The U.S. announced March 31 an expansion of trade and economic sanctions against Russia for its “unprovoked and unjustified war against Ukraine.” Deputy Treasury Secretary Wally Adeyemo explained that while the sanctions and export controls imposed by the U.S. and others have inflicted “significant and immediate damage” on Russia’s economy, these countries will increasingly focus their efforts on going after industries that are critical to Russia’s ability to project power and disrupting its “critical supply chains.”
For more information on restrictions on trade with Russia, please contact Kristine Pirnia at (202) 730-4964 or via email. Click here to register for ST&R’s April 5 webinar on this issue.
The Treasury Department’s Office of Foreign Assets Control said it is targeting operators in Russia’s technology sector that are working to evade multilateral sanctions against Russia and illicitly procure dual-use equipment and technology critical for Russia’s defense sector. Specifically, OFAC is designating 21 entities and 13 individuals, including several in the United Kingdom, Spain, and Malta.
Treasury has also determined that three additional sectors of the Russian economy – aerospace, marine, and electronics – are subject to sanctions pursuant to Executive Order 14024. This allows Treasury to impose sanctions on any individual or entity determined to operate or have operated in any of these sectors and provides “an expanded ability to swiftly impose additional economic costs on Russia” for its attack on Ukraine. Russia’s financial services, technology, and defense and related materiel sectors are already subject to EO 14024.
As a result of these actions, all property and interests in property of the designated entities and individuals 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, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked.
Unless authorized by a general or specific license issued by OFAC, or exempt, OFACʼs 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 persons. In addition, financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities and individuals may expose themselves to sanctions or be subject to an enforcement action. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person or the receipt of any contribution or provision of funds, goods, or services from any such person.
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