x

Ukraine Crisis – US Sanctions Update – ARCHIVE

Mayer Brown
13/05/2022

ARCHIVE:

UPDATE:

May 11, 2022

  • Rand Paul Slows Down Ukraine Aid Package:On Thursday, Senator Rand Paul (R-KY) announced his intent to amend the $40 billion Ukraine assistance package passed by the House to include oversight by the Special Inspector General for Afghanistan Reconstruction to ensure US funds were being properly spent in Ukraine. With his objection, the package is not eligible for procedural provisions that allow the bill to be passed quickly with unanimous consent. Debate on the provision could take days. (https://www.wsj.com/articles/rand-paul-blocks-quick-passage-of-ukraine-aid-bill-11652386167?mod=livecoverage_web).

  • Commerce Secretary Says Russia Repurposing Semiconductors from Home Appliances due to Sanctions: During Congressional hearings this week, Secretary of Commerce Gina Raimondo told legislators that the Department of Commerce has “reports from Ukrainians that when they find Russian military equipment on the ground, it’s filled with semiconductors that they took out of dishwashers and refrigerators.” The statements shows the impact sanctions are having on the Russian military. (https://www.washingtonpost.com/technology/2022/05/11/russia-sanctions-effect-military/).

  •  Treasury Undersecretary Touts Economic Assistance to Ukraine at EBRD: Speaking at the European Bank for Reconstruction and Development (“EBRD”) on Thursday, Andy Baukol Performing the Duties of Under Secretary for International Affairs at the U.S. Department of the Treasury, discussed US economic assistance to Ukraine, saying the most recent assistance package provides “$8.5 billion from our Congress to provide further economic assistance to Ukraine, including $7.5 billion in direct budget support and $500 million to support EBRD interventions to counteract economic vulnerabilities caused by the war.” He praised the EBRD’s work and noted the need for reconstruction and development assistance in Ukraine. (https://home.treasury.gov/news/press-releases/jy0777).

UPDATE:

May 11, 2022

  • Treasury Issues New FAQs on Recent Services Ban: On Wednesday, the Department of the Treasury’s Office of Foreign Asset Control released three new Frequently Asked Questions related to the new ban on provisions of various services to Russia:

    o   FAQ 1034: Provides more precise definitions of the terms “accounting services,” “trust and corporate formation services,” and “management consulting services” for the purposes of the May 8 determination pursuant to Executive Order 14071. (https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1034).

    o   FAQ 1035: Provides more precise definitions of the terms “credit rating services” and “auditing services” for the purposes of Russia-related General License 35. (https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1035).

    o   FAQ 1038: Provides more precise definitions of the terms “accounting sector,” “trust and corporate formation services sector,” and “management consulting sector” for the purposes of the May 8 determination pursuant to Executive Order 14017. (https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1038).

UPDATE:

May 10, 2022

  • Treasury Assessing Options With Respect to General License Allowing US Banks to Process Russian Debt Payments: During a hearing before the Senate Banking, Housing, and Urban Affairs Committee on the Financial stability Oversight Council, Treasury Secretary Janet Yellen said that the Treasury Department had not yet made a decision on whether to renew a general license that permits US financial institutions to process Russian sovereign debt payments. She said that the Department wants to “make sure that we understand what the potential consequences and spillovers would be allowing the license to expire” and confirmed that the Department would publicly announce its intention to let the license expire. The relevant license is set to expire on May 25. (https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-05-10/card/treasury-weighing-whether-to-let-kremlin-payment-exemption-expire-yellen-says-StupqCiAL0CZU22RmC9Z).

  • Senator Calls for Sanctions on Additional Russian Banks: In a letter to the Secretary of the Treasury on Tuesday, Senator Steve Daines (R-MT) urged the Department of the Treasury to tighten sanctions on Bank Rossiya, given its connections to President Putin and its continued activities through affiliated companies, despite previous sanctions. He called on the Department to sanction Telcrest Investments and ABR Investments for this reason. In addition, he urged the Secretary to put Rosneft, Gazprom and Gazprombank on the Specially Designated Nationals And Blocked Persons List. (https://www.ft.com/content/6f061fd6-0eb4-44c2-ba27-2bd14f1cb2ae).

  • Commerce Department Official Says Export Controls are Harming Russian Industries:Speaking to The Wall Street Journal’s Risk and Compliance Forum on Tuesday, Assistant Secretary of Commerce for Export Enforcement Matthew Axelrod said that export controls on US goods to Russia are harming Russia’s warfighting capabilities. Mr. Axelrod said that difficulties in sourcing parts in the Russian defense and aerospace sectors will compound over time, especially as allies coordinate their export control regimes. He added that the Department had seen limited evidence that countries like China and India are helping Russia replace these lost exports. (https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-05-10/card/u-s-says-export-controls-are-hurting-russia-s-battlefield-might-gg2nFxV47SvlOJOiXtcd).  

  • Treasury Secretary Says Russia is in a Recession: During the same Senate Banking Committee hearing, Treasury Secretary Janet Yellen estimated that the Russian economy will contract by 10 to 15 percent, adding “their economy is clearly in recession” as a result of sanctions. Expanding on the sanctions point, she stated, “Russian firms that have been sanctioned are finding it almost impossible to gain access to goods and services that they need in global markets.” She did note that the conflict has increased global economic uncertainty. (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-05-10-22/h_6bbe5de888241ff990ff79fe8cad80fa).

  • US Ambassador to Ukraine Nominee Confirms US is Assisting Ukraine in Agricultural Exports:During her confirmation hearing before the Senate Foreign Relations Committee on Tuesday, the nominee to be US Ambassador to Ukraine Bridget Brink confirmed that the US is working with international partners to help Ukraine export its agricultural products. She noted that Russia’s blockade of the Sea of Azov and the Black Sea is making the effort “an enormous challenge.” (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-05-10-22/h_fddb46da87dcd7085dc7e57fa7428d5f).

UPDATE:

May 09, 2022

  • Additional Export Controls Announced on Industrial Goods Exported to Russia: As previewed in yesterday’s G7 statement, the Department of Commerce released a new rule imposing export controls on industrial equipment to Russia. The rule adds various Harmonized Tariff Schedule numbers to supplement no. 4 of Part 746 of the Export Administration Regulations, which adds a license requirement to export any of these goods to Russia. (https://public-inspection.federalregister.gov/2022-10099.pdf).

  • Senate Proposes $40 Billion Ukraine Assistance Package: Senate Democrats are working on a $40 billion legislative proposal for Ukraine aid, above the $33 billion that the White House asked for in the last few weeks. The Senate proposal includes an additional $3.4 billion for both security and humanitarian assistance, and is separate from a coronavirus relief package. Votes are expected on the proposal as soon as Tuesday. (https://thehill.com/news/senate/3482160-in-shift-democrats-de-link-ukraine-aid-from-covid-19-money/).

  • Deputy Treasury Secretary States Sanctions Will Focus on Russian “Military-Industrial Complex”: Speaking to Bloomberg TV on Monday, Deputy Treasury Secretary Wally Adeyemo said that sanctions packages on Russia are intended to target the Russian “military industrial complex” so that Russian weapons cannot be used in Ukraine. He added that the sanctions are intended to stop the war in Ukraine and hinder Russia’s ability to “project power into the future and continue to destabilize the region and the world.” (https://www.bloomberg.com/news/videos/2022-05-09/treasury-s-adeyemo-on-russia-sanctions-china-trade-video).

UPDATE:

May 08, 2022

  • OFAC Issues New Restrictions in Line with G7 Commitments: On Sunday, the Treasury Department’s Office of Foreign Asset Control (“OFAC”) released new restrictions in line with the statement issued on Sunday by G7 leaders announcing future commitments to hold Russia accountable for its invasion of Ukraine: (https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/08/g7-leaders-statement-2/)

    o   New Restrictions on Accounting and Management Consulting Services: In line with the promise to “take measures to prohibit or otherwise prevent the provision of key services on which Russia depends,” OFAC issued a determination under Executive Order 14071 prohibiting the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of accounting, trust and corporate formation, and management consulting services to any person located in the Russian Federation beginning on June 7, 2022; and identifying the accounting, trust and corporate formation services, and management consulting sectors of the Russian Federation economy pursuant to section 1(a)(i) of Executive Order 14024, allowing OFAC to impose sanctions on any individual or entity determined to be operating in such a sector. (https://home.treasury.gov/news/press-releases/jy0771).

    §  OFAC issued certain guidance and new general licenses related to these services, including: General License 34, authorizing a wind-down period for these services through 12:01 am ET on June 7, 2022, and General License 35, authorizing a wind-down period for credit rating and auditing services through 12:01 am ET on August 20, 2022.

    o   New Sanctions on the Russian Banking Sector: In line with the promise to “continue to take action against Russian banks connected to the global economy,” OFAC  designated Joint Stock Company Moscow Industrial Bank and 10 of its subsidiaries as specially designated nationals (“SDNs”).

    o   New Sanctions on the Russian Media Sector: In line with the promise to “continue our efforts to fight off the Russian regime’s attempts to spread its propaganda,” OFAC designated three Russian television stations, Joint Stock Company Channel One Russia, Television Station Russia-1 and Joint Stock Company NTV Broadcasting.

    §  OFAC also issued General License 33, which allows for a wind-down period for these entities through 12:01am ET on June 7, 2022.

    o   New Sanctions on Financial Elites: In line with the promise to “continue and elevate our campaign against the financial elites and family members,” OFAC designated 8 additional current and recent Executive Board members of Sberbank and of 27 additional members of Gazprombank’s Board of Directors as SDNs.

  • State Department Issues Visa Restrictions, Sanctions on Defense Sector: In addition to the actions from OFAC summarized above, the State Department announced the following new restrictions (https://www.state.gov/state-department-actions-to-promote-accountability-and-impose-costs-on-the-russian-government-for-putins-aggression-against-ukraine/):

    o   Visa Restrictions: The Department imposed visa restrictions on 2,596 members of the Russian military and 113 members of the Belarusian military for being complicit or authorizing actions that threaten or violate the territorial sovereignty of Ukraine. The Department also issued entry restrictions on three Belarusian officials for their involvement in a gross violation of human rights.

    o   Restrictions on the Russian Maritime Sector: The Department designated eight Russian companies active in the maritime sector, and the boats that these companies use in their operations. These entities and their boats will be added to OFAC’s SDN list.

  • OFAC Adds to Defense Sanctions: In addition to the banking and SDN designations described above, OFAC also designated Limited Liability Company Promtekhnologiya, a private company that manufactures rifles under the ORSIS brand, as an SDN. (https://home.treasury.gov/news/press-releases/jy0771).

  • Details Emerge on New Ukraine Military Assistance Package: CNN confirmed late Friday that the military assistance package announced by the White House on Friday afternoon would be valued at $150 million. This new announcement is separate from the $33 billion Ukraine assistance proposal announced late last week that is currently before Congress for approval. (https://www.cnn.com/2022/05/06/politics/ukraine-assistance-joe-biden/index.html).

  • Secretary of State Calls Ukrainian Counterpart, Announces Return of Diplomatic Personnel to Kyiv: On Sunday, Secretary of State Antony Blinken called Ukrainian Foreign Minister Dmytro Kuleba. Secretary Blinken told the Foreign Minister that a small group of US diplomatic personnel, including Charge d’Affaires Kristina Kvien, had returned to Kyiv to conduct diplomatic business out of the US embassy in the capital. They also discussed upcoming US assistance packages and efforts to hold Russia accountable for its invasion. (https://www.state.gov/secretary-blinkens-call-with-ukrainian-foreign-minister-kuleba-22/).

  • Deputy Secretary of State Meets with European Counterparts: Deputy Secretary of State Wendy Sherman met with French Minister of Foreign Affairs Secretary General François Delattre, German Minister of Foreign Affairs State Secretary Andreas Michaelis, Italian Minister of Foreign Affairs Secretary General Ettore Sequi, and UK Minister of State for Europe and North America James Cleverly on Saturday. The group discussed future actions related to the war in Ukraine, including coordination on “plans for additional sanctions and other measures to hold the Russian Federation accountable.” (https://www.state.gov/deputy-secretary-shermans-meeting-with-french-german-italian-and-uk-counterparts-2/).

  • First Lady Visits Ukraine, Neighboring Countries: On Sunday, First Lady Jill Biden made a previously unannounced stop at a school serving as a temporary shelter in Uzhhorod, Ukraine. There, she met with Ukrainian First Lady Olena Zelenska in the first public appearance by the Ukrainian First Lady since the conflict in Ukraine began. Dr. Biden has been traveling in Romania and Slovakia to meet with Ukrainian families displaced to both countries as a result of the conflict. (https://www.reuters.com/world/europe/us-first-lady-jill-biden-makes-unannounced-visit-ukraine-2022-05-08/).

