The war precipitated by Russia's February 2022 invasion of Ukraine has continued into recent months at great human and economic cost. The conflict has also continued to affect broader diplomatic and security relationships, with recent moves by the administration of United States (US) President Donald Trump proving especially disruptive to the outgoing Biden administration's alignment with European states to counter Russia's aggression. In particular, indications that the US may relax existing sanctions on Russia suggest a potential divergence from the approach of the European Union (EU) with politically and commercially significant implications.
Between the lines
The second administration of President Trump has marked a departure from preceding US Ukraine policy which, in addition to posing profound ramifications for European security, has implied potential shifts in the international compliance landscape.
Starkly demonstrated in the 28 February 2025 White House confrontation between President Trump, Vice President JD Vance and Ukrainian President Volodymyr Zelenskyy, and by the temporary halt of US military aid and intelligence to Ukraine, the present US posture has triggered a historic rift in the broader Western alliance and elicited further security pledges from European leaders seeking to shore up regional resilience to threats from Russia. While President Trump's attempts to broker peace have produced some limited progress towards a permanent ceasefire, conflicting messages and official consultations on US sanctions relief for Russian entities and individuals suggest a new source of complexity in the sanctions landscape which has developed since Russia's invasion of Ukraine.
The European Union (EU) has issued additional rounds of sanctions into 2025, with the most recent package featuring strengthened enforcement and anti-circumvention measures applicable to EU persons and companies. Where US sanctions might be lifted, it can be expected that penalties imposed on Russia by Ukraine and by the EU will be maintained for the longer term. However, the Trump administration's negotiations with Russia, and the ambiguities of its current stance on the future of US sanctions, have already highlighted EU splinter points. The requirement for unanimity among member states for the biennial renewal of EU sanctions, recent threats by Hungary to veto these renewals and advocacy by Slovakia for imports of Russian gas imply potentially significant obstacles to the maintenance of a unified European position. US Secretary of State Marco Rubio moreover signalled, in statements to the press on 10 March, that European sanctions relief would be material to any ultimate settlement of the conflict.
These developments suggest new challenges and opportunities. Although many companies will likely balk at the prospect of re-engaging with Russia on reputational or ethical grounds, those wishing to do so might seek to navigate any regulatory or jurisdictional arbitrage emerging between US and EU sanctions regimes in the near term – especially where enforcement may be inadequate. For most organisations seeking to minimise compliance risks, variance between US and EU frameworks may heighten the need for regulatory agility and adaptability already entailed by the progressive rollout of Western sanctions since February 2022 – and may enable a competitive edge in fragmenting markets.