Russia sanctions - a fracturing coalition

For three years, the Western response to Russia's invasion of Ukraine moved in something close to lockstep: the US, the EU and the UK adding sanctions in near-simultaneous waves, each treating divergence as a risk best avoided.

That unity is now over. Washington has spent the past year easing pressure and dangling relief as a bargaining chip, while Brussels and London have done the opposite, tightening measures and enforcement with a severity that now outpaces anything seen since 2022. For compliance professionals, the war's trajectory matters less over the next 12 months than this widening transatlantic gap.

A coalition pulling apart

The shift in Washington has been the most striking. Having entered office promising a negotiated end to the war, the Trump administration largely held off on new Russia designations through 2025, preferring diplomacy to escalation. That approach hit its limits in October 2025, when Russia's continued refusal to end the conflict prompted the US Treasury's Office of Foreign Assets Control to sanction Rosneft and Lukoil, the two oil majors that anchor Russia's export economy. Yet by March 2026, with crude prices climbing, Washington had already granted partial relief, temporarily unwinding restrictions on Russian oil stranded at sea. Sanctions, in other words, are being used as a lever to be pulled and released according to the state of negotiations, not applied as a fixed, cumulative wall.

The EU has taken the opposite path. Its 21st sanctions package, adopted on 23 July 2026, was the largest in four years: 218 new listings, asset freezes on 94 banks, transaction bans on a further 33 credit institutions as well as action against 14 crypto platforms in Georgia, Panama, the UAE, the Marshall Islands, Kyrgyzstan and Belarus that were being used to move sanctioned funds. The oil price cap mechanism was suspended until July 2027 in favour of harder measures while 41 more vessels were added to the sanctioned shadow fleet, taking the total past 673.

The UK, meanwhile, is not just adding names to lists; it is changing how it enforces them. The Office of Financial Sanctions Implementation's reformed settlement scheme, introduced in February 2026, now runs alongside two strict liability penalties issued this year against a bank and a technology company. These were both for processing payments to designated entities despite, in the regulator's own words, 'no evidence of intent, knowledge or actual suspicion'. It has also begun asserting jurisdiction over non-UK entities that simply use UK payment infrastructure. Intent is no longer a defence, and neither, increasingly, is geography.

An economy under strain, not collapse

Russia's economy has not folded, but the resilience narrative of 2023 and 2024 is fraying. Moscow has cut its own 2026 growth forecast to just 0.4%, down from 1.3%, citing a lower oil price assumption of $59 a barrel. Inflation remains elevated at around 5.2%, and real income growth is projected to slow to 1.6%, from 7.7% the previous year. Poland's Centre for Eastern Studies has warned that Russia is heading towards recession, driven by heavy wartime spending, a strong rouble suppressing export revenue, and a refining sector that Ukrainian strikes have cut by up to 30%.

The war itself continues. As of September 2026, there is no ceasefire; Russia holds around a fifth of Ukrainian territory, and its rate of advance has slowed sharply over recent months. A renewed US diplomatic push led by Steve Witkoff and Jared Kushner failed to produce a deal, though Moscow has since signalled it remains open to further talks. Peace, however, has genuine public appetite behind it: recent polling puts support for a negotiated settlement at 59% among Russians and 69% among Ukrainians.

Looking ahead

For Russia, the next 12 months look like continued grinding pressure rather than collapse or victory. A shrinking growth path, a widening budget gap and an economy increasingly dependent on evasion networks that the EU and UK are now targeting directly. Expect further shadow fleet and crypto designations regardless of what Washington does and expect Moscow to keep testing whether a negotiated deal can buy sanctions relief faster than the battlefield can.

For compliance professionals, the practical challenge is no longer simply keeping pace with new listings; it is reconciling three regimes moving at different speeds and, at times, in different directions. A transaction cleared under a US licence may still create UK or EU exposure. Firms operating across all three jurisdictions should assume the strictest standard applies by default, revisit third-country intermediary relationships for shadow fleet and crypto exposure and treat 'we didn't know' as no longer a viable defence anywhere. The coalition may have splintered, but the compliance burden has not lightened. It has simply become harder to track.