UPDATE:

May 06, 2022

  • G7 Leaders, Ukraine Set to Discuss Additional Sanctions and Export Controls on Sunday: On Friday, the leaders of the G7 announced that they will host a call with Ukrainian President Volodymyr Zelenskyy on Sunday. The call gives leaders a chance to finalize sanctions packages, as the EU sanctions negotiations continue into the weekend and the US is reportedly considering restrictions on consulting with Russian companies, export controls on chemicals, and insurance services on energy-related projects. (https://finance.yahoo.com/news/g-7-leaders-discuss-more-124455400.html).

UPDATE:

May 05, 2022

  • OFAC Issues Four New General Licenses for Russia: On Thursday, the Department of the Treasury’s Office of Foreign Asset Control released four new licenses for Russia-related sanctions:

    o   General License 7a: Modifies the authorization for Russian overflight payments, emergency landings, and air ambulance services previously codified in General License 7. (https://home.treasury.gov/system/files/126/russia_gl7a.pdf).

    o   General License 26a: Allows US persons to conduct wind down transactions withJoint Stock Company SB Sberbank Kazakhstan, Sberbank Europe AG, or Sberbank (Switzerland) AG and any entity in which the listed companies hold a greater than 50 percent or greater interest through 12:01am on July 12, 2022. (https://home.treasury.gov/system/files/126/russia_gl26a.pdf).

    o   General License 31: Allows US persons to conduct certain transactions in connection with patent, trademark, copyright, or IP protections that would otherwise be banned under the Russia sanctions. This license has no expiration date. (https://home.treasury.gov/system/files/126/russia_gl31.pdf).

    o   General License 32: Allows US persons to conduct wind down transactions with Amsterdam Trade Bank NV or any entity in which Amsterdam Trade Bank owns a 50 percent or greater interest. (https://home.treasury.gov/system/files/126/russia_gl32.pdf).

  • Fijian Authorities Capture Russian Yacht at US Request: On Thursday, the Department of Justice announced that Fijian authorities had executed a seizure warrant from the US District Court for the District of Columbia freezing the Amadea yacht, which is owned by sanctioned oligarch Suliman Kerimov, in Fijian waters. The yacht was the subject of a Fijian high court case this week, which permitted Fijian authorities to seize the yacht but allowed the defense to seek a stay of the ruling. Attorney General Merrick Garland praised the development, saying, “The Justice Department will be relentless in our efforts to hold accountable those who facilitate the death and destruction we are witnessing in Ukraine.” (https://www.justice.gov/opa/pr/300-million-yacht-sanctioned-russian-oligarch-suleiman-kerimov-seized-fiji-request-united).

  • Abramovich Avoids US Sanctions – For Now:The Washington Post released a profile on Thursday of Russian oligarch Roman Abramovich, who has successfully avoided sanctions in the US, unlike in other jurisdictions. The justification for the lack of sanctions was due to his role as a negotiator between Russia and Ukraine, but thePost indicates that his role in peace talks is diminished of late. The report also discusses a coordinated, international effort to pressure governments to avoid imposing sanctions on Abramovich. (https://www.washingtonpost.com/world/2022/05/05/roman-abramovich-ukraine-russia-oligarchs/).  

UPDATE:

May 04, 2022

  •  Secretary Yellen Believes US Economy Still Strong, Wary of Impact of EU Energy Ban: Speaking at The Wall Street Journal CEO Summit in London, Treasury Secretary Janet Yellen said that the US economy remains strong, even in an environment of global uncertainty. She expressed some concern about the impact of a possible EU energy ban on global commodity prices, saying “We need to see the conditions exactly how this is going to be accomplished because it could lead to higher global oil prices as well. But the desire to respond to Russia’s unprovoked attack on Ukraine and to bring the war to an end is very understandable and important.” (https://www.wsj.com/articles/janet-yellen-says-u-s-economy-remains-strong-11651679702?mod=livecoverage_web).

  • Bipartisan Group of Senators Urge the Department of Commerce to Reconsider Russia’s Market Economy Status: On Tuesday, Senator Rob Portman (R-OH) led a bipartisan group of Senators in sending a letter to Secretary of Commerce Gina Raimondo urging the Department to reconsider Russia’s status as a market economy within the meaning of antidumping laws. The letter highlights the expansion of state ownership in Russia and recent restrictions on foreign currency transactions from the Russian Central Bank. Senators Sherrod Brown (D-OH), James Lankford (R-OK), Mike Braun (R-IN), Angus S. King Jr. (I-ME), Todd Young (R-IN), Chuck Grassley (R-IA), Richard Blumenthal (D-CT), Jack Reed (D-RI), Bill Cassidy (R-LA), Susan Collins (R-ME), Bill Hagerty (R-TN), Cynthia M. Lummis (R-WY), Steve Daines (R-MT), Lisa Murkowski (R-AK), and Roger Wicker (R-MS) also signed onto the letter. (https://www.portman.senate.gov/newsroom/press-releases/portman-colleagues-urge-commerce-secretary-raimondo-reconsider-russias).

UPDATE:

May 03, 2022

  • US Officials:  China Has Steered Clear of Military and Economic Support for Russia: Reuters reported on Tuesday that US officials “have not seen the PRC provide direct military support to Russia’s war on Ukraine or engage in systematic efforts to help Russia evade our sanctions.” The statement comes after consistent warnings of consequences if China took such action. The officials added that they are still monitoring Chinese activity related to Russia. (https://www.reuters.com/world/us-relieved-china-appears-heed-warnings-russia-2022-05-03/).

UPDATE:

May 02, 2022

  • OFAC Issues New General License for Gazprom Germania: On Monday, the Department of the Treasury Office of Foreign Asset Control (“OFAC”) published General License 30, which authorizes transactions with Gazprom subsidiary Gazprom Germania and its 50% or more owned subsidiaries ordinarily prohibited under Directive 3 of Executive Order 14024 (which restricts issuance of debt and equity to certain entities, including Gazprom and its 50% or more owned subsidiaries) through 12:01am EST on September 30, 2021. (https://home.treasury.gov/system/files/126/russia_gl30_0.pdf).

UPDATE:

May 01, 2022

  • Speaker of the House Leads Delegation to Kyiv:On Sunday, Speaker of the House Nancy Pelosi (D-CA) led a Congressional delegation to Kyiv, where the group met with Ukrainian President Volodymyr Zelenskyy. In a statement after the meeting, the delegation said that the purpose of the trip was to “send an unmistakable and resounding message to the entire world: America stands firmly with Ukraine.” They said that President Zelenskyy communicated the “clear need for continued security, economic and humanitarian assistance from the United States” and the group conveyed that more help was on the way. The delegation, which includes Chairman Jim McGovern (D-MA), Chairman Gregory Meeks (D-NY), Chairman Adam Schiff (D-CA), Congresswoman Barbara Lee (D-CA), Congressman Bill Keating (D-MA) and Congressman Jason Crow (D-CO), will continue their travel with a trip to Poland. (https://www.speaker.gov/newsroom/5122).

  • Senate Majority Leader Supports Sanctions Provisions of $33 Billion Ukraine Aid Package:Speaking in New York on Sunday, Senate Majority Leader Chuck Schumer (D-NY) publicly supported White House proposals that would streamline forfeiture proceedings for oligarch-owned properties in the US and criminalize the knowing possession of proceedings of corrupt Russian dealings. He said, “it’s time for sanctioned Russian oligarchs to be held accountable for the ill-gotten wealth that they have received.” (https://www.reuters.com/world/schumer-target-russian-oligarchs-with-provisions-33-bln-ukraine-aid-bill-2022-05-01/).

  • Senate Committee Leaders Want Ukraine Aid to Pass Quickly: Speaking on the Sunday talk shows, Congressman Michael McCaul (R-TX), the Ranking Member of the House Foreign Affairs Committee, and Senator Robert Menendez (D-NJ), the Chairman of the Senate Foreign Relations Committee, expressed confidence that President Biden’s aid package for Ukraine would pass quickly. Congressman McCaul said that “I think time is of the essence” when it comes to the legislation, and Senator Menendez said, “either this week, or the next of course, if there is consensus, if there is an agreement… anything can go through the Senate through unanimous consent…If somehow there is a desire to start picking it apart or having amendments to it, it could last longer, but time is of the essence.” (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-05-01-22/h_e390508d34b8c991de286b93f8d7dd69).

  • Belarusian Opposition Leader Calls on Congress, State Department to Impose Further Sanctions on Belarus: During meetings this week with Congress and the State Department, Belarusian opposition leader Sviatlana Tsikhanouskaya urged the US to impose sanctions on Belarus that mirror those already imposed on Russia. She said in an interview with CNN that the sanctions are effective, but the US needs to close loopholes in the Belarusian sanctions, as well. (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-04-30-22/h_b61df254c22120e5a912eef362c6e4fa).

  • White House Navigating President Putin’s Decision to Attend G20 Summit, Cautioned Against Travel to Ukraine: In the Friday White House press briefing, White House Press Secretary Jen Psaki was asked about Russian President Vladimir Putin’s announced intent to attend the G20 summit, set for six months from now. Though the summit is six months away, Psaki said that the White House is preparing for how to navigate a summit with President Putin while the war in Ukraine continues, noting, “the President has expressed publicly his opposition to President Putin attending the G20.” In addition, when asked about the death of American Willy Cancel, who was fighting alongside Ukrainian forces, Psaki saluted his bravery and said, “we do encourage Americans to find other ways to do so rather than traveling to — rather than traveling to Ukraine to fight there.” (https://www.whitehouse.gov/briefing-room/press-briefings/2022/04/29/press-briefing-by-press-secretary-jen-psaki-april-29-2022/).

UPDATE:

April 29, 2022

  • Blockchain Association Lobbies Against Legislation to Address Cryptocurrency Sanctions Evasion: The Blockchain Association, a lobbying group that represents more than 70 crypto platforms is lobbying against two bills introduced in the House and Senate that would give the Biden Administration the authority to restrict US crypto exchanges from processing payments from Russia, and to sanctions foreign exchanges that process transactions by sanctioned Russian people or companies. The group is arguing that the proposed legislation is not an accurate representation of the use of cryptocurrency to evade sanctions (https://www.cnbc.com/2022/04/29/cryptocurrency-group-lobbies-congress-against-bills-that-target-russian-oligarchs-.html).

  • Top US Envoy to Moscow Addresses American Detainees in Russia and “Nuclear Saber Rattling.” US Ambassador to Moscow John Sullivan continued tensions over the release of additional American detainees following Thursday’s release of former Marine Trevor Reed and “irresponsible rhetoric” over potential use of Russian nuclear weapons.  ( https://www.cnn.com/2022/04/28/politics/us-ambassador-russia-sullivan-cnntv/index.html )

UPDATE:

April 28, 2022

  • White House Proposes Expanded Asset Seizure Authority: On Thursday, the White House announced a legislative package to expand asset seizure authority for the Russia sanctions program. The proposal intends to streamline seizure and forfeiture authority between the Department of the Treasury and the Department of Justice, enable forefitted funds to be used in Ukraine relief efforts, allow property forfeiture for items used in sanctions evasion activities, expand time limits in money laundering investigations, and improve cooperation with allies in sanctions enforcement actions. It also criminalizes knowingly or intentionally possessing proceeds directly obtained from corrupt dealings with the Russian government and adds sanctions evasion to the definition of “racketeering activity” under the Racketeer Influenced and Corrupt Organizations Act (“RICO”). (https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/28/fact-sheet-president-bidens-comprehensive-proposal-to-hold-russian-oligarchs-accountable/).

  • Ukraine Lend-Lease Act Passes House: On Thursday, the House passed the Ukraine Democracy Defense Lend-Lease Act, legislation which waives certain requirements typically applicable to lend-lease transactions on sales for defense articles intended for Ukraine or eastern European countries impacted by the invasion of Ukraine. The bill passed the Senate by unanimous consent in early April, and the legislation now goes to the President’s desk for signature. (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-04-28-22/h_e93a9f453a052e0f92179f9b7753805d).  

UPDATE:

April 27, 2022

  • House Passes Bill Urging President to Sell Seized Assets to Assist Ukraine: On Wednesday, the House of Representatives passed, by a 417-8 margin, nonbinding legislation that would urge the President to sell goods frozen as a result of sanctions on Russia and use the proceeds to fund Ukraine assistance. The legislation comes a day after Attorney General Merrick Garland said that the Department of Justice would have a proposal ready for such a plan within days. (https://www.nytimes.com/2022/04/27/us/politics/biden-russia-sanctions.html).

UPDATE:

April 26, 2022

  • Raytheon “Done in Russia,” Reduces Earnings Outlook: In a Tuesday statement, CEO of Raytheon Greg Hayes said, “we’re done in Russia. Full stop. We aren’t going back.” The statement projected 2022 revenues at $67.75 billion to $68.75 billion, down $750 million from the prior range. Hayes also confirmed that the company was seeking a new supplier of titanium sponge, castings, and forgings after ending its relationship with a Russian supplier of those parts. (https://www.bostonglobe.com/2022/04/26/business/raytheon-cuts-2022-sales-forecast-impact-russia-sanctions/).   

