Articles Posted in Russia Sanctions

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On February 22 and 23, 2022, President Biden announced further sanctions in response to Russia’s invasion of Ukraine. These sanctions build upon the U.S. sanctions issued on February 21, 2022. Specifically, the additional sanctions include (a) blocking two Russian financial institutions and their subsidiaries, as well as five Russian individuals associated with the Putin regime; (b) expanded sanctions targeting Russian sovereign debt and persons who support such transactions; and (c) sanctions on Nord Stream AG and its CEO.

The United Kingdom, European Union, Canada, Australia, and Japan have also issued or announced sanctions in response to Russia’s invasion.  Further sanctions are likely if the situation in Ukraine continues to escalate.

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In response to President Putin’s televised recognition of Donetsk and Luhansk People’s Republics (“DNR” and “LNR”) of Ukraine as “independent” nations, and reports of Russian troops being ordered into Ukrainian territory, the United States has imposed Crimea-style comprehensive sanctions on the DNR and LNR prohibiting new U.S. investment as well as imports and exports to and from the regions. The EU and the UK have sanctioned banks and oligarchs, and Germany has suspended certifications on the NordStream2 pipeline project.

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On April 26, 2021, the UK announced a new global anti-corruption sanctions regime and has imposed sanctions on 22 people whom the UK Government has reasonable grounds to suspect have been involved in serious corruption. Under the new Global Anti-Corruption Sanctions Regulations 2021 (SI 2021/488), those designated will be subject to an asset freeze and travel ban.

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American and Russian flag pair on cracked wall. Horizontal On April 15, 2021, the U.S. Government announced broad new sanctions authorities that can be used to target Russia and implemented limitations on dealings in Russian sovereign debt. These measures were imposed pursuant to a newly issued Executive Order in response to Russia’s alleged election inference, the SolarWinds cyberattack, and Russia’s ongoing occupation of the Crimea region of Ukraine.

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On July 23, 2020, the U.S. Senate passed its version of the National Defense Authorization Act for fiscal year 2021 (NDAA) which includes an amendment that expands sanctions in connection with the Nord Stream 2 and TurkStream pipeline projects.  The amendment is based on a bill previously introduced by Senators Ted Cruz (R-TX) and Jeanne Shaheen (D-NH) entitled, the “Protecting Europe’s Energy Security Clarification Act of 2020”, which sought to clarify and expand existing U.S. sanctions under the Protecting Europe’s Energy Security Act of 2019.

Last year, the Protecting Europe’s Energy Security Act of 2019, enacted as part of the National Defense Authorization Act (NDAA) of 2020, implemented sanctions targeted at Allseas, the Swiss-Dutch company that had been laying the Nord Stream 2 pipeline.  Shortly after the NDAA was enacted in December 2019, the company suspended its activities, leaving six percent or around 100 miles (160 km) of pipeline to be completed.  Reports indicate that Russia has taken steps to continue construction of the pipeline, prompting Members of Congress to take further action.  The House passed its version of the FY 2021 NDAA with a similar amendment introduced by Rep. Ruben Gallego (D-AZ) on July 21.

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On December 31, 2019, the U.S. District Court for the Northern District of Texas overturned a $2 million fine imposed by the Department of the Treasury’s Office of Foreign Assets Control (OFAC) against ExxonMobil Corp., and its U.S. subsidiaries ExxonMobil Development Company and ExxonMobil Oil Corp. (collectively, “Exxon”). This marked a rare court decision overturning an OFAC sanctions penalty. The Court’s decision focused not on the subject of the sanctions but addressed whether OFAC had provided proper notice of its sanctions requirements.

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On August 8, 2018, the State Department announced that it had concluded that Russia was responsible for poisoning former double agent Sergei Skripal and his daughter Yulia using the nerve agent Novichok and that it had sent a report to Congress pursuant to the Chemical and Biological Warfare Weapons Elimination Act of 1991.

The statute requires the President to report to Congress when there has been a determination that another country has used chemicals weapons. Thereafter, the statute requires the President to impose a number of sanctions relating to (i) foreign assistance, (ii) arms sales, (iii) arms sales financing, (iv) denial of U.S. credit assistance (e.g., Export-Import Bank loans) and (v) a prohibition on exports of any controlled goods.

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  • The Treasury Department has placed several prominent Russian individuals and companies on the Specially Designated Nationals and Blocked Persons lists (SDN list). Several of these parties are Russian billionaires previously identified in the Treasury Department’s so-called “Oligarch List” reported to Congress on January 29, 2018. 
  • Under the general licenses issued with the new listings, U.S. persons have until June 5, 2018 to wind down operations with specified listed companies and their subsidiaries, and until May 7, 2018 to divest debt, equity, or holdings owned by EN+ Group PLC, GAZ Group and United Company RUSAL PLC. 
  • General License 12, which allows wind down operations with several newly designated SDN companies, instructs that payments to the SDNs must be made into blocked accounts with U.S. banks. This deviates from previous general licenses which did not place conditions on how SDNs must be paid. 

On April 6, 2018, the Treasury Department’s Office of Foreign Assets Control (OFAC), in consultation with the State Department, designated 7 Russian oligarchs, 12 companies that they own or control, 17 senior Russian government officials, and 1 state-owned Russian weapons trading company and its subsidiary, a Russian bank. (The list may be found here.)

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This week, the U.S. government took several steps to implement sections of the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA), with implications for Russia-related sanctions and their enforcement. On October 27, 2017, the Department of State (DoS) published guidance on sanctions with respect to Russia’s Defense and Intelligence Sectors under Section 231 of CAATSA. In addition, on October 31, 2017, DoS published guidance on how it would view secondary sanctions for investments in special Russian crude oil projects and energy export pipelines. Separately, the Department of Treasury’s Office of Foreign Assets Control (OFAC) amended Directive 4 of the Ukraine/Russia related sanctions and published updated FAQs relating to the amended Directive as well as new guidance on CAATSA sections 223(a), 226, 228, 233.

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On August 2, 2017, President Trump signed into law the Countering America’s Adversaries Through Sanctions Act (CAATSA), which strengthened U.S. sanctions on Russia, North Korea and Iran. CAATSA had been passed by overwhelming “veto-proof” majorities of Congress and President Trump signed the bill while expressing reservations concerning the limitations it placed on the President’s authority.

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