Evolving Russian Sanctions

On February 24, the Office of Foreign Assets Control (OFAC) issued a multitude of directives under Executive Order 14024 aimed at sanctioning the Russian Federation’s hostility toward Ukraine. Please see below for further details regarding affected entities, newly imposed restrictions, and implementation dates.

Sanctioned Persons and Entities:  OFAC has added over 100 names to the Specially Designated Nationals (SDN) list in the past week.  The OFAC SDN list has been expanded to include numerous Russian oligarchs and their family members as well as many of the major Russian financial institutions.  These OFAC sanctions have significant implications for both the designated individuals and individuals transacting with them.  All property interests of any SDN in the United States are blocked.  In addition, all U.S. persons are prohibited from transacting with any SDN in any way or any entity in which one of the listed persons or entities above owns a 50 percent or greater interest. 

Export Restrictions: Effective immediately, the Bureau of Industry and Security (BIS) implemented new export controls designed to hinder Russia’s access to technologies related to defense, maritime, and aerospace capabilities. BIS now requires licenses for exports to Russia of items and technologies in Categories 3-9 of the Commerce Control List (CCL).  Affected items and technologies include microelectronics, telecommunications items, sensors, navigation equipment, marine equipment, and aircraft parts that were not previously controlled for export to Russia. The BIS will review requests for licenses to export to Russia under a policy of presumed denial.  Restrictions on Russian military end users are also greatly expanded, as all items in the Export Administration Regulations (EAR) are now subject to restrictions, with select exceptions including for EAR99 food and medicine.

Financial Institutions: As of March 26, 2022, US financial institutions are prohibited from opening or maintaining correspondent accounts or payable-through accounts, transacting in new debt, or processing any transactions involving sanctioned financial institutions targeted under these sanctions.

Ukraine: Effective immediately, the Ukrainian territories recognized as independent nations by Russia earlier this week, known as Donetsk People's Region (DPR) and Luhansk People's Region (LPR), have been completely sanctioned.  The set of sanctions collectively imposed on the DPR and LPR are identical to those established for the Crimea region.

Belarus: Effective immediately, new sanctions against Belarus have been imposed including sanctions on Belarusian individuals and entities for support of the Russian invasion. Affected entities include two large state-owned banks and companies closely tied to the Belarusian military-industrial complex.

The situation is evolving constantly, and regulations are subject to change.  For concerns regarding your company’s exposure, please contact any of your Honigman relationship attorneys.