UPDATE:

April 25, 2022

  •  Secretaries of State and Defense Meet with Ukrainian Leadership in Kyiv: On Sunday and Monday, Secretary of Defense Lloyd Austin and Secretary of State Antony Blinken met with Ukrainian leadership in Kyiv and visited the Poland-Ukraine border. Speaking at media availability on the border, Secretary Blinken described the current situation in Russia as, “a military that is dramatically underperforming; an economy, as a result of sanctions, as a result of a mass exodus from Russia, that is in shambles.” The meetings largely focused on military assistance to Ukraine. (https://www.state.gov/secretary-antony-j-blinken-and-secretary-lloyd-austin-remarks-to-traveling-press/).

  • US Diplomatic Presence to Return to Kyiv:During Sunday meetings in Ukraine, Secretary of State Antony Blinken announced that US diplomats will be returning to their posts in Kyiv gradually, beginning with day trips to the western city of Lviv in the coming days. He also noted that the White House had nominated Bridget Brink, a career diplomat, to be US Ambassador to Ukraine. (https://www.state.gov/secretary-blinken-and-secretary-austins-travel-to-ukraine/).

  • Administration Looking Into “Additional Steps” to Hold Russia Accountable for Ukraine Invasion: Speaking in a Sunday interview on Meet the Press, Deputy National Security Advisor John Finer said the US is “looking at a whole range of other additional steps that we could take to hold Russia accountable for the crimes that it’s perpetrating on the ground in Ukraine” when asked if the administration is considering designating Russia as a State Sponsor of Terrorism. (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-04-24-22/h_b1754b1113c6a9df8e8191874ae90fa9).  

  • American Express Shuts Down Ukrainian Wire Service: In a public statement, American Express announced it was shutting down a little-used wire transfer service in Ukraine as a result of US sanctions on Russia and Belarus, saying, “In light of the war in Ukraine and the evolving sanctions environment, which has made it challenging to deliver a reliable customer experience, we suspended a wire transfer service, FXIP, that is used by a small number of businesses to make supplier payments to recipients in Ukraine.” American Express’s card service remains functional in Ukraine, because it has more information on transactions conducted by credit card. FXIP makes up 1.0% of American Express’s revenues, and Ukraine makes up 0.1% of all of FXIP’s volumes. (https://www.wsj.com/articles/russia-sanctions-trip-up-american-express-in-war-torn-ukraine-11650587800?mod=markets_major_pos12).

  • Administration to Ask Congress for Additional Ukraine Assistance: As part of a $13.6 billion package of aid to Ukraine in March, Congress gave the Biden administration $3 billion in discretionary spending. Now, six weeks later, all but $50 million of that discretionary funding pool is allocated, and the administration will need to ask Congress for more money if it wants to continue sending assistance to Ukraine. The vehicle for passing this funding may be the $10 billion COVID-19 funding already moving through the Senate, but that funding is at risk of being held up over a Republican push to vote on border security. (https://www.cnn.com/2022/04/25/politics/ukraine-aid-immigration-fight-congress/index.html).

UPDATE:

April 23, 2022

UPDATE:

April 22, 2022

  • Treasury Secretary Meets with Ukrainian Prime Minister: On Friday, the Treasury Department issued a readout of Treasury Secretary Janet Yellen’s meeting with Denys Shmyal on Thursday. Also in attendance were Ambassador Oksana Markarova, Ukrainian Finance Minister Sergii Marchenko, National Bank of Ukraine Governor Kyrylo Shevchenko, and Deputy Secretary of the Treasury Wally Adeyemo. Secretary Yellen said that the US is committed to hold Russia “accountable for its war in Ukraine,” and also discussed upcoming financial assistance packages for the country. (https://home.treasury.gov/news/press-releases/jy0742).

  • Anheuser Busch to Exit Russia: Anheuser Busch InBev announced that it plans to exit Russia by selling its non-controlling interest in a joint venture with Turkish brewer Andaolu Efes, which operate sin Russia and Ukraine. The sale will charge Anheuser Busch $1.1 billion on its first quarter results. Anheuser Busch previously suspended sales of the Bud brand in Russia and stated it would forfeit profits of the joint venture with Andalou Efes. (https://www.reuters.com/business/brewer-ab-inbev-sell-its-interest-russia-2022-04-22/).

UPDATE:

April 21, 2022

  • Treasury Secretary Discusses EU Oil Ban, Countries Not Participating in Sanctions in Press Conference: During a press conference on Thursday, Treasury Secretary Janet Yellen was asked for her opinion on a potential EU ban on Russian oil and her recent meetings with major economies that had not yet imposed sanctions on Russia. On the oil ban, she hoped that the EU could work out a solution that would not damage international energy markets, positing, “It would be very useful to try to devise a way to reduce [Russian] proceeds from those sales [of Russian oil and gas in the EU] and that really is the proper objective I think of a ban.” On countries that are not yet participating in sanctions, Secretary Yellen stated that she impressed upon these partners that Russia’s actions are in violations of international norms, and she urged “them to take actions to condemn Russia’s behavior.” She added, “we certainly want to make sure that they do not evade sanctions or provide any active support to Russia.” (https://home.treasury.gov/news/press-releases/jy0736).

UPDATE:

April 20, 2022

  • Treasury Department Issues New Sanctions on Facilitators of Sanctions Evasion: On Wednesday, the Department of the Treasury added more individuals and entities to its Specially Designated Nationals list. The new designations focus on sanctions evaders, most notably:

    o   Transkapitalbank, for offering its customers an alternative communication system to SWIFT, and its subsidiaries;

    o   Associates of and companies linked to Konstantin Malofeyev, both for sanctions evasion and propaganda purposes; and

    o   Russian virtual currency mining company Bitriver AG and its subsidiaries. (https://home.treasury.gov/news/press-releases/jy0731).

  • General Licenses Issued for Transkapitalbank:In conjunction with sanctions on Transkaptialbank, the Department of the Treasury issued General License 28, which allows US persons to engage in transactions with Transkapitalbank that ultimately are destined for or originating from Afghanistan through 12:01am eastern on October 20, 2022, and General License 29, which permits US persons to conduct wind down transactions with Transkapitalbank through 12:01am eastern on May 20, 2022, and General License.

  • State Department Issues Visa Restrictions, Designates Otkritie Board: On Wednesday, the State Department issued visa restrictions on 655 Russian individuals, including Duma members involved in repressing independent media, individuals designated for their involvement in human rights violations against Oyub Titiev, officials in the Donetsk and Luhansk People’s Republics, and individuals undermining Belarusian sovereignty. The Department also designated 16 Bank Otkritie board members, which adds their names to the Treasury Department’s SDN list. (https://www.state.gov/promoting-accountability-for-human-rights-abuses-in-russia-and-belarus-and-taking-action-against-sanctions-evaders/).

  • Treasury Secretary Meets with Saudi Arabian, South African Counterparts: On Wednesday, Treasury Secretary Janet Yellen met with Saudi Arabian Minister of Finance H.E. Mr. Mohammed Al-Jadaan and South African Finance Minister Enoch Godongwana. She discussed the conflict in Ukraine with both parties. Saudi Arabia and South Africa have both been reluctant to impose sanctions on Russia for the invasion of Ukraine. (https://home.treasury.gov/news/press-releases/jy0729https://home.treasury.gov/news/press-releases/jy0728).

UPDATE:

April 19, 2022

  • Treasury Issues New General License for Humanitarian Activities in Russia: On Tuesday, the Treasury Department issued General License 27, which permits activities to promote humanitarian projects, democracy building, education, non-commercial development, and environmental protection that otherwise may be blocked under the Russian Harmful Foreign Activities Sanctions, so long as the activity involves processing of funds by blocked financial institutions. (https://home.treasury.gov/system/files/126/russia_gl27.pdf).

  • Treasury Issues Fact Sheet on Local Outreach Activity in Russia: On Tuesday, the Treasury Department issued a fact sheet summarizing all licenses available to promote outreach to local populations in Russia and Ukraine. The highlighted licenses cover agricultural activity, medicine, telecommunications, NGO activity, personal remittances, personal maintenance of US individuals, emergency medical services, US government business, international organization business, and overflight. (https://home.treasury.gov/system/files/126/russia_fact_sheet_20220419.pdf).

  • President Biden, World Leaders Reiterate Commitment to Sanctions: In a Tuesday video call, President Biden joined Canadian Prime Minister Justin Trudeau, European Commission President Ursula von der Leyen, European Council President Charles Michel, French President Emmanuel Macron, German Chancellor Olaf Scholz, Italian Prime Minister Mario Draghi, Japanese Prime Minister Fumio Kishida, NATO Secretary General Jens Stoltenberg, Polish President Andrzej Duda, Romanian President Klaus Iohannis, and British Prime Minister Boris Johnson in expressing solidarity with the Ukrainian people and support for “severe economic costs to hold Russia accountable.” (https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/19/readout-of-the-presidents-call-with-allies-and-partners/).

UPDATE:

April 18, 2022

  • Deputy Treasury Secretary Previews Next Phase of US Sanctions on Russia: Speaking at the Peterson Institute for International Economics on Monday, Deputy Treasury Secretary Wally Adeyemo stated, “as long as Russia’s invasion continues, our sanctions will continue.” He added that the “next phase” of the Treasury Department’s work will focus on “disrupting [Russia’s] military industrial complex and its supply chains…  we are continuing our efforts to use sanctions and export controls to deny Russia the critical inputs it needs, targeting key sectors like aerospace, electronics, and others related to the defense sector.” (https://home.treasury.gov/news/press-releases/jy0719).

  • State Department Reportedly Assessing Potential State Sponsor of Terrorism Designation for Russia:  In a CNN interview on Monday, State Department Spokesman Ned Price said the Department “is taking a close look at the law… and will apply it if it’s effective and appropriate” when asked if the Department was considering designating Russia as a State Sponsor of Terrorism. Price estimated that this process could take several weeks. The interview comes several days after The Washington Post broke news that Ukrainian President Volodymyr Zelenskyy asked President Biden to designate Russia as a State Sponsor of Terrorism. (https://www.cnn.com/europe/live-news/ukraine-russia-putin-new-04-18-22/h_379c2d3bc66d542de9433f5de32fc712).

  • Anti-Corruption Advocates Call on US to Restrict Travel for Advisors to Sanctioned Parties: In a Saturday interview with The Guardian, anti-corruption advocate Bill Browder called on the US to impose visa restrictions on legal and financial experts, primarily in the UK, that help sanctioned parties intimidate whistleblowers and journalists through strategic lawsuits. Browder is prepared to provide a list of attorneys to the State Department for the Department to sanction, but he did not publicly release the list. (https://www.theguardian.com/us-news/2022/apr/16/calls-for-us-to-issue-visa-bans-for-uk-lawyers-enabling-russian-oligarchs).

UPDATE:

April 15, 2022

  • Administration Hesitates to Name Russia a State Sponsor of Terrorism at Zelenskyy’s Request: On Friday, The Washington Post reported that Ukrainian President Volodymyr Zelenskyy asked US President Joe Biden to designate Russia as a State Sponsor oTerrorism, and that President Biden did not make firm commitments as to that request during the call. A State Sponsor of Terrorism designation is one of the most powerful sanctions available to the US, and would restrict Russian government access to property in the US and restrict other nations from doing business with Russia. Only North Korea, Cuba, Iran, and Syria have achieved the designation. (https://www.washingtonpost.com/national-security/2022/04/15/zelensky-biden-russia-terrorism/).

  • US Corporate Bond Market Stalls as Russia Sanctions Increase: Investors are reporting nearly $70 billion in failed bond transactions for the week of April 6, a sharp increase over the long-term average of $40 billion per week in January of 2022. Investors blamed these failed trades on restrictions on payments with Russia, as a bond transaction often involves several parties before settling, and each step of the process could implicate sanctions. (https://www.ft.com/content/a60018df-1a7b-4560-9479-7baea28623df).

UPDATE:

April 14, 2022

  • Administration to Target Sanctions Evaders: Speaking to the National Economic Club on Thursday, National Security Advisor Jake Sullivan stated that he expects the White House to announce “in the next week or two” additional efforts to target entities that are helping Russia evade US sanctions. He also spoke about China, expressing concern about the country’s alignment with Russia. He noted that the administration to date has not seen China providing military assistance to Russia, but admitted that he has limited visibility into transactions between Russia and China. (https://www.cnbc.com/2022/04/14/white-house-focused-on-enforcing-russia-sanctions.html).

  • Commerce Department Identifies Belarusian Aircraft in Violation of Export Controls: On Thursday, the Department of Commerce announced that it had publicly identified 10 additional aircraft operating in violation of US export control laws, namely by flying into Russian and Belarusian territory. The new designations include the first seven Belarusian planes since export controls on the country were expanded. The Department also updated the list to remove two wrongfully designated aircraft, and new tail numbers for previously restricted planes that have been re-registered in Russia. Providing service to any of the listed planes without a license is considered a violation of US export control laws. (https://www.commerce.gov/news/press-releases/2022/04/commerce-department-identifies-first-belarusian-and-more-russian).

