-secondary-sanctions-regime-foreign?utm_source=openai))
- Humanitarian carve‑outs and monitoring: protect food, medicine, and civil society to minimize harm and maintain legitimacy. ([pmc.ncbi.nlm.nih.gov](https://pmc.ncbi.nlm.nih.gov/articles/PMC9975820/?utm_source=openai))
Unintended consequences to watch
Policymakers face risks of sanctions “blowback”: strengthened cooperation among sanctioned states, currency and payments workarounds, and longer‑term erosion of Western financial centrality if measures are perceived as capricious. Analysts caution that sanctions can backfire when aims are maximalist or timelines unrealistic. The literature and policy debates since 2022 highlight precisely these concerns. ([ethicsandinternationalaffairs.org](https://www.ethicsandinternationalaffairs.org/journal/backfire-how-sanctions-reshape-the-world-against-u-s-interests?utm_source=openai))
2024–2025 enforcement trends compliance teams can’t ignore
- Russia price-cap enforcement: continuing designations of shippers, managers, and vessels; UK/EU actions against the “shadow fleet.” ([home.treasury.gov](https://home.treasury.gov/news/press-releases/jy2085?utm_source=openai))
- Broadened FFI risk: OFAC’s June 2024 expansion ties exposure to any EO 14024‑blocked person; banks report cross‑border payment frictions as measures bite. ([hklaw.com](https://www.hklaw.com/en/insights/publications/2024/06/ofac-expands-secondary-sanctions-targeting-ffis-transacting?utm_source=openai))
- Software and IT service restrictions: new U.S. rules sweep in enterprise management and design/manufacturing software bound for Russia/Belarus. ([dlapiper.com](https://www.dlapiper.com/en-us/insights/publications/2024/06/new-russia-sanctions-restrict-certain-it-software-related-services?utm_source=openai))
- Iran procurement networks: serial actions against UAV/missile supply chains across multiple jurisdictions. ([home.treasury.gov](https://home.treasury.gov/news/press-releases/jy2270?utm_source=openai))
Policy bottom line
Sanctions can lead to change—but most reliably when they are part of a strategy that sets narrow goals, closes evasion channels, sequences pressure with credible relief, and pairs the economic squeeze with diplomacy. The 2024–2025 record shows how smarter enforcement (price caps, secondary‑sanctions guidance, LNG and shadow‑fleet measures) can raise costs and constrain capabilities. But coercion without realistic off‑ramps or humanitarian guardrails is more likely to entrench resistance, spur circumvention, and fragment financial plumbing than to deliver durable policy shifts. ([consilium.europa.eu](https://www.consilium.europa.eu/en/press/press-releases/2024/06/24/russia-s-war-of-aggression-against-ukraine-comprehensive-eu-s-14th-package-of-sanctions-cracks-down-on-circumvention-and-adopts-energy-measures/?utm_source=openai))
FAQ
Do comprehensive embargoes work better than targeted sanctions?
Comprehensive embargoes often inflict greater economic harm but carry higher humanitarian costs and political blowback. Targeted and sectoral measures, combined with export controls and tight enforcement, are likelier to be sustainable and legitimate—especially with humanitarian carve‑outs. ([pmc.ncbi.nlm.nih.gov](https://pmc.ncbi.nlm.nih.gov/articles/PMC9975820/?utm_source=openai))
What’s new about “secondary sanctions” risk?
Since late 2023 and especially after June 2024 guidance, foreign banks can face U.S. penalties for facilitating significant transactions involving almost any EO 14024‑blocked Russian party, not only defense‑sector SDNs. That raises due‑diligence stakes across correspondent banking and trade finance. ([hoganlovells.com](https://www.hoganlovells.com/en/publications/significant-new-measures-against-russia-issued-by-us-departments-of-treasury-state-and-commerce?utm_source=openai))
Can sanctions open doors to diplomacy?
Yes—when relief is credible and sequenced to verified steps. The JCPOA template linked specific nuclear limits to phased relief and snapback, offering a model for structuring concessions even though the deal later unraveled. ([home.treasury.gov](https://home.treasury.gov/news/press-releases/jl0129?utm_source=openai))
How should companies respond to rapid changes?
