U.S. Sanctions Against Russian Federation Persons and Entities

On April 15, 2021, U.S. President Joseph Biden issued an Executive Order Blocking Property with Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation (the “Order”), which authorizes sanctions against individuals and entities of the Russian Federation and declares a national emergency in response to specified harmful activities of the Russian government.  Pursuant to this Order, The Department of the Treasury’s Office of Foreign Asset Control (“OFAC”) issued Directive 1 (the “Directive”), which prohibits certain activities by U.S. financial institutions.

• Effective immediately, the Order authorizes the Secretary of Treasury, in consultation with the Attorney General and Secretary of State, to issue blocking sanctions against specific individuals and entities who operate in the technology or the defense and related materiel sectors of the Russian economy, or who are responsible for or have engaged in defined criminal activities and election interference on behalf of the Russian government. This Order is limited to those identified persons and entities and does not automatically block any other person or entity who participates in the Russian technology or defense related sectors. However, this Order should serve as notice that such persons and entities who participate in the Russian technology or defense related sectors have increased exposure to sanctions risk.
• Effective June 14, 2021, the Directive prohibits U.S. financial institutions, as well as their holding companies, U.S. affiliates and U.S. subsidiaries and any foreign financial institutions located in the U.S. from participating in the primary market for ruble or non-ruble denominated blocks, or lending ruble or non-ruble denominated funds to the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation, or engaging in any transaction or conspiracy to violate this Directive. All other activities with these entities or involving their property or property interests are permitted unless blocked by any other OFAC sanctions program.

For further questions regarding this Order, Directive or other OFAC sanctions program matters, please contact John P. Kanan (313.465.7438), Angela I. Gamalski (313.465.7304) or your regular Honigman attorney.