  • New State Department Head of Sanctions Coordination Starts Work: On Thursday, the State Department welcomed Jim O’Brien to his new position as Head of the Office of Sanctions Coordination at the Department after he was confirmed by the Senate earlier this week. This is a new office; the Head of the Office of Sanctions Coordination will strengthen cooperation with allies and partners on sanctions issues. (https://www.state.gov/head-of-the-office-of-sanctions-coordination/).

UPDATE:

April 13, 2022

  • JP Morgan Earnings Drop, Company Ties Downturn to Ukraine Conflict: On Wednesday, JP Morgan announced its first quarter financial data. The report indicated that profits were down 42 percent from this time last year, while revenue dropped by a more modest five percent year over year. The bank stated that increased uncertainty as a result of the crisis in Ukraine was a major factor in the reduction in profit. (https://www.cnbc.com/2022/04/13/jpm-earnings-1q-2022.html).

UPDATE:

April 12, 2022

  • Congress Pushes for Private Fund Reform as Sanctions Enforcement Tool: In response to reports that sanctioned Russians may be investing in US private equity funds, several Senators, including Elizabeth Warren (D-MA) and Sheldon Whitehouse (D-RI) sent a letter to FinCEN asking to revive a 2015 proposal that would expand anti-money laundering rules to private investment advisors. Congressman Brad Sherman (D-CA) also amended the America COMPETES Act, currently in the reconciliation process to resolve differences between it and its Senate counterpart, to require companies raising money through private offerings to report identities of investors to the SEC. (https://www.wsj.com/articles/sanctions-spur-calls-to-make-private-equity-vet-investors-11649674802).

  • Private Equity Funds Scramble to Remove Sanctioned Limited Partners: As US sanctions impose asset freezes on wealthy Russian individuals, private equity funds are working to determine if any of their limited partners are sanctioned, and how to remove them from fund ownership. In certain cases, the fund’s ties to sanctioned Russian entities may be so deep that the company may be forced to close. (https://www.wsj.com/articles/sanctioned-lps-complicate-private-equity-fund-dynamics-11649152801).

UPDATE:

April 11, 2022

  • Congressional Delegation Arrives in Poland: On Sunday, a bipartisan Congressional delegation led by House Minority Leader Kevin McCarthy (R-CA) arrived in Poland to demonstrate support for NATO amid the ongoing crisis in Ukraine. Other Members of Congress on the delegation include House Minority Whip Steve Scalise (R-LA), House Foreign Affairs Committee Ranking Member Michael McCaul (R-TX), House Permanent Select Committee on Intelligence Ranking Member Michael Turner (R-OH) and Reps. Ken Calvert (R-CA), French Hill (R-AR), Kathleen Rice (D-NY), Stephanie Murphy (D-FL), Mike Garcia (R-CA) and Michelle Fischbach (R-MN). The group is expected to visit the Ukrainian border later this week. (https://thehill.com/news/house/3263401-bipartisan-group-of-lawmakers-arrives-in-poland/).

UPDATE:

April 9, 2022

  • President Biden Signs Oil Ban, PNTR Restriction Into Law: Late Friday, President Biden signed H.R. 6968, the “Ending Importation of Russian Oil Act,” which statutorily prohibits the importation of energy products from the Russian Federation; and H.R. 7108, the “Suspending Normal Trade Relations with Russia and Belarus Act,” which suspends normal trade relations with the Russian Federation and the Republic of Belarus and seeks to further leverage trade and human rights sanctions, into law. (https://www.whitehouse.gov/briefing-room/legislation/2022/04/08/bills-signed-h-r-6968-and-h-r-7108/).

UPDATE:

April 8, 2022

  • Department of Commerce Expands Russia and Belarus Export Controls: On Friday, the Department of Commerce imposed license requirements for Russia and Belarus for items classified under any export control classification number (“ECCN”) in Categories 0-2 of the Commerce Control List (“CCL”) (previous rules only imposed new license requirements on CCL Categories 3-9). This functionally means that all items on the CCL are subject to a license requirement prior to export to Russia or Belarus. The rule also revises the recently-imposed Russia and Belarus foreign direct product rule to now capture all items on the CCL, and removes certain license exception eligibility for aircraft registered in, owned or controlled by, or under charter or lease by Belarus or a national of Belarus. The rule took effect on April 8. (https://public-inspection.federalregister.gov/2022-07937.pdf).

  • Department of Commerce Announces New Partner Countries for Russia and Belarus Export Control Exceptions:On Friday, the Department of Commerce issued a new rule adding Iceland, Liechtenstein, Norway, and Switzerland to the list of countries that are excluded from certain license requirements of the US Russia/Belarus Sanctions rules, since they have committed to adopt substantially similar export controls as the ones in place in the US. The rule took effect on April 8.(https://www.commerce.gov/news/press-releases/2022/04/commerce-announces-addition-iceland-liechtenstein-norway-and).

UPDATE:

April 7, 2022

  • OFAC, State Department Issue New Sanctions on State-Owned Enterprises: On Thursday, the Department of the Treasury’s Office of Foreign Asset Control (“OFAC”) designated Russian state-owned diamond mining company Alrosa and United Shipbuilding Corporation (“USC”) pursuant to Executive Order 14024. In addition, the State Department designated 28 subsidiaries and 8 board members with ties to USC. All designated individuals will be placed on the Specially Designated Nationals (“SDN”) list. (https://home.treasury.gov/news/press-releases/jy0707).

  • OFAC Issues New Licenses: In addition to the designation of state-owned enterprises, OFAC also issued the following general licenses (https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220407):

    o   General License 9C: allows US persons to transact with certain restricted Russian banks for the purpose of divesting from dealings in debt or equity in Alrosa until 12:01am EST on July 1, 2022.

    o   General License 10C: allows US persons to transact with certain restricted Russian banks for the purpose of divesting from dealings in derivative contracts with Alrosa until 12:01am EST on July 1, 2022.

    o   General License 21A: allows US persons to engage in transactions necessary for the wind down of Alrosa USA, Inc. until 12:01am EST on June 7, 2022.

    o   General License 24: allows US persons to engage in transactions necessary to wind down business with Public Joint Stock Company Alrosa until 12:01am EST on May 7, 2022.

    o   General License 25: allows US persons to engage in payments ordinarily incident and necessary to the receipt of telecommunications, such as “instant messaging, videoconferencing, chat and email, social networking, sharing of photos, movies, and documents, web browsing, blogging, web hosting, and domain name registration services”

  • Commerce Department Takes Enforcement Action Against Three Russian Airlines: On Thursday, the Commerce Department’s Bureau of Industry and Security (“BIS”) issued three temporary denial orders to three Russian airlines, Aeroflot, Azur Air, and UTair, for ongoing violations of US export control laws on aircraft. The orders will terminate the right of these airlines to participate in transactions subject to the Export Administration Regulations for 180 days, subject to renewal. This is the first enforcement action BIS has taken in response to Russia’s invasion of Ukraine. (https://www.commerce.gov/news/press-releases/2022/04/bis-takes-enforcement-actions-against-three-russian-airlines-operating).

  • State Department, G7 Preview Additional Sanctions: In advance of Thursday meetings in Brussels, the G7 released a statement highlighting efforts taken to support Ukraine; the State Department released the statement for US audiences. The statement noted “We stress the necessity of further increasing the economic pressure inflicted on Russia and the Lukashenka regime in Belarus. Together with international partners, the G7 will sustain and increase pressure on Russia by imposing coordinated additional restrictive measures to effectively thwart Russian abilities to continue the aggression against Ukraine.” It added that the G7 members will also work to combat sanctions evasion. (https://www.state.gov/g7-foreign-ministers-statement-on-russias-war-of-aggression-against-ukraine/).

UPDATE:

April 6, 2022

  • Treasury Department Issues New and Extended General Licenses: Accompanying the designation of new Russian entities, the Treasury Department also released a new set of highly conditional general licenses. The licenses permit the following actions:

    o   General License 8B: Extends a previously issued general license authorizing certain prohibited energy transaction.

    o   General License 9B: Extends a previously issued general license authorizing transactions involving divestment or transfer of debt and equity of certain Russian SDN.

    o   General License 10B: Extends a previously issued general license authorizing the wind-down of derivative contracts with certain Russian SDNs.

    o   General License 23: Establishes a wind-down period for Alfa Bank and its 50% or more owned subsidiaries through 12:01 am EST on May 6, 2022.

    o   General License 21: Establishes a wind-down period for Sberbank CIB USA, “including the processing and payment of salaries, severance, and expenses; payments to vendors and landlords; and closing of accounts” through 12:01am EST June 7, 2022.

    o   General License 22: Establishes a wind-down period for Sberbank and its 50% or more owned subsidiaries through 12:01 am EST on April 13, 2022. (https://home.treasury.gov/news/press-releases/jy0705).

  •  Treasury Secretary Warns that a Ban on Russian Oil Exports Would Send Oil Prices “Skyrocketing”: Appearing before the House Financial Services Committee on Wednesday, Treasury Secretary Janet Yellen warned lawmakers that a complete ban on Russian oil and gas would drastically increase global oil prices. She stated, “In designing sanctions, we want to impose the maximum pain we can on Russia, but also taking care not to impose undue pain on Americans.” (https://www.cnn.com/europe/live-news/ukraine-russia-putin-news-04-06-22/h_22b611b962042cf875e7dad3973548cf).

  • DOJ Announces Botnet Disruption, Charges for Sanctions Evasion: In a Wednesday statement, Attorney General Merrick Garland announced that the Department of Justice had filed an indictment for Russian oligarch Konstanin Malofeyev for sanctions evasion. AG Garland also announced that the Department had disrupted a botnet, or a network of hijacked computers used to carry outcyberattacks, controlled by the Russian military intelligence agency GRU before the botnet could be used. (https://www.justice.gov/opa/speech/attorney-general-merrick-b-garland-delivers-remarks-enforcement-actions-disrupt-and).

UPDATE:

April 5, 2022

  • US Blocks Russian Debt Payments in Dollars: The New York Times reported that on Monday, April 4, the US Department of the Treasury blocked Russia from making the latest round of payments on its debt in US dollar, when more than half a billion dollars in Russian sovereign debt payments came due. Russia bought back three quarters of its sovereign debt obligations prior to Monday’s deadline, but the Monday action blocked payment on the remaining $552 million in debt. Russia has a 30-day grace period before being found in default. (https://www.nytimes.com/2022/04/05/business/russia-debt-dollars.html).

  • Treasury Sanctions Darknet Market and Virtual Currency Exchange with Russia Ties: On Tuesday, the US Department of the Treasury designated Hydra Market (Hydra), the world’s largest darknet market, and Garantex, a virtual currency exchange popular in darknet market payments, as Specially Designated Nationals (“SDNs”) subject to comprehensive sanctions. Both companies have significant operations in Russia, and, in announcing the sanctions, Treasury Secretary Janet Yellen said that the sanctions are intended to “send a message today to criminals that you cannot hide on the darknet or their forums, and you cannot hide in Russia or anywhere else in the world.” (https://home.treasury.gov/news/press-releases/jy0701).

  • Twitter No Longer Promoting Russian Government Accounts: In a blog post on Tuesday, Twitter announced that it would no longer amplify or recommend Russian government accounts as part of its policy updates in response to the crisis in Ukraine. The move stops short of an outright ban on Russian government Twitter accounts. Twitter had a similar policy in place for Russian state-affiliated media accounts since 2020. (https://blog.twitter.com/en_us/topics/company/2022/our-ongoing-approach-to-the-war-in-ukraine).

UPDATE:

April 4, 2022

  • DOJ Orchestrates Yacht Capture in Spain: On Monday, the Department of Justice announced that Spanish authorities had captured a $90 million yacht owned by Specially Designated National Viktor Vekselberg in Spain, pursuant to a seizure warrant issued by the DOJ. The yacht is the first asset freeze organized by the Justice Department’s Task Force KleptoCapture, which is dedicated to working with international partners toenforce sanctions against Russian oligarchs. Attorney General Merrick Garland praised the development, saying it “will not be the last” action organized by the task force. (https://www.justice.gov/opa/pr/90-million-yacht-sanctioned-russian-oligarch-viktor-vekselberg-seized-spain-request-united). 

  • Deputy Treasury Secretary Visits Germany:  On Monday, Deputy Treasury Secretary Wally Adeyemo visited Berlin at the end of a trip to Europe. He met with German government counterparts, including Wolfgang Schmidt, Head of the Federal Chancellery, Dr. Jörg Kukies, Chief Economic and EU Advisor to the German Chancellor, Luise Hölscher, State Secretary for the Ministry of Finance, Udo Philipp, State Secretary for the Federal Ministry for Economic Affairs and Climate Action, and Susanne Baumann, State Secretary for the Federal Foreign Office. They discussed sanctions coordination, with a particular focus on sanctions evasion efforts, particularly through cryptocurrency. They also discussed ways to increase costs on Russia while mitigating spillover effects. Adeyemo also met with representatives of the Russian Elites, Proxies, and Oligarchs (REPO) Task Force on sanctions enforcement. (https://home.treasury.gov/news/press-releases/jy0698).  