Map counterparties to SDNs and expanded sector rules, screen maritime risk (vessels, trades above price caps), monitor software/export‑control updates, and document “best efforts” in high‑risk corridors. ([finance.ec.europa.eu](https://finance.ec.europa.eu/news/eu-adopts-14th-package-sanctions-against-russia-its-continued-illegal-war-against-ukraine-2024-06-24_pl?utm_source=openai))
Interview: a compliance specialist consultant on what’s changed in 2024–2025
Q: What single shift most impacted your sanctions programs this year?
A: The broadened FFI exposure under Russia programs. It forced many clients outside the U.S. to reassess correspondent lines, add enhanced due diligence for Russia‑touching flows, and obtain attestations from customers on non‑engagement with SDNs. ([hklaw.com](https://www.hklaw.com/en/insights/publications/2024/06/ofac-expands-secondary-sanctions-targeting-ffis-transacting?utm_source=openai))
Q: Where are enforcement teams focusing next?
A: Maritime risk around oil price caps (ownership/flag/insurance opacity and ship‑to‑ship transfers), and procurement networks for Iran‑related UAV/missile components. Expect continued designations, data‑sharing, and analytics around deceptive shipping practices. ([home.treasury.gov](https://home.treasury.gov/news/press-releases/jy2085?utm_source=openai))
Q: One practical step organizations often overlook?
A: Governance around software/export controls. Many firms track goods well, but fewer monitor seemingly “low‑risk” enterprise or design software and related services that are now licensable or restricted for Russia/Belarus. ([dlapiper.com](https://www.dlapiper.com/en-us/insights/publications/2024/06/new-russia-sanctions-restrict-certain-it-software-related-services?utm_source=openai))
Related searches
- Do sanctions change state behavior?
- How do secondary sanctions affect foreign banks?
- EU 14th and 15th Russia sanctions package explained
- Oil price cap enforcement latest actions
- General License 44 vs. 44A Venezuela
- Humanitarian impact of targeted sanctions
- UAV and missile export controls on Iran
- Shadow fleet sanctions Europe UK
Notes and sources (selected)
- EU’s 14th package on Russia (June 24, 2024) and enforcement focus; EU’s 15th package (Dec 16, 2024). ([consilium.europa.eu](https://www.consilium.europa.eu/en/press/press-releases/2024/06/24/russia-s-war-of-aggression-against-ukraine-comprehensive-eu-s-14th-package-of-sanctions-cracks-down-on-circumvention-and-adopts-energy-measures/?utm_source=openai))
- U.S. price‑cap enforcement actions in 2024 and guidance updates. ([home.treasury.gov](https://home.treasury.gov/news/press-releases/jy2085?utm_source=openai))
- Expanded U.S. secondary‑sanctions exposure for FFIs dealing with EO 14024 SDNs (Dec 2023 EO 14114; June 2024 FAQs/guidance). ([hoganlovells.com](https://www.hoganlovells.com/en/publications/significant-new-measures-against-russia-issued-by-us-departments-of-treasury-state-and-commerce?utm_source=openai))
- Reuters on payment frictions and market impacts in Russia (June 2024). ([reuters.com](https://www.reuters.com/business/finance/russias-vtb-bank-says-us-sanctions-have-complicated-cross-border-transactions-2024-06-28/?utm_source=openai))
- Iran measures post‑April 2024 attacks; EU broadening to missiles; continued U.S. actions into 2025. ([home.treasury.gov](https://home.treasury.gov/news/press-releases/jy2270?utm_source=openai))
- Venezuela GL 44 expiration and GL 44A wind‑down (April–May 2024). ([ofac.treasury.gov](https://ofac.treasury.gov/recent-actions/20240417?utm_source=openai))
- Myanmar: MOGE financial‑services restrictions and allied actions. ([ofac.treasury.gov](https://ofac.treasury.gov/faqs/1138?utm_source=openai))
- Academic and policy research on efficacy and macro effects. ([sciencedirect.com](https://www.sciencedirect.com/science/article/abs/pii/S0147596723000525?utm_source=openai))
- Humanitarian impacts review. ([pmc.ncbi.nlm.nih.gov](https://pmc.ncbi.nlm.nih.gov/articles/PMC9975820/?utm_source=openai))
- Analytical critiques of overuse/backfire risks. ([foreignaffairs.com](https://www.foreignaffairs.com/reviews/backfire-how-sanctions-reshape-world-against-us-interests?utm_source=openai))
sanctions
