The EU and UK have imposed further sanctions in response to the invasion of Ukraine and the recognition by Russia of the Donetsk and Luhansk People’s Republics (DNR and LNR) of Ukraine as independent territories.
On February 24, 2022, in response to Russia’s attack on Ukraine, President Biden announced further sanctions on Russian individuals and entities. These measures are in addition to those already announced on February 22 and 23 and are primarily targeted at Russia’s financial sector.
These sanctions are part of a global, coordinated effort to maximize consequences for Russia’s actions and show solidarity for Ukraine’s sovereignty. Global partners, including the UK, EU, Canada, Australia and Japan, have also issued sanctions.
Measures were taken both by the Office of Foreign Asset Control (OFAC) and the Bureau of Industry and Security (BIS). The below contains a summary of recent OFAC sanctions action. We published a separate alert detailing recent amendments to the US Export Administration Regulations (EAR).
On February 24, 2022, the U.S. Government issued a number of sanctions measures in response to Russia’s attack on Ukraine. These measures include sweeping financial sanctions and stringent export controls, which will have broad impacts on companies and individuals doing business in Russia, Ukraine and Belarus. Today’s announcement came alongside additional measures coordinated with U.S. allies, including the United Kingdom, European Union, Canada and Japan.
A brief overview of today’s U.S. measures is provided below. In following blogs, we will provide more focused looks at (a) U.S. sanctions; and (b) sanctions and export controls issued by a number of other key economies around the world.
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.
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.
On January 24, 2022, the U.S. Department of Homeland Security (DHS) on behalf of the Forced Labor Enforcement Task Force (FLETF) issued a Notice Seeking Public Comments on Methods to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China, especially in the Xinjiang Uyghur Autonomous Region, into the United States (RFC). The notice is available here. Comments are due by March 10, 2022.
From February 21, 2022, the format of the UK Sanctions List and the UK Office of Financial Sanctions Implementation (OFSI) consolidated list will be different. Businesses must take steps to ensure their systems and processes are configured correctly for the new formatting. In particular, a number of data fields are being updated and seven new fields are being introduced to the OFSI consolidated list.
On December 8, 2021 the EU Commission published its proposal for a new “Anti-Coercion Instrument.” The regulation is being proposed in response to targeted deliberate economic pressures applied to the EU and its Member States in recent years and seeks to deter countries from restricting or threatening to restrict trade or investment to force the EU (or individual Member States) to change their policies in areas such as climate change, taxation and food safety.
On October 21, 2021, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) announced an interim final rule (Interim Rule), which will amend the Export Administration Regulations (EAR) to add controls for the export, reexport and transfer of certain cybersecurity exploitation, intrusion and monitoring tools. The Interim Rule also creates a new License Exception “Authorized Cybersecurity Exports (ACE)” that authorizes certain exports, reexports and transfers of cybersecurity items, as described in more detail below. The Interim Rule will be made effective 90 days after publication, on January 19, 2022.
On September 14, 2021, the Kingdom of Saudi Arabia’s (KSA’ s) Cabinet of Ministers launched a new Permanent Ministerial Committee for Examining Foreign Investments (CEFI) that would review foreign investments for potential national security threats. This development comes at an important time as the Kingdom opens its doors for foreign investments in pursuit of the Vision 2030 plan. The Ministry of Investment recently reported that foreign investment licenses in the KSA rose 108% in the first half of 2021 in comparison the preceding year. The committee is expected to function in a manner similar to the Committee on Foreign Investment in the United States (CFIUS), and the proposed UK National Security and Investment Bill, although its future role and implementation remain to be determined.