UPDATE:

April 3, 2022

  • US Ready to Increase Sanctions: In Sunday interviews, US officials expressed a willingness to increase sanctions on Russia as new reports revealed details of Russian atrocities against civilians in Bucha, Ukraine. Secretary of State Antony Blinken said that he was working “every single day” with counterparts to ensure sanctions “are not only tightened, but increased” on Russia, and State Department Spokesman Ned Price stated “we’ll continue to escalate the pressure until and unless the Kremlin relents, but we’re not going to preview specific sanctions.” (https://www.washingtonpost.com/us-policy/2022/04/03/bucha-sanctions-russia-biden/).

  • Deputy Treasury Secretary Visits Paris:Continuing his recent travel through Europe, Deputy Treasury Secretary Wally Adeyemo stopped in Paris on Sunday to meet with members of the French interagency team involved in the international Russians Elites, Proxies, and Oligarchs (REPO) Task Force, including the Directorate General of the Treasury, Ministry of Justice, and National Directorate of Customs Intelligence and Investigation. The group discussed sanctions enforcement mechanisms. He also discussed sanctions coordination with Secretary General of the Élysée Palace Alexis Kohler. (https://home.treasury.gov/news/press-releases/jy0697).

UPDATE:

April 2, 2022

  • Non-Sanctioned Oligarchs Preparing for Sanctions, US Investigator Says: In a Friday interview with Reuters, Andrew Adams, the prosecutor leading Task Force KleptoCapture, stated that the Task Force has seen signs of Russian oligarchs, even those that are not currently subject to US sanctions, are moving their assets to difficult-to-investigate jurisdictions. Adams added that the Task Force has seen cooperation from international partners and the private sector in tracking assets of sanctioned individuals. (https://www.reuters.com/world/us-task-force-russian-oligarchs-sees-evidence-sanctions-evasion-unit-chief-2022-04-01/).

UPDATE:

April 1, 2022

  • BIS Adds 120 to Entity List: As previewed yesterday, the Department of Commerce on Friday added 120 entries to its Entity List. Ninety-five (95) entities are being added as military end-users under the destinations of Belarus (24 entities) and Russia (71 entities) for acquiring and attempting to acquire items subject to the Export Administration Regulations (EAR) in support of Belarus’s and Russia’s militaries. Twenty-five (25) entities also are being added under the destination of Russia for acquiring and attempting to acquire items subject to the EAR in support of Russia’s military modernization efforts. The 95 “military end users” are being designated under Footnote 3, which subjects them to the Russian/Belarusian Military End User foreign-produced “direct product” rule that applies to reexports, exports from abroad, and transfers (in-country) of certain foreign produced items based on controlled US technology, software, or tooling. (https://www.commerce.gov/news/press-releases/2022/04/commerce-adds-120-entities-russia-and-belarus-entity-list-further).

  • Secretary of State Blinken Discusses Response to Russia with UK Counterpart: On Friday, Secretary of State Antony Blinken met with UK Foreign Secretary Liz Truss. The two discussed the conflict in Ukraine, including “developing additional possible actions to ratchet up our response to Putin’s continued assault on the Ukrainian people.” (https://www.state.gov/secretary-blinkens-call-with-uk-foreign-secretary-truss-6/).

UPDATE:

March 31, 2022

  • Treasury Sanctions 34 New Entities and Individuals, including Third Country Entities Involved in Sanctions Evasion, Names New Sanctioned Russian Sectors: On Thursday, the Treasury Department took two new actions to further restrict trade with Russia:

    o    New Designations: The Treasury Department designated 34 more parties, including 21 entities and 13 individuals, on its Specially Designated National list. The designated individuals include Russia’s largest chipmaker and entities designated based on determinations of involvement in malicious cyber activities. The restrictions also target British, Spanish, and Singaporean entities determined to be “front companies” that assisted designated Russian companies in evading sanctions.

    o    Expanded Sector Bans: The Treasury Department announced that sanctions would be imposed on any entity or individual “determined to operate or have operated” in the Russian aerospace, marine, and electronics sectors. These actions were taken pursuant to section 1(a)(i) of Executive Order 14024. (https://home.treasury.gov/news/press-releases/jy0692).

  • Huawei Faces Potential US Sanctions Over Russia: As reported in The Financial Times, Chinese telecommunications firm Huawei’s close ties to Russia may expose them to sanctions in the US. The company’s sales to Russia have expanded since the annexation of Crimea, but, since their devices often contain high-end semiconductors or are made with US tools, they may be subject to new export controls. (https://www.ft.com/content/3c3c1db5-21d5-45e7-85a8-d5d25cc9ad7b).

  • Deputy Treasury Secretary Visits Belgium: Deputy Treasury Secretary Wally Adeyemo visited Brussels on Thursday, where he and Office of Foreign Asset Control head Andrea Gacki met with held a dialogue on sanctions with European Commissioner for Financial Services, Financial Stability, and Capital Markets Union Mairead McGuinness, and Stefano Sannino, Secretary General of the European External Action Service. The group “discussed steps to align sanctions implementation and enforcement, expand joint cooperation on sanctions, and further deepen the transatlantic sanctions alliance.” (https://home.treasury.gov/news/press-releases/jy0693).

UPDATE:

March 30, 2022

  • Breakthrough on PNTR Bill in the Senate: On Wednesday, Senator Rand Paul (R-KY) reached an agreement with Senate leadership on the House-passed version of legislation suspending permanent normal trade relations (“PNTR”) with Russia. Senator Paul had been holding the bill up over concerns that it did not properly define a “serious” human rights violation in its reauthorization of Magnitsky Act sanctions; if a definition is included in the legislation, the bill can advance to the Senate for a vote, as long as other minor objections are cleared. (https://thehill.com/homenews/senate/600374-rand-paul-cuts-deal-on-russia-trade-bill).

  • Senators Meet with Ukrainian Members of Parliament: On Wednesday, Senators Dick Durbin (D-IL) and Rob Portman (R-OH), the Co-Chairs of the Senate Ukraine Caucus, hosted Ukrainian Members of Parliament Lesia Zaburanna, Yevheniya Kravchuk, Anastasia Radina, and Maria Ionova. Ukrainian Ambassador to the U.S. Oksana Markarova and Polish Members of Parliament were also in attendance. In his statement after the meeting, Senator Portman called on NATO and EU allies to “do more quicker by way of stronger sanctions” and military assistance. (https://www.durbin.senate.gov/newsroom/press-releases/durbin-portman-ukraine-caucus-meet-with-members-of-the-ukrainian-parliament).

  • Deputy Treasury Secretary Praises UK Sanctions Cooperation During Visit: On Wednesday, the Treasury Department released a readout of Deputy Treasury Secretary Wally Adeyemo’s visit to the UK. During the trip, he met with Permanent Secretary of HM Treasury Sir Tom Scholar, HM Treasury Director General for International and EU Lindsey Whyte, and Deputy National Security Advisor Matt Collins. During the meetings, he “expressed gratitude for the close partnership and noted that the UK’s new sanctions authorities have allowed for greater breadth and flexibility in targeting, coordination, and enforcement.” (https://home.treasury.gov/news/press-releases/jy0690).

UPDATE:

March 29, 2022

  • Treasury Official Previews Future Sanctions: In a speech at Chatham House in London today, Deputy Treasury Secretary Wally Adeyemo stated that the US is “planning to target additional sectors that are critical to the Kremlin’s ability to operate its war machine, where a loss of access will ultimately undermine Russia’s ability to build and maintain the tools of war that rely on these inputs.” He said that future sanctions will “disrupt their critical supply chains.” He noted that the actions will be coordinated with over 30 allies and partners. (https://home.treasury.gov/news/press-releases/jy0684).

  • US Applauds Expulsion of Russian Ambassadors in European Countries: After news broke on Tuesday that several European countries had expelled Russian diplomats for national security reasons, State Department Spokesman Ned Price released a statement supporting the move. He stated, “we stand unified with our partners in protecting their national security from the Russian Federation’s intelligence threats and against threats to democracy.” (https://www.state.gov/support-of-partners-expelling-russian-intelligence-officials/).

UPDATE:

March 28, 2022

  •  Treasury Secretary Talks Russia Sanctions with Prime Minister of Singapore: In a Monday meeting with Prime Minister of Singapore Lee Hsien Loong, Treasury Secretary Janet Yellen “affirmed the United States’ support for Ukraine’s sovereignty and underscored the importance of the international community holding Russia accountable for its unprovoked and illegal invasion of Ukraine, including through the implementation of targeted financial sanctions.” (https://home.treasury.gov/news/press-releases/jy0682).  

  • White House Budget Increases Export Control Funding: On Monday, the White House released its FY2023 budget proposal for the Federal Government. The White House is proposing a $30 million increase in funding to the Department of Commerce’s Bureau of Industry and Security (“BIS”), which administers export controls. BIS has played an important role in imposing new export controls on Russia and Belarus since the start of Russia’s invasion of Ukraine. The budget is subject to Congressional review. (https://www.whitehouse.gov/wp-content/uploads/2022/03/budget_fy2023.pdf).

UPDATE:

March 27, 2022

  • Human Rights Sanctions Provision Holds Up PNTR Legislation: Senator Rand Paul (R-KY) is attempting to amend the House-passed version of the legislation revoking permanent normal trade relations (“PNTR”) with Russia and Belarus due to portions of the bill that reauthorize the Global Magnistky human rights sanctions. Senator Paul would like to amend the bill to include a definition of “human rights abuse.” (https://thehill.com/homenews/senate/599819-rand-paul-standoff-throws-russia-bills-into-limbo).

UPDATE:

March 26, 2022

  • President Biden Highlights Sanctions Efficacy in Warsaw Address: In his address in Warsaw on Saturday night, President Biden said that, because of sanctions packages imposed by many countries, the Russian economy is “on track to be cut in half in the coming years.” He also praised the “over 400” private companies that have decided to suspend operations in Russia. President Biden added, “swift and punishing costs are the only thing that are going to get Russia to change its course.” (https://abcnews.go.com/Politics/full-transcript-president-bidens-speech-warsaw-russias-invasion/story?id=83690301).

  • Treasury Maintains Contact with Ukrainian Counterparts: On Saturday, Deputy Treasury Secretary Wally Adeyemo called Ukrainian Minister of Finance Sergii Marchenko. The Deputy Secretary promised to “continue working with partners and Allies to impose costs on Russia for its brutal and illegal war of choice.” (https://home.treasury.gov/news/press-releases/jy0680).

UPDATE:

March 25, 2022

  • Treasury Secretary Does Not Anticipate Sanctions on China: In a Friday interview on CNBC, Treasury Secretary Janet Yellen said that she did not think sanctions on China for its ties to Russia were “necessary or appropriate.” She added, “We would be very concerned if they were to supply weapons to Russia, or to try to evade the sanctions that we’ve put in place on the Russian financial system and the central bank… we don’t see that happening at this point.” (https://www.cnbc.com/2022/03/25/treasury-secretary-janet-yellen-sees-no-need-for-china-sanctions-over-russia-war.html).

UPDATE:

March 24, 2022

  • Administration Reportedly Exploring Secondary Sanctions: White House sources told The Washington Post that the administration is considering “secondary sanctions” on Russia, which would punish third parties in other countries that interact with parts of the Russian economy already sanctioned by the United States. The administration already has the authority to impose these sanctions, but it has not done so yet. The administration sources said that no final decision has been made on the issue yet, and added that the decision was “probably not imminent.” (https://www.washingtonpost.com/us-policy/2022/03/24/russia-economy-sanctions/).

  • Biden Discusses Sanctions and China in NATO Press Conference: In a press conference after meeting with NATO leaders, President Biden reiterated that NATO was united in imposing “the mostsignificant economic sanction regime ever” on Russia. President Biden stated that, while he did not “threaten” Chinese President Xi Jinping during a call last week, the Chinese President “understood the consequences” of China assisting Russia. Regarding sanctions, President Biden stated that, while “sanctions never deter”, sustained economic pressure on Russia will be the thing that he believes will stop Russian President Vladimir Putin. (https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/03/24/remarks-by-president-biden-in-press-conference-7/).

UPDATE:

March 23, 2022

  • US to Sanction Russian Duma Members: Sources in the White House have stated that the administration is developing a sanctions package on members of the Russian Duma, which may impact over 300 members. Though the sources stated that “no final decisions have been made about who we will sanction and how many we will sanction,” the package is expected to be announced Thursday. (https://www.reuters.com/world/biden-heads-europe-with-more-sanctions-russia-2022-03-23/).

