Background

The Treasury Department’s Office of Foreign Assets Control announced April 15 new sanctions against Russia under an executive order issued by President Biden the same day.

According to an OFAC press release, the EO authorizes sanctions to counter Russia’s harmful foreign activities that threaten U.S. national security and foreign policy, including (1) undermining the conduct of free and fair elections and democratic institutions in the U.S. and its allies and partners, (2) engaging in and facilitating malicious cyber activities against the U.S. and its allies and partners that threaten the free flow of information, (3) fostering and using transnational corruption to influence foreign governments, (4) undermining security in countries and regions important to U.S. national security, and (5) violating well-established principles of international law, including respect for the territorial integrity of states. To address these threats, the EO authorizes sanctions on a wide range of persons, including those operating in the technology and defense and related materiel sectors of the Russian economy or any additional sectors as determined by Treasury.

OFAC’s first use of this authority targets six private and state-owned companies operating in Russia’s technology sector that provide expertise to, develop tools and infrastructure for, and facilitate the malicious cyber activities of Russia’s intelligence services (the Federal Security Service, the Main Intelligence Directorate, and the Foreign Intelligence Service). Specifically, all property and interests in property of these entities that are in the U.S. or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more of the blocked entities are also blocked.  

Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the U.S. that involve any property or interests in property of designated or otherwise blocked entities. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked entity or the receipt of any contribution or provision of funds, goods, or services from any such entity.  

For more information, please contact attorney Kristine Pirnia via email.

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