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Additional Sanctions on Russia Target Chinese Military Entity

Monday, September 24, 2018
Sandler, Travis & Rosenberg Trade Report

President Trump issued an executive order Sept. 20 authorizing the implementation of certain sanctions set forth in the Countering America’s Adversaries Through Sanctions Act to further the implementation of sanctions with respect to Russia.

First, the State Department has added 33 additional entities or individuals to the CAATSA section 231 list of specific persons for being a part of, or operating for or on behalf of, the defense or intelligence sectors of the Russian government. This action increases the number of persons identified on the LSP to 72. Any person who knowingly engages in a significant transaction with any of these persons is subject to mandatory sanctions under CAATSA section 231.

Second, in consultation with the Treasury Department the State Dept. has imposed sanctions on the Chinese entity Equipment Development Department and its director for engaging in significant transactions with persons on the LSP. These transactions involved Russia’s transfer to China of Su-35 combat aircraft and S-400 surface-to-air missile system-related equipment.

The State Dept. indicates in a Sept. 20 fact sheet that these actions are not intended to undermine the military capabilities or combat readiness of any country, but rather to impose costs on Russia in response to its interference in the U.S. election process, its unacceptable behavior in eastern Ukraine, and other malign activities. However, China has already sharply criticized this action and said the U.S. must “bear responsibility for the consequences” if the sanctions are not withdrawn.

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