  • PNTR Legislation Stalls in the Senate:After the House overwhelmingly passed a bill suspending permanent normal trade relations (“PNTR”) with Russia and Belarus this week, the Senate is still debating on including more information in the legislation. Republicans, like Senate Finance Committee Ranking Member Mike Crapo (R-ID), would like to link the House’s PNTR legislation with proposals to ban the import of Russian energy products, though the process for amending the legislation or linking the bills would delay passage. Democrats, like Senate Majority Leader Chuck Schumer (D-NY) would rather pass the House legislation as-is and suspend PNTR as quickly as possible. (https://thehill.com/homenews/senate/599307-senate-hurdles-slow-bill-to-limit-trade-with-russia).
  • President Biden Letter to Governors Urging Cyber Preparedness:On Wednesday, reports emerged that President Biden had sent letters to the nation’s Governors and the Mayor of Washington, DC warning them to prepare for Russian cyberattacks. These letters, dated March 18, urged Governors to assess their baseline security standards, follow federal cybersecurity guidelines, and remain in close contact with federal regulators as possible attacks unfold. (https://www.politico.com/news/2022/03/23/biden-governors-infrastructure-russian-hackers-00019647).

UPDATE:

March 22, 2022

  • President Biden Praises Businesses that Have Ceased Operations in Russia: In a Monday night speech at the Business Roundtable, President Joe Biden was “pleased to see American companies stepping up and doing their part” by ceasing operations in Russia. He added that private sector assistance in complying with sanctions and stopping operations in Russia incurred “real costs” on the Russian economy. He also repeated his warning from earlier in the day that Russia may increase its cyberattacks against the US, and urged the assembled businesses to prepare for them. President Biden also praised the international community, particularly NATO allies and the Quad nations, with the exception of India, for presenting a united front against Russian aggression. (https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/03/21/remarks-by-president-biden-before-business-roundtables-ceo-quarterly-meeting/).

UPDATE:

March 21, 2022

  • Several US Food and Medical Products Companies Commit to Continue Operations in Russia: As international pressure increases on businesses to cease operations in Russia, several major US companies signaled their intentions to continue working there. These companies include:

    o   Major agriculture and pharmaceutical companies, like Cargill, Bayer, and Archer Daniels Midland have expressed humanitarian concerns over food and medical availability in Russia, noting that suspensions of operations in Russia could reverberate down the global food supply chain. Pharmaceutical companies Johnson and Johnson and AmerisourceBergen announced that they have stopped new operations in Russia, though they would continue distribution of cancer drugs and clinical trials. (https://www.wsj.com/articles/agriculture-giants-stay-in-russia-despite-calls-to-exit-over-ukraine-war-11647860581).

    o   Though parent company Papa John’s international has stated that it intends to suspend all corporate operations in Russia, the 190 Papa John’s franchises in Russia remain in operation, as the Russian company that controls these franchises has permitted them to continue operating. Other fast food franchises, like Burger King, are in similar situations. (https://www.nytimes.com/2022/03/14/business/papa-johns-russia.html).

  • CEOs Meet at White House to Discuss Ukraine: On Monday, CEOs from 16 major US corporations met with Secretary of Treasury Janet Yellen, Secretary of Commerce Gina Raimondo, National Security Advisor Jake Sullivan, Senior Advisor Cedric Richmond, and National Economic Council Director Brian Deese at the White House to discuss the invasion of Ukraine and its economic effects. President Biden briefly joined the event. The Administration representatives focused on the commitment to impose “heavy costs” on Russia, while taking concrete action to prevent domestic price hikes that resulted from international sanctions. Supply chain disruptions, particularly in the agricultural and energy sector, came up, as well.  (https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/21/readout-of-the-administrations-briefing-of-ceos-on-russias-war-against-ukraine/).  

UPDATE:

March 20, 2022

  • Details Emerge on President Biden’s Trip to Europe: President Biden is scheduled to travel to Europe for meetings with NATO allies next week. However, White House Press Secretary Jen Psaki said that the trip will not include a visit to Ukraine, instead saying the “trip will be focused on continuing to rally the world in support of the Ukrainian people.” (https://twitter.com/PressSec/status/1505559699055382538?s=20&t=u7bnPcXQS7dLBKepWr6IIw).

UPDATE:

March 19, 2022

  • Commerce Department Publishes List of Private and Commercial Aircraft That Have Flown to Russia in Violation of US Export Controls and Issues Warning Against Providing Any Services to Such Aircraft.   On Friday night, the Bureau of Industry and Security (BIS) published a list of commercial and private aircraft that have flown to Russia in violation of recently imposed US export licensing restrictions against Russia.  The publication – including tail number, serial number, operator and aircraft type – constitutes public notice that these aircraft have been involved in violations of the export control laws, and that any person who provides any form of service to the aircraft will be subject to potentially significant monetary penalties and collateral consequences under the US export control laws. https://www.commerce.gov/news/press-releases/2022/03/commerce-department-identifies-commercial-and-private-aircraft-exported 

  •  Senate Delegation Visits Poland and Germany:On Saturday, a bipartisan group of Senators arrived in Europe to visit facilities in Russia and Germany to understand the military impact the Russian invasion of Ukraine is having on NATO, and the humanitarian impact the invasion is having on neighboring countries. The group included Senators Joni Ernst (R-IA), Shelley Moore Capito (R-WV), Susan Collins (R-ME), John Cornyn (R-TX), Steve Daines (R-MT), Kirsten Gillibrand (D-NY), Angus King (I-ME), Roger Marshall (R-KS), Jerry Moran (R-KS), and Jacky Rosen (D-NV). (https://www.ernst.senate.gov/public/index.cfm/press-releases?id=71581E8E-9070-466D-9A4A-7646CC2832B3).

UPDATE:

March 18, 2022

  • Commerce Department Bans Maintenance of Certain Russian Planes: On Friday, the Department of Commerce released a list of planes owned, controlled by, or under charter lease to, Russia or Russian nationals; any “subsequent action taken with regard to any of the [listed] aircraft, including, but not limited to, refueling, maintenance, repair, or the provision of spare parts or services, are subject to the prohibitions outlined in General Prohibition Ten of the EAR (Section 736.2(b)(10)).” The prohibition could effectively ground all these planes. (https://www.commerce.gov/news/press-releases/2022/03/commerce-department-identifies-commercial-and-private-aircraft-exported).

UPDATE:

March 17, 2022

  • House Passes Bill Suspending Normal Trade Relations with Russia, Belarus: On Thursday afternoon, the House of Representatives passed legislation revoking permanent normal trade relations with Russia and Belarus. The vote was bipartisan, with 424 votes in favor of passage and 8 votes against. The bill text, availablehere, would:

    o    Revoke most-favored-nation status for both countries the day after the bill is enacted;

    o    Grant the President the authority to raise tariff rates on both countries through January 1, 2024;

    o    Grant the President the authority to restore normal trade relations if Russia and Belarus withdraw from Ukraine;

    o    Allows Congress to submit a disapproval resolution to block any decision to normalize relations; and

    o    Renew the Global Magnitsky sanctions program indefinitely.

    The bill now moves to the Senate for another vote. Senate Majority Leader Chuck Schumer (D-NY) has indicated that passing this bill is a priority. (https://thehill.com/policy/finance/598662-house-passes-bill-to-end-normal-trade-relations-with-russia-belarus).

  • Treasury Department Releases Joint Statement for REPO Task Force: After launching the Russian Elites, Proxies, and Oligarchs (“REPO”) Task Force yesterday, participating country ministers released a joint statement today reiterating their commitment to “take all available legal steps to find, restrain, freeze, seize, and, where appropriate, confiscate or forfeit the assets of those individuals and entities that have been sanctioned in connection with Russia’s premeditated, unjust, and unprovoked invasion of Ukraine and the continuing aggression of the Russian regime.” (https://home.treasury.gov/news/press-releases/jy0663).

UPDATE:

March 16, 2022

  • Departments of Treasury, Justice Launch Multilateral Oligarch Task Force: After meeting with representatives from Australia, Canada, Germany, France, Italy, Japan, the UK, and the European Commission, Treasury Secretary Janet Yellen and Attorney General Merrick Garland announced the creation of the Russian Elites, Proxies, and Oligarchs (“REPO”) Multilateral Task Force. The Task Force will serve as an information sharing platform for sanctions enforcement actions, and will help the participants align enforcement policies. The Justice Department’s Task Force KleptoCapture will support REPO’s efforts. (https://www.justice.gov/opa/pr/us-departments-justice-and-treasury-launch-multilateral-russian-oligarch-task-force).

UPDATE:

March 15, 2022

  • Treasury Sanctions Russians, Re-Designates Belarusian President: On Tuesday, the Treasury Department’s Office of Foreign Asset Control designated four individuals and one entity under the Magnitsky Act for concealing events surrounding the death of Sergei Magnitsky. The press release also noted the re-designation Belarusian President Alyaksandr Lukashenka under a new sanctions authority, and his wife, who was listed for the first time. Both were listed under the authority of Executive Order 13405. (https://home.treasury.gov/news/press-releases/jy0654).

UPDATE:

March 14, 2022

  • US Warns Allies that China is Prepared to Assist Russia: Reporting suggests that the US sent diplomatic cables to allies in Europe and Asia that China is willing to provide military assistance to Russia as it invades Ukraine. China has denied these allegations. US officials are closely monitoring the situation and are prepared to impose “consequences” on China if such a transaction were to occur. (https://www.ft.com/content/52ea7aab-f8d1-46b6-9d66-18545c5ef9b9).

  • Zelenskyy to Address Congress Wednesday: On Monday, Speaker of the House Nancy Pelosi (D-CA) announced that Ukrainian President Volodymyr Zelenskyy would address a joint session of Congress on Wednesday, March 16. (https://www.speaker.gov/newsroom/31422-0).

UPDATE:

March 13, 2022

  • National Security Director Warns China to Comply with Sanctions: During a Sunday interview, National Security Advisor to President Biden Jake Sullivan reiterated the administration’s commitment to sanctioning Chinese entities that help Russia evade sanctions, saying “we are communicating directly, privately to Beijing, that there will absolutely be consequences for large-scale sanctions evasion efforts or support to Russia to backfill them.” Sullivan is set to meet with China’s top diplomat, Yang Jiechi, on Monday in Rome, where the topic of sanctions evasion will come up, per administration sources. (https://www.theguardian.com/us-news/2022/mar/13/jake-sullivan-biden-national-security-adviser-china-russia).

UPDATE:

March 12, 2022

  • Yellen Expects Dollar to Maintain Reserve Currency Status, Despite Sanctions: In a Saturday interview, Treasury Secretary Janet Yellen stated that she believed the US dollar would maintain its status as the world’s reserve currency, despite severe sanctions imposed on Russia. She noted that, due to sanctions, “China has engaged in searches [for alternate arrangements], Russia has as well, but it’s really not come close to inventing any kind of substitute for the dollar.” (https://www.reuters.com/markets/europe/yellen-says-gas-tax-cut-among-options-ease-higher-costs-pump-2022-03-12/).

UPDATE:

March 11, 2022

  • White House Announces Coordinated Action Against Russia: In a Friday statement, the Biden administration announced that, in coordination with G7 partners, the United States would be taking the following measures to combat Russian aggression in Ukraine:

    o   Revoking Permanent Normal Trade Relations with Russia: The announcement stated that this will be done through legislation, which the House has worked to include in its legislative packages on Russia.

    o   Denying Russian Borrowing Privileges at Multilateral Institutions: This would cut off Russia’s ability to access funds at the International Monetary Fund and the World Bank.

    o   Blocking Sanctions on Russian Elites: The announcement named Yuri Kovalchuck and Duma members that sponsored legislation to recognize separatist regions in eastern Ukraine.

    o   Export Ban on Luxury Goods to Russia: The President will sign an executive order banning export of luxury goods to any person located in Russia. This includes high end watches, cars, apparel, alcohol, and jewelry.

    o   Import Ban on Signature Russian Goods: The above-mentioned executive order will also ban imports of seafood, spirits, and non-industrial diamonds.

    o   Guidance on Virtual Currency: The Treasury Department will issue further guidance to require US persons to comply with sanctions against Russia through transactions in both fiat and virtual currency.

    o   Ban on New Investment in Russia: The above mentioned executive order will also ban future investment in any sector of the Russian economy, not just energy. (https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/11/fact-sheet-united-states-european-union-and-g7-to-announce-further-economic-costs-on-russia/).

    o   Ban on Export of DollarDenominated Bank Notes: Though not mentioned in the fact sheet, the executive order text indicates that the US will ban the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of U.S. dollar-denominated banknotes to the Government of the Russian Federation. (https://www.whitehouse.gov/briefing-room/presidential-actions/2022/03/11/executive-order-on-prohibiting-certain-imports-exports-and-new-investment-with-respect-to-continued-russian-federation-aggression/).

    •  Relevant Agencies Implement White House Announcement: Once President Biden announced the additional measures against Russia, Federal agencies worked to implement the new measures

      o   Treasury Issues Sanctions on Oligarchs: The Treasury Department published the list of oligarchs to be placed on the Specially Designated National (“SDN”) list. They include three family members of President Putin’s spokesman, the management board of VTB Bank, Viktor Vekselberg, and 12 members of the Duma. (https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220311). Treasury also issued the following licenses in connection with the executive order:

      –  General License 17 permits the import of fish, seafood, alcoholic beverages, and non-industrial diamonds from Russia so long as they are imported under contracts entered into prior to March 11. These transactions are authorized until March 25, 2022.

      –  General License 18 permits non-commercial, personal remittances to Russia.

      –  General License 19 permits US persons located in Russia to engage in transactions necessary for day to day living.

      –  General License 23 for Ukraine allows for charitable and NGO-related activities in the Donetsk People’s Republic and the Luhansk People’s Republic.

      o   Treasury Issues Digital Currency FAQ: The new FAQ states that all US persons must comply with the sanctions on Russia, whether the payment is through digital currency or fiat currency. This includes virtual currency exchanges, virtual wallet hosts, and digital currency service providers. (https://home.treasury.gov/policy-issues/financial-sanctions/faqs/1021).

      o   Commerce Department Releases Rule Banning Luxury Good Exports: Following on the President’s announcement above, the Commerce Department issued a rule banning the export of luxury goods to Russia and imposing restrictions on Russian and Belarusian oligarchs designated on the Treasury Department’s SDN list. (https://www.commerce.gov/news/press-releases/2022/03/commerce-restricts-export-luxury-goods-russia-and-belarus-and-russian).

  • Treasury Sanctions Russian Network Supporting North Korean Missile Launches: In addition to the Ukraine-related sanctions, the Treasury Department also placed a group of three Russians and two companies that assisted North Korean nuclear missile development on the SDN list. (https://home.treasury.gov/news/press-releases/jy0651).

  • US Lawmaker Considers Restrictions on Russian Sovereign Debt Purchases: After press reports emerged that Goldman Sachs was purchasing low-priced Russian sovereign debt, Representative Brad Sherman (D-CA) confirmed that he was considering legislation banning foreign subsidiaries of US companies from trading in Russian debt issued after March 1. He selected that date because it was his intent to not punish purchases made prior to the invasion of Ukraine. (https://www.nbcnews.com/politics/politics-news/goldman-sachs-profits-ukraine-war-loophole-sanctions-rcna19584).

UPDATE:

March 10, 2022

  • US House Passes Russian Oil Import Ban: Late Wednesday evening, the House passed legislation banning the import of Russian energy products by a vote of 414-17. The legislation also includes a reauthorization for the Global Magnitsky Act and directs the U.S. Trade Representative to push for Russia’s removal from the WTO. The legislation now moves to the Senate for further consideration. Full text of the bill is available here. (https://www.cnn.com/2022/03/09/politics/house-passes-russia-oil-ban/index.html).  

UPDATE:

March 09, 2022

  • Energy Import Ban Legislation Released: The House Rules Committee on Wednesday released text of HR 6968, which would suspend energy imports from Russia. The proposed legislation would ban the import of products classified under HTS chapter 27, which includes coal and oil, unless the product was imported under a contract entered into prior to passage of the legislation, or if the President waives the ban in the national interest. The Presidential waiver is subject to a joint Congressional ruling of disapproval. The legislation also permanently would also extend the Magnitsky Act sanctions and instruct the USTR to attempt to expel Russia from the WTO. The legislation is not yet on the floor for debate. (https://rules.house.gov/sites/democrats.rules.house.gov/files/BILLS-117HR6968IH.pdf).

  • Commerce Secretary Says US “In It For The Long Haul” on Sanctions: In a Wednesday evening interview, Commerce Secretary Gina Raimondo stated that the US and its partners are “in it for the long haul” and will maintain sanctions on Russia for “as long as it takes.” She reiterated her statements from yesterday on the Department’s willingness to sanction Chinese entities that aid Russia, though she added that Chinese companies have largely complied with the sanctions. (https://www.cnn.com/europe/live-news/ukraine-russia-putin-news-03-09-22/h_aac1b16988bfdb15e836cdf27ef00b39).

  • Amazon Suspends Retail, New AWS Applications in Russia: Online retailer Amazon announced it would suspend the shipment of retail products to Russia and Belarus, disconnect Prime Video in both countries, and deny any new applications for AWS web hosting services from both countries. In its announcement, the company added that it does not have any active data centers or offices in Russia. (https://www.aboutamazon.com/news/community/amazons-assistance-in-ukraine#March8).

UPDATE:

March 08, 2022

  • Treasury Department Provides Guidance for Executive Order: In addition to the announcement from the White House, the Treasury Department issued its own guidance documents for interpreting the Order. The Department issued General License 16, which authorizes energy transactions entered into prior to March 8 through April 22, 2022. It also clarified that General License 8A, which allows for energy related transactions with certain Russian banks, is still in effect, among other clarifying points. (https://home.treasury.gov/news/press-releases/jy0641).

  • Commerce Secretary States Restrictions for Chinese Companies that Defy US Sanctions Possible: In an interview with The New York Times, Commerce Secretary Gina Raimondo stated that Chinese companies that defy US restrictions on exports to Russia could be cut off from American software and equipment. She noted that the US could “essentially shut down” Semiconductor Manufacturing International and other Chinese companies like it. (https://www.nytimes.com/2022/03/08/technology/chinese-companies-russia-semiconductors.html).  

  • Speaker Pushes for Vote on Oil Import Ban: On Tuesday, Speaker of the House Nancy Pelosi stated that the House would vote to ban Russian oil imports to the US later that day. The draft legislation text, which was introduced the same day, contained provisions that banned Russian oil and energy imports into the United States, reviewed Russia’s access to the World Trade Organization, and authorized the Global Magnitsky Human Rights Act to sanction Russia for its actions in Ukraine.  As of 5pm Tuesday, the vote had not yet occurred, and it is unclear which of these provisions would make it into final legislation, though reports have emerged that the suspension of permanent normal trade relations with Russia and Belarus has been removed from the proposal. (https://www.speaker.gov/newsroom/3822-0).

UPDATE:

March 07, 2022

  • Bipartisan Agreement on Russian Oil Import Ban Reached: In a Monday statement, the leaders of the House Ways and Means Committee and the Senate Finance Committee announced that they would be introducing legislation that would ban the import of Russian oil, require the White House to advocate for Russia’s removal from the WTO, oppose Belarus’s entry into the WTO, and increase trade barriers with Russia. (https://thehill.com/policy/finance/597179-house-senate-trade-leaders-propose-russian-energy-ban).

UPDATE:

March 06, 2022

  • US Considering Ban on Russian Oil Imports: In interviews on Sunday, US Secretary of State Antony Blinken said that the administration is considering banning the import of oil from Russia, in coordination with European allies. The Secretary said, “I was on the phone yesterday with the President and other members of the cabinet on exactly this subject, and we are now talking to our European partners and allies to look in a coordinated way at the prospect of banning the import of Russian oil while making sure that there is still an appropriate supply of oil on world markets.” (https://www.state.gov/secretary-antony-j-blinken-on-cnn-state-of-the-union-with-jake-tapper/).

UPDATE:

March 04, 2022

  • Commerce Expands Entity List, including new Russian Parties: On Friday, the Commerce Department’s Bureau of Industry and Security (BIS) designated 91 new entities to the Entity List for their support of the Russian security services. The entities are located in Belize, Estonia, Kazakhstan, Latvia, Malta, Russia, Singapore, Slovakia, Spain, and United Kingdom. (https://public-inspection.federalregister.gov/2022-04925.pdf).

UPDATE:

March 03, 2022

  • Treasury Sanctions Russian Elites and their Property: On Thursday, the Treasury Department announced new blocking sanctions on three Russian elites, two of their spouses, three of their children, six of their companies, one plane and one superyacht. The Department also sanctioned 26 Russia and Ukraine-based individuals and seven entities in connection with the spread of disinformation. (https://home.treasury.gov/news/press-releases/jy0628).

o The Department also issued General License 15, which states that transactions with any entity owned 50 percent or more by Alisher Burhanovich Usmanov that is not explicitly listed on the Specially Designated Nationals (“SDN”) list are authorized.

  • State Department Sanctions Defense Firms, Suspends Travel for Oligarchs: The State Department has implemented the following sanctions:

o  Visa restrictions on 19 Russian oligarchs and 47 of their family members known to support destabilizing Russian foreign policy.These oligarchs can have the suspensions waived if they cease supporting destabilizing activity. More names may be added to the list. (https://www.state.gov/targeting-russian-elites-disinformation-outlets-and-defense-enterprises/).

o  Blocking Sanctions on 22 defense-related firms. (https://www.state.gov/targeting-russian-elites-and-defense-enterprises-of-russian-federation/).

  • Commerce Department Imposes Export Controls on Russian Refining Products: As the White House hinted yesterday, the Commerce Department Bureau of Industry & Security imposed new export controls on Russian oil refining products. The restrictions are as follows:

o  Expanding the scope of 15 C.F.R. Part 746 to impose and additional license requirement for exports, reexports, or transfers of any items listed in a new Supplement, Supplement No. 4 to part 746, to and from Russia. This rule removes the knowledge requirement from the prohibition.

o  Modifying the licensing review policy to be a presumption of denial, with a case-by-case policy for health and safety reasons.

o  Any item in transit to or within Russia on the day of the filing (today) that is impacted by the new export controls will be allowed to continue to its destination without any additional licensing. (https://public-inspection.federalregister.gov/2022-04912.pdf).  

  • Legislation Banning Russian Energy Imports Introduced: On Thursday, Senators Lisa Murkowski (R-AK) and Joe Manchin (D-WV) introduced bipartisan legislation that would ban energy imports from Russia. The bill would prohibit imports of crude oil, petroleum, petroleum products, LNG, and coal from Russia, and may be repealed by the President or Congress. The bill would exempt energy products in transit at the time of enactment. Representatives Brian Fitzpatrick (R-PA) and Josh Gottheimer (D-NJ) are introducing companion legislation in the House. (https://www.manchin.senate.gov/newsroom/press-releases/manchin-murkowski-lead-bipartisan-effort-to-ban-russia-energy-imports).

Speaker Supports Oil Ban: When asked about banning Russian oil imports in a Thursday press conference, Speaker of the House Nancy Pelosi (D-CA) said that she  was “all for that—ban it. Ban the oil coming from Russia.” (https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-03-03/card/pelosi-backs-effort-to-ban-russian-oil-imports-to-u-s–q9qIR0fvpDY6fYZnClSt).

UPDATE:

March 02, 2022

  • Commerce Department Imposes Sweeping New Export Controls Against Belarus for “Substantially Enabling Russia’s Invasion” of Ukraine.  The Department of Commerce will extend the new, sweeping export control policies put in place for Russia to Belarus, effective immediately. The full text of the regulation is available here.

  • White House Announces Additional Package of Sanctions and Export Controls Targeting Russia’s Defense and Energy Sectors. On Wednesday afternoon, the White House announced a new set of sanctions targeting additional sectors of Russia’s economy.  The planned measures are set forth here and include: 

Department of State to impose sanctions that target Russia’s defense sector. In total, 22 Russian defense-related entities will be designated, including firms that make combat aircraft, infantry fighting vehicles, electronic warfare systems, missiles, and unmanned aerial vehicles for Russia’s military.

Commerce Department to impose controls targeting Russia’s access to oil refining equipment and technology.   The Commerce Department will impose additional restrictions on items that would support Russia’s refining capacity through export controls on oil and gas extraction equipment.

Commerce Department to Designate Additional Russian and Belarussian Defense Sector Entities and their Supporters on Entity List.  The Commerce Department and interagency partners will add entities that have been involved in, contributed to, or otherwise supported the Russian and Belarusian security services, military and defense sectors, and/or military and defense research and development efforts to the U.S. Entity List.

United States to Close Airspace to Russian Aircraft.  As announced in President Biden’s State of the Union, the United States will close American airspace to all Russian flights. This includes aircraft certified, operated, registered or controlled by any person connected with Russia. This includes revoking all Russian airlines’ – both passenger and cargo – ability to operate to and from U.S. destinations, as well as refusing entry of any Russian-operated aircraft into U.S. airspace. (https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/02/fact-sheet-the-united-states-continues-to-impose-costs-on-russia-and-belarus-for-putins-war-of-choice/).

  • Treasury Issues New General Licenses and Guidance Regarding Financial Transactions and Energy Sector Payments.  On Wednesday night, the Treasury Department issued new licenses and FAQs related to Directive 4, which restricts transactions with the Russian Central Bank and other financial institutions.

o The General Licenses include:

–  General License 9A allows transactions incident and necessary to dealings in debt or equity with Vneshcombank, Otkritie, Sovcombank, Sberbank, VTB, and their affiliates, issued prior to February 24. The license extends through May 25, 2022. (https://home.treasury.gov/system/files/126/russia_gl9a.pdf).

–  General License 10A allows transactions incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern on February 24 with the entities listed in General License 9A, or any entity in which the designated entities owns 50% or more of. (https://home.treasury.gov/system/files/126/russia_gl10a.pdf).

–  General License 13 allows US persons to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, or certifications to the entities listed in Directive 4 for transactions incident to daily life in Russia. The license extends through June 24, 2022. (https://home.treasury.gov/system/files/126/russia_gl13.pdf).

–  General License 14 allows transactions with the entities listed in Directive 4 where the Directive 4 entity’s sole function in the transaction is to act as an operator of a clearing and settlement system. (https://home.treasury.gov/system/files/126/russia_gl14.pdf).

o  Guidance regarding energy sector payments.  The Treasury Department also published updated FAQs related to Directive 4. Notably, they explicitly address authorization for U-Turn transactions related to energy, or where payments related to energy are processed through non-sanctioned, third-country financial institutions, enabling the continuation of transactions that support the flow of energy to the market, and state that the 50% rule does not apply to Directive 4 entities. (https://home.treasury.gov/news/press-releases/jy0624).

UPDATE:

March 01, 2022

  • More U.S. Sanctions Expected: In a call with the Ministers of Finance for the G7 Countries, Treasury Secretary Janet Yellen reiterated her commitment to measures already taken, including sanctions, removal of Russian banks from SWIFT, and an international task force on sanctions enforcement. She added that the US looks forward to further cooperation with G7 partners, and is ready to “impose further financial pressure if necessary.” (https://home.treasury.gov/news/press-releases/jy0621).

  • Connecticut to Sell Russian Assets in State Pension Fund: In one of the first major moves from a state pension fund, Connecticut Treasurer Shawn Wooden announced Tuesday morning that the Connecticut state pension fund will sell its Russian securities, citing “moral reasons” for the move. The names and amounts of the securities are unknown, but Connecticut state funds held $218 million in Russian domiciled investment as of February 24. It is unclear how this announcement will interact with Russian statements banning foreign investors from selling Russian assets. (https://www.reuters.com/markets/europe/exclusive-connecticut-treasurer-orders-pension-funds-divest-russian-assets-2022-03-01/).

  • Congress Drafting Military Assistance Package, Negotiating on Further Sanctions: As Congress drafts a military and humanitarian assistance package, several Members of Congress called for more sanctions. Republicans like Senator Lindsey Graham (R-SC) have urged the administration to “declare war [on] Putin’s oil and gas industry” and Pat Toomey (R-PA) called for more secondary sanctions on foreign banks that do business with Russia, breaking from European consensus if necessary. (https://thehill.com/policy/international/596224-congress-races-clock-on-ukraine-aid-amid-invasion).

o Portman Calls for Termination of Normal Trade Relations with Russia: In addition to increased sanctions, including on oil and gas, asset seizure, and SWIFT restrictions, Senator Rob Portman (R-OH) called for an end to Russia’s Permanent Normal Trade Relations (“PNTR”) status. The move would functionally raise tariffs on Russia by imposing higher tariff rates. (https://www.cleveland.com/news/2022/03/sen-rob-portman-wants-to-end-russias-favored-trade-status-with-the-united-states-for-invading-ukraine.html).

UPDATE:

February 28, 2022

  • Treasury Sanctions Russian Central Bank: On Monday, the Treasury Department’s Office of Foreign Assets Control (“OFAC”) announced the following new sanctions:

Ban on Transactions with Central Bank: A prohibition on any transaction with the Russian Central Bank, the National Wealth Fund of Russia, or the Russian Ministry of Finance. This includes any transfer of assets or foreign exchange transaction with the entities.

License for Energy Transactions. The Department also released General License 8A, which authorizes transactions related to energy for VEB Bank, Otkritie, Sovcombank, VTB Bank, the Central Bank of Russia, and any of their subsidiaries, until June 24, 2022.

RDIF Sanctions: The Department designated the Russia Direct Investment Fund (“RDIF”), the Joint Stock Management Company of the Russia Direct Investment Fund (“JSC RDIF Limited Liability Company RVC Management Company (“LLC RVC”), and RDIF CEO Kirill Aleksandrovich Dmitriev on the Specially Designated Nationals and Blocked Persons (“SDN”) list.  (https://home.treasury.gov/news/press-releases/jy0612).

  • Rubio to Introduce Sanctions Legislation: In a Sunday evening tweet, Senator Marco Rubio (R-FL) stated that he would be introducing legislation to “sanction & issue a lifetime visa ban for any gov[ernmen]t official in Ukraine who collaborates with Russia to govern any part of the country.” Text of the legislation is not available.

UPDATE:

February 27, 2022

o SWIFT Restrictions: The EU will implement a regulation to remove sanctioned Russian banks from the SWIFT international payment network.

o Russian Central Bank Restrictions: The signatories of the February 26 statement are “collectively planning” to impose regulations that would prevent the Russian Central Bank from using its reserves to support the ruble. It remains unclear how restrictions on ruble transactions with the Russian Central Bank will be implemented.

o Task Force: The newly announced transatlantic task force will focus on seizing assets held by sanctioned individuals in their jurisdictions, emphasizing “we’ll go after their yachts, their luxury apartments, their money, and their ability to send their kids to fancy colleges in the West.” The task force will also work to restrict the sale of passports used to evade Russian sanctions.

  • Texas, Utah Restrict Russian Product Sales: Utah Governor Spencer J. Cox and Texas Governor Greg Abbott have issued requests to remove Russian products from shelves. Governor Cox’s executive order directed the Utah Department of Alcoholic Beverage Control to stop the sale of Russian and Russian-branded products immediately. Governor Abbott said he “asked the members of the Texas Restaurant Association, Texas Package Stores Association & all Texas retailers to voluntarily remove all Russian products from their shelves.” (https://www.businessinsider.com/texas-utah-greg-abbott-spencer-cox-governors-russian-products-2022-2).

UPDATE:

February 26, 2022

  • US Announces New Sanctions: In a joint statement released Saturday afternoon, the Biden administration, in coordination with several other nations, committed to implementing the following new measures in the coming days:

o Remove “selected” (unidentified) Russian banks from SWIFT.

o Implement “restrictive measures” on the Russian Central Bank that will prevent the Bank from deploying its international reserves in a manner that evades sanctions.

o Restrict “golden passports” that allow wealthy Russians to gain access to the US financial system.

o Establish a transatlantic risk force to identify and freeze assets of sanctioned individuals and companies present in the jurisdictions. (https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/26/joint-statement-on-further-restrictive-economic-measures/).

  • Potential Legislation for Russian Yacht Seizures: Representative Don Young (R-AK) announced via Twitter that he is drafting legislation to “seize any Russian yachts & commercial vessels currently in US waters.” Full text of the legislation is not available, but further tweets stated that the legislation “will permit the U.S. federal government to auction Russian vessels and all content inside, with proceeds going toward humanitarian aid efforts offered by NATO member states.”
  • Virginia Governor Investigates Financial Ties to Russia: Virginia Governor

    Glenn Youngkin issued a press statement on Saturday directing the Department of General Services to immediately review government procurement contracts to determine if Virginia tax dollars are being spent on items from Russian companies, and called on the Virginia Retirement System Board of Trustees and university endowment funds to divest in any and all holdings in Russian rubles or securities in Russian companies. (https://www.governor.virginia.gov/newsroom/news-releases/2022/february/name-929561-en.html).

UPDATE:

February 25, 2022

  • US Sanctions Putin, Lavrov, and Other Russian Officials: Today, the OFAC designated Russian President Putin, Foreign Minister Sergey Lavrov, Defense Minister Sergey Shoygu, and Deputy Defense Minister Valery Gerasimov as Specially Designated Nationals – meaning that these sanctions would affect these individuals, 50% or more entities, and other property in which they have interests, as well as potential impacts on their family members.  (https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220225_33).   

  • Sanctions Coming for RDIF: In a Friday tweet, White House Press Secretary Jen Psaki stated that the Treasury Secretary will be imposing “full blocking sanctions” on the Russian Direct Investment Fund (“RDIF”), a state owned financial entity that attracts capital into high growth sectors.

UPDATE:

February 24, 2022

  • New Sanctions on Russian Financial Institutions, State-Owned Entities, and Individuals with Ties to Putin: Today, the Department of the Treasury’s Office of Foreign Asset Control (“OFAC”) announced an array new round of sanctions on Russian financial institutions, state-owned entities, and individuals tied to Putin. (https://home.treasury.gov/news/press-releases/jy0608) These include:

o Cutting off Russia’s largest financial institution, Sberbank, from the US financial system through prohibitions on US correspondent banking and payable-through account relationships with US financial institutions;

o Comprehensive sanctions against Russia’s second largest financial institution, VTB, as well as Otkritie, Sovcombank, Novicombank, and 54 of their subsidiaries  designated by name, as well as any of their majority owned affiliates located around the world

o Additional Debt and Equity Restrictions Against Major State-Owned and Private Entities, including Alfa Bank, OJSC Russian Railways, Credit Bank of Moscow, Russian Agricultural Bank, Transneft and several othersFull comprehensive sanctions on additional Russian banks, including VTB Bank and 20 subsidiaries, Otkritie, Sovcombank, and Novikombank (which OFAC notes primarily operates in the Russian defense sector).

o New sanctions on Russian government officials and heads of state-owned enterprises.

o Sanctions Against Financial and Defense Sector of a Russian Ally (Belarus) For “Facilitating” the Invasion of Ukraine.  OFAC designated 24 Belarusian individuals and entities, focusing on the defense and financial sectors.

  • In addition to issuing these wide-ranging new sanctions, OFAC also issued a number of General Licenses.  Notably, these include:

o General License 2 (certain VEB transactions involving servicing of certain Russian sovereign debt through March 1, 2022)

o General License 3 (certain short term wind-down transactions during a 30 day through March 24, 2022)

o General License 8 ( certain ‘energy related transactions’ involving VEB, Otkritie, Sovcombank, Sberbank, and VTB through June 24, 2022)

o General License 9 (certain transactions involving certain debt or equity of VEB, Otkritie, Sovcombank, Sberbank and VTB through May 25, 2022)

o General License 10 (certain derivative contract transactions involving VTB, Sberbank, Sovcombank, and Otkirie through May 25, 2022)

o General License 11 (certain wind down transaction involving VTB, Otkritie, and Sovcombank through March 26, 2022)

o General License 12 (certain rejection, rather than blocking, of certain VTB, Otkritie and Sovcombank through March 26, 2022)

  • “Energy Related Transactions” for purposes of GL8 above means the extraction, production, refinement, liquefaction, gasification, regasification, conversion, enrichment, fabrication, transport, or purchase of petroleum, including crude oil, lease condensates, unfinished oils, natural gas liquids, petroleum products, natural gas, or other products capable of producing energy, such as coal, wood, or agricultural products used to manufacture biofuels, or uranium in any form, as well as the development, production, generation, transmission, or exchange of power, through any means, including nuclear, thermal, and renewable energy sources.

  • OFAC also issued additional conditional and time limited authorizations for a range of other transactions, including certain energy sector, food, medicine and medical device transactions.  Notably, OFAC emphasized that the wind-down general licenses were not issued for all designated banks. Moreover, caution is warranted in relying on any general license, as entities may be subject to multiple prohibitions, and the terms of the general license may authorize only certain aspects of a transaction. 

o    New licensing requirements to Russia for a broad array of commercial and dual-use items spanning a range of sectors, including microelectronics, telecommunications items, sensors, navigation equipment, avionics, marine equipment, and aircraft components.

o    New presumption of denial for all license applications for exports, reexports to, or transfers of items on the Commerce Control List.

o    Expanding the Military End Use and Military End User rules with regards to Russia to cover all items subject to the EAR except EAR99 food and medicine, and items classified as ECCN 5A992.c or 5D992.c, so long as they are not for Russian “government end users” or Russian state-owned enterprises.

o    Two new Foreign Direct Product Rules (similar to what was applied to Huawei, but much broader) targeting (1) Russia and (2) Russian Military End Users. Both would severely restrict the ability to export, re-export, or transfer (in country) items US origin software or technology (or US origin parts thereof). The latter will apply to 49 entities now added to the Entity List, and the Russian Ministry of Defense, including the Armed Forces of Russia (wherever located).

o    Significant limitations on the availability of license exceptions for Russia, including but not limited to certain conditional exceptions relating to: (i) certain software updates for civil end-users that are subsidiaries or joint ventures with companies headquartered in the United States or partner countries (License Exception TSU); (ii) certain common encryption controlled commodities, software and technology under License Exception ENC; and (iii) certain consumer communications devices (License Exception CCD) not for government end users or certain individuals associated with the government

February 23, 2022

  • White House Signals Further Anticipated Sanctions Against Inner Circle.  Tweet from President Biden on more sanctions on Russian Elites (February 22, 2022): “Starting tomorrow — and continuing in the days ahead — we will also be imposing sanctions on Russian elites and their family members. They share in the corrupt gains of the Kremlin’s policies and should share in the pain as well.”

Share this article: