Note:

This update includes the U.S. Department of the Treasury’s Office of Foreign Assets Control’s (OFAC) recent actions regarding the Russian seaborne oil price cap policy aimed at maintaining the supply of Russian oil to the global market while reducing the Russian Federation’s revenues from oil sales. It also includes updates to OFAC’s designations of Russian and Belarussian persons and the Department of the State designations added to OFAC’s List of Specially Designated Nationals and Blocked Person (SDN List).

The ban on certain services related to the maritime transport of Russian-origin crude oil above the $60 per barrel price cap, which is discussed in detail below in a new section V, is the first in what is expected to be a series of bans based on price caps that OFAC expects to issue concerning Russian origin oil and petroleum products. The next anticipated ban will focus on petroleum products and is scheduled to take effect on Feb. 5, 2023, as further discussed in section V below. Imports of Russian oil and petroleum products into the United States remain prohibited.

The recent OFAC SDN designations include influential Russian oligarch Vladimir Potanin and 29 Russian heads of regions and governors who are assisting in the mobilization orders for Russian citizens, as well as 18 additional entities related to Russia’s financial sector and 17 more subsidiaries of VTB Bank. The Dec. 22 Department of the State designations are four entities that are operating or have operated in the marine sector of the Russian Federation economy, and six entities operating in both the defense and related materiel sector and the marine sector of the Russian Federation economy.

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In response to the Russian Federation’s (Russia’s) egregious and unprovoked invasion of Ukraine that began in February 2022, the U.S. government has deployed a whole-of-government approach in imposing sanctions and export control restrictions on Russia. This Alert summarizes key economic sanctions imposed by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC). It is not intended to be and is not a comprehensive summary of the economic sanctions implemented as a result of the invasion of Ukraine. Rather, this Alert is a tool to help companies, both U.S. and foreign, identify whether their business with Russia or Ukraine is now prohibited due to the wide-ranging economic sanctions, including import prohibitions, export prohibitions, and the designations of hundreds of individuals and entities as sanctioned or blocked persons.

The OFAC economic sanctions are generally complementary to the export controls imposed on Russia and Belarus by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) in the Export Administration Regulations (EAR). The EAR governs the export, reexport and transfers (in-country) of most items exported from the United States, U.S.-origin items wherever located, as well as certain foreign-produced goods. For any transaction involving Russia, Ukraine or Belarus, it is important to review both OFAC sanctions and the EAR conduct sanctioned person screening to determine whether a contemplated transaction is authorized. A summary of the current state of BIS export controls implemented in response to the Russian Federation’s invasion of Ukraine can be found here.

This summary covers the following topics:

I. Overview of OFAC Economic Sanctions Regulations Relating to Russia

A. Ukraine-/Russia-related Sanctions Regulations
B. Russian Harmful Foreign Activities Sanctions

II. OFAC Restrictions on Doing Business in Ukraine

Imposition of embargo on Donetsk and Luhansk People’s Republic Regions of Ukraine

III. Import Restrictions on Goods from Russia or That Are of Russian Origin

A. Import Ban on Crude Oil, Petroleum and Related Energy Products
B. Import Ban on Items from Key Sectors (for example, seafood, alcohol and nonindustrial diamonds)
C. Import Ban on Gold

IV. Restrictions on the Export of Services to Russia

Export ban on accounting services, trust and corporate formation services, quantum computing, and management consulting services

V. Restrictions Regarding Maritime Services in Connection with Russian Crude Oil and Petroleum Products

Summary of new and anticipated restrictions on provision of certain services related to maritime transport of Russian-origin crude oil and petroleum products
A. Services Related to Crude Oil Transport
B. Services Related to Petroleum Products Transport

VI. Restrictions Regarding Financial Institutions, Financial Transactions and Related Transactions with Russia

A. Investment Prohibition
B. Prohibition Relating to U.S.-denominated Banknotes
C. New Debt and Equity Restrictions
D. Designations of Financial Institutions, and Executives and Board Members of Financial Institutions as Specially Designated Nationals (SDNs)

VII. Further Specially Designated National and Blocked Person Designations

Additional SDNs designations, including oligarchs, Russian elites, TV stations and key industry entities

I. Overview of OFAC Economic Sanctions Relating to Russia

The economic sanctions relating to the Russian invasion of Ukraine are being implemented through two programs: the Ukraine-/Russia-related Sanctions program and the Russian Harmful Foreign Activities Sanctions program. OFAC also maintains sanctions against Russia under the Magnitsky Sanctions program and the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA), but these programs have not been deployed in response to the 2022 invasion.

As a general rule, OFAC’s economic sanctions against Russia apply to U.S. citizens (wherever located); U.S. permanent residents (“green card” holders) (wherever located); entities formed in the United States, including their foreign branches; and anyone (including entities) located in or otherwise subject to the jurisdiction of the United States (regardless of citizenship).

A. Ukraine-/Russia-related Sanctions

The Ukraine-/Russia-related sanctions include the sanctions that were implemented in March 2014 in response to Executive Order (EO) 13660, which declared a national emergency to deal with the threat posed by Russia to the security, stability and sovereignty of Ukraine, including the annexation of the Crimea region by Russia. In addition to the restrictions set forth in EO 13660, the Ukraine Sanctions implement the restrictions set forth in three subsequent 2014 EOs: EO 13661 (March 16, 2014), EO 13662 (March 20, 2014) and EO 13685 (Dec. 19, 2014). As discussed in part II below, this program also includes the first EO addressing the 2022 invasion (EO 14065), as well as the Ukraine-/Russia-related Sanctions Regulations, which are codified at 31 C.F.R. Part 589, and approximately 25 general licenses have been issued authorizing certain transactions that would be prohibited under these sanctions (more than half of which have expired), as well as numerous FAQs and other guidance.

Select provisions of the Ukraine Sanctions are outlined in part II below. For more information on the Ukraine-/Russia-related Sanctions, see the OFAC page on the Ukraine-/Russia-related Sanctions, Amendment to the Ukraine-related Sanctions Regulations and Associated Administrative List Updates, and OFAC’s FAQs on the Ukraine Sanctions.

B. Russian Harmful Foreign Activities Sanctions

The Russian Harmful Foreign Activities Sanctions program began in 2021 with the issuance of EO 14024, and the Russian Harmful Foreign Activities Sanctions Regulations (RuHSR) were issued in May 2022. The RuHSR, which are codified at 31 CFR Part 587, implement the restrictions set forth in EO 14024 and will incorporate any subsequent legal prohibitions or restrictions in EOs issued pursuant to the national emergency in EO 14024. In EO 14024, the president declared an unusual and extraordinary threat to the national security, foreign policy and economy of the United States due to the Russian government’s efforts to undermine the democracy of the United States and its allies and partners, Russia’s “malicious cyber-enabled activities against the United States and its allies and partners” and Russia’s violations of “well-established principles of international law.” To supplement the RuHSR, OFAC issued four directives in 2022 that set forth additional restrictions regarding financial transactions relating to Russia (see part V below). Under this program, OFAC also issued three additional EO in 2022 (discussed in parts III and VI below), as well as numerous general licenses, FAQs and other guidance. As of Jan. 9, there were 31 active general licenses under the Russian Harmful Foreign Activities Sanctions program, including authorizations for agricultural commodities and medicine , telecommunications, activities by nongovernmental organizations, overflight payments, emergency landings and air ambulance services, certain emergency vessel repairs or salvage operations, civil aviation safety, transactions related to certain agricultural equipment, certain transactions involving Russia’s Federal Security Service, certain energy transactions related to the importation of Russian crude oil into Bulgaria, Croatia and certain landlocked EU member states, and other support to people impacted by Russia’s further invasion of Ukraine.

Select provisions of the Russian Harmful Foreign Activities Sanctions program are outlined below. For more information on the Russian Harmful Foreign Activities Sanctions program, see OFAC’s Russian Harmful Foreign Activities Sanctions page and OFAC’s Russian Harmful Foreign Activities Sanctions FAQ page.

II. OFAC Restrictions on Doing Business in Ukraine

As a result of the February 2022 invasion of Ukraine and Russia gaining control of the Donetsk and Luhansk People’s Republic Regions of Ukraine (DNR and LNR regions, respectively), the United States imposed an embargo on the DNR and LNR regions. Specifically, on Monday, Feb. 21, 2022, President Biden issued an EO prohibiting “United States persons” from engaging in new investment in the DNR and LNR regions, as well as engaging in trade, including export, import, reexport, sale or supply, of goods, services or technology with the DNR and LNR regions. The embargo on the DNR and LNR regions is the same as the U.S. embargo on the Crimea region of Ukraine.

As a result, all U.S.-origin items (other than food and medicine designated as EAR99 and certain software and Internet-based personal communications) require a license to go to the DNR or LNR region. Also, U.S. persons, wherever located, are prohibited from approving, financing, facilitating or guaranteeing transactions by foreign persons that cannot be performed by U.S. persons as a result of the EO. Licenses from both BIS and OFAC may be needed for any export, reexport or transfer (in-country), and related transactions involving the LNR or DNR regions.

OFAC issued eight general licenses to EO 14065 (18 to 25) authorizing certain transactions with the DNR region and LNR region, mainly for humanitarian reasons, that would have otherwise been prohibited under the Ukraine Sanctions. For example, General License 18 authorizes “exportation or reexportation of agricultural commodities, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices,” as well as “the prevention, diagnosis, or treatment of COVID-19.” General License 20 authorizes transactions “for the conduct of the official business of certain international organizations and entities.” General License 23 authorizes transactions that related to “the support of nongovernmental organizations’ activities in the Covered Regions, including activities related to humanitarian projects to meet basic human needs, democracy building, education, noncommercial developments projects, and environmental and natural resource protection.”

For further information, see Feb. 21, 2022 Issuance of Executive Order Blocking Property Of Certain Persons And Prohibiting Certain Transactions With Respect To Continued Russian Efforts To Undermine The Sovereignty And Territorial Integrity Of Ukraine, Issuance of Ukraine-related General Licenses, White House Fact Sheet, FAQ 1007, and Feb. 21 BakerHostetler Alert.

III. Import Restrictions on Goods from Russia or That Are of Russian Origin

A number of import restrictions have been imposed on goods from the Russian Federation or goods that are of Russian origin. These restrictions include an import ban on crude oil, petroleum, energy products and gold, as well as a ban on certain items from key Russian sectors.

A. Import Ban on Crude Oil, Petroleum and Related Energy Products

As of March 8, 2022, pursuant to EO 14066, imports into the United States of Russian Federation-origin crude oil; petroleum; petroleum fuels, oils and products of their distillation; liquefied natural gas; coal; and coal products are prohibited.

B. Import Ban on Items from Key Sectors

As of March 11, 2022, pursuant to EO 14068, imports of Russian Federation-origin goods from several notable sectors of the Russian economy, including fish, seafood and preparations; alcoholic beverages; and nonindustrial diamonds, are prohibited. Goods of Russian Federation origin include goods produced, manufactured, extracted or processed in the Russian Federation that have not been incorporated or substantially transformed into a foreign-made product.

Based on FAQs 1016 and 1024, the import bans do not extend to U.S. persons engaging in transactions to sell or redirect shipments of goods covered by the import ban outside the United States that were previously destined for the United States.

OFAC has not issued clear guidance on how theories of incorporation or substantial transformation may impact the ban for goods of Russian Federation origin. Country of origin determinations are the purview of U.S. Customs and Border Protection (U.S. Customs) regulations and guidelines and may offer some guidance for the purposes of OFAC’s ban on Russian Federation-origin goods.

For more information on the crude oil and energy products import ban, see OFAC Press Release, OFAC FAQs, and the BakerHostetler Client Alert. For more information on the notable sector import ban, see the BakerHostetler Alert and OFAC FAQs.

C. Import Ban on Gold

As of June 28, 2022, pursuant to a determination issued under EO 14068, imports of newly mined or refined gold of Russian origin are prohibited, unless licensed or otherwise authorized by OFAC. The determination excluded gold of Russian origin that was located outside of the Russian Federation prior to the effective date.

IV. Restrictions Imposed on the Export of Services to Russia

On May 8, pursuant to EO 14071, OFAC issued a determination that prohibited the export of certain professional services to Russia. The scope of the prohibition covers accounting, trust and corporate formation, and management consulting services, and the prohibitions took effect on June 7, 2022.

On Sept. 15, pursuant to EO 14071, OFAC issued another determination prohibiting the provision of professional services related to quantum computing. OFAC has broadly defined the scope of all concerned services as follows:

• “Accounting services” – includes “services related to the measurement, processing, and transfer of financial data about economic entities.”
• “Trust and corporate formation services” – includes “services related to assisting persons in forming or structuring legal persons, such as trusts and corporations; acting or arranging for other persons to act as directors, secretaries, administrative trustees, trust fiduciaries, registered agents, or nominee shareholders of legal persons; providing a registered office, business address, correspondence address, or administrative address for legal persons; and providing administrative services for trusts.”
• “Management consulting services” – includes “services related to strategic advice; organizational and systems planning, evaluation, and selection; marketing objectives and policies; mergers, acquisitions, and organizational structure; staff augmentation and human resources policies and practices; and brand management.”
• “Quantum computing” – includes “any of the following services when related to quantum computing, quantum computers, electronic assemblies thereof, or cryogenic refrigeration systems related to quantum computing: infrastructure, web hosting, or data processing services; custom computer programming services; computer systems integration design services; computer systems and data processing facilities management services; computing infrastructure, data processing services, web hosting services, and related services; repairing computer, computer peripherals, or communication equipment; other computer-related services; as well as services related to the exportation, reexportation, sale, or supply, directly or indirectly, of quantum computing, quantum computers, electronic assemblies thereof, or cryogenic refrigeration systems related to quantum computing to any person located in the Russian Federation.”

OFAC has provided additional guidance on the prohibition of services in numerous FAQs for each category: accounting, corporate, management and quantum computing. These prohibitions will not apply to services provided to entities in Russia that are owned or controlled by a U.S. person or to services provided in connection with the winding down or divestiture of an entity located in Russia that is not owned or controlled by a Russian person.

V. Restrictions Regarding Maritime Services in Connection with Russian Crude Oil and Petroleum Products

A. Services Related to Crude Oil Transport

On Nov. 21, 2022, OFAC issued a determination pursuant to EO 14071 restricting maritime services in connection with the maritime transport of Russian crude oil — the “Prohibitions on Certain Services as They Relate to the Maritime Transport of Crude Oil of Russian Federation Origin.” A second determination was issued on Dec. 5 (“Price Cap on Crude Oil of Russian Federation Origin”), implementing the $60 per barrel price cap agreed to by allied and participating nations, including the United States, the 27 Member States of the European Union and the members of the G-7. Under the determinations, U.S. persons are prohibited from providing a wide range of services, including trading/commodities brokering, financing, shipping, insurance (including reinsurance and protection and indemnity), flagging, or rendering customs brokering services (Covered Services) related to the maritime transport of Russian crude oil that is priced above the $60 price cap (hereinafter “crude oil determination”). The ban on Covered Services does not apply to services related to maritime transport of Russian crude oil priced at or below the price cap. The price cap excludes the cost of shipping, freight, customs and insurance, provided they are invoiced separately at commercially reasonable rates. There are also certain de minimis exceptions, and the price cap does not apply when crude oil is substantially transformed (when a product loses its identify and is transformed into a new product with a change in name, character and use) in a jurisdiction other than Russia or has cleared another jurisdiction’s customs for onshore sale. However, OFAC does not consider certain blending activities to be substantial transformation.

In addition, in some instances, the price cap will apply beyond the first point of sale. The instances are:

• If the Russian crude oil is imported into a country other than Russia, has cleared customs and is then exported back to Russia via maritime transport without undergoing a substantial transformation, the price cap still applies.
• If the Russian crude oil is sold at sea, the price cap will still apply to the sale and transfer until it clears customs into a jurisdiction other than Russia.

With respect to Covered Services, on Nov. 22, 2022, OFAC published its “OFAC Guidance on Implementation of the Price Cap Policy for Crude Oil of Russian Federation Origin” (November Guidance) with further details on the scope of Covered Services, including definitions of key terms, as follows:

• Trading/Commodities brokering: Buying, selling or trading commodities and/or brokering the sale, purchase, or trade of commodities on behalf of other buyers or sellers.
• Financing: A commitment for the provision or disbursement of any debt, equity, funds or economic resources, including grants, loans, guarantees, suretyships, bonds, letters of credit, supplier credits, buyer credits, and import or export advances. For the purposes of the determination, the term “financing” does not include the processing or clearing of payments by intermediary banks. [Note: this exclusion is subject to certain conditions as further provided in the Guidance.]
• Shipping: Owning or operating a ship for the purposes of carrying or delivering cargo and/or freight transportation, chartering or sub-chartering ships to deliver cargo or transport freight, brokering between shipowners and charterers, and serving as a shipping/vessel agent.
• Insurance: The provision of insurance, reinsurance, or protection and indemnity (P&I) services; satisfying claims related to underwriting insurance policies that protect policyholders against losses that may occur as a result of property damage or liability; assuming all or part of the risk associated with existing insurance policies originally underwritten by other insurance carriers, including the reinsurance of a non-U.S. insurance carrier by a U.S. person; and liability insurance for maritime liability risk associated with the operations of a vessel, including cargo, hull, vessel, P&I and charterer’s liability.
• Flagging: Registering or maintaining the registration of a vessel with a country’s national registry of vessels. This definition does not include the deflagging of vessels transporting Russian oil sold above the price cap
• Customs brokering: Assisting importers and exporters in meeting requirements governing imports and exports. This definition does not include legal services or assisting importers and exporters in meeting the requirements of U.S. sanctions.

Per the November Guidance, Covered Services do not include medical evacuation or other emergency services for crew members, health, travel or liability insurance for crew members, or classification, inspection, bunkering and pilotage.

The November Guidance has also implemented a safe harbor from OFAC enforcement for participating service providers based on their involvement in maritime service; the safe harbor groups participating service providers into “Tiers” — Tier 1, Tier 2 and Tier 3. All tiered actors are required to maintain records for a period of five years and have specific due diligence requirements as follows:

• Tier 1 actors are those who regularly have direct access to price information, for example, commodity brokers and oil traders. To receive safe harbor protection, these actors are required to maintain documentation that the purchase price of the Russian crude oil was at or below the $60 price cap.
• Tier 2 actors are financial institutions, ship/vessel agents, customs brokers, etc., that sometimes are able to request and receive price information from customers. To the extent practical, these actors must request and retain documents demonstrating the Russian crude oil was purchased at or below $60. If not practical to obtain price information, these actors must obtain and retain signed attestations from the customers regarding the purchase price.
• Tier 3 actors are those who do not regularly have access to price information in the ordinary course of business, and include insurers, P&I clubs, shipowners and flagging registries. These actors can be afforded safe harbor protections by obtaining customer attestations, which can be accomplished by utilizing preexisting or revised sanctions exclusion clauses.

OFAC has noted it does not intend to pursue penalties against U.S. service providers that reasonably relied on documentation or attestations, provided there are no red flags that suggest evasion of the sanctions. If the U.S. service provider knew or had reason to believe the crude oil was or was potentially purchased above the price cap, then the safe harbor protections will not protect the U.S. service provider.

For more information on the Covered Services ban and related compliance and licensing matters, see the OFAC’s Nov. 21 determination, OFAC’s November Guidance, OFAC’s Dec. 5 determination, OFAC Press Release, OFAC Recent Actions webpage and OFAC FAQs.

B. Services Related to Petroleum Products Transport

On Dec. 30, OFAC issued Preliminary Guidance regarding the anticipated extension of the ban on Covered Services to services related to the maritime transport of Russian-origin petroleum products (hereinafter, the petroleum products determination). OFAC has signaled its intention to issue a determination pursuant to EO 14071 to implement the ban on petroleum products and publish combined final guidance regarding implementation of both the crude oil determination and the petroleum products determination prior to Feb. 5, 2023, which is the expected date of implementation of the petroleum products determination — that is, the ban on Covered Services to the maritime transport of Russian-origin petroleum products.

The Preliminary Guidance states that OFAC will define petroleum products as “articles defined at Harmonized Tariff Schedule of the United States heading 2710.” In other respects, OFAC’s approach to extension of the ban on Covered Services to those related to maritime transport of Russian-origin petroleum products is expected to be similar to the approach laid out in the November Guidance discussed in section V.A. above. Among other things, certain blending operations will not be considered as “substantial transformation” of petroleum products for the purposes of the ban. OFAC further stated that it will also be taking a de minimis approach to determining the origin of petroleum products. Thus, for instance, a petroleum product that may contain an unpumpable quantity of Russian-origin product that cannot be removed from a container will not be considered Russian origin.

VI. Restrictions Regarding Financial Institutions, Financial Transactions and Related Transactions

Numerous restrictions have been implemented regarding transactions with financial institutions in Russia as well as prohibitions regarding financial transactions with entities in Russia, including those for the benefit of certain sectors of the Russian economy. These restrictions include:

A. Investment Prohibition

As of April 6, 2022, pursuant to EO 14071, U.S. persons, wherever located, are prohibited from making any new investment in the Russian Federation. While investment was not defined in EO 14071, based upon prior OFAC guidance, new investment includes any commitment or contribution of funds or other assets for, or “any transfer or extension of funds or credit on the basis of an obligation to repay, or any assumption or guarantee of the obligation of another to repay an extension of funds or credit, including overdrafts, currency swaps, purchases of debt securities, purchases of a loan made by another person, sales of financial assets subject to an agreement to repurchase, renewals or refinancing whereby funds or credits are transferred or extended to a borrower or recipient described in the provision, the issuance of standby letters of credit, and drawdowns on existing lines of credit.”

Initially, the investment ban was limited to new investment in the energy sector, but as of April 6, it was expanded to prohibit new investment into any sector of Russia.

For more information see Background Press Call by Senior Administration Officials on New Economic Costs on Russia.

B. U.S. Denominated Banknotes

Effective March 11, the export and reexport of U.S. dollar-denominated banknotes to the Russian government or any person located in Russia is prohibited. Pursuant to General License 18, certain noncommercial personal remittances are authorized, including withdrawals of U.S. dollar-denominated banknotes via automated teller machines and the hand-carrying of U.S. dollar-denominated banknotes. For further information, see also OFAC FAQ re Dollar-Denominated Banknotes.

C. New Debt and Equity Restrictions

As discussed below, effective Feb. 24, 2022, pursuant to EO 14024, OFAC Directive 3 prohibits all transactions in, provision of financing for, and other dealings in new debt of greater than 14 days maturity and new equity issued by 13 Russian state-owned enterprises and entities.

For further information, see White House Fact Sheet, OFAC FAQs and OFAC Recent Actions page.

D. Designations of Financial Institutions, and Executives and Board Members of Financial Institutions as Specially Designated Nationals (SDNs)

The designation of financial institutions, as well as executives and board members of financial institutions, as Specially Designated Nationals (SDNs) has been a popular and powerful sanction measurement imposed by OFAC. U.S. persons are prohibited from engaging in any business with an SDN and must freeze an SDN’s property and interests in property in the United States or in the U.S. person’s possession. An SDN designation is the most restrictive U.S. sanctioned person designation. An SDN is an individual or entity listed on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List) or an entity that is owned 50% or more, individually or in the aggregate, by an SDN.

In just the financial sector, OFAC has imposed:

a. SDN designations with full blocking restrictions on:

1. Sberbank and 42 of its subsidiaries
2. VTB Bank Public Joint Stock Company (VTB Bank) and over 25 of its subsidiaries
3. Joint Stock Company Alfa-Bank (Alfa-Bank), six of its subsidiaries, and five vessels
4. State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank (VEB) and 25 of its subsidiaries
5. Promsvyazbank Public Joint Stock Company (PSB), 17 of its subsidiaries, and five vessels
6. Public Joint Stock Company Bank Financial Corporation Otkritie (Otkritie) and 12 of its subsidiaries
7. Open Joint Stock Company Sovcombank (Sovcombank) and 22 of its subsidiaries
8. Joint Stock Commercial Bank Novikombank (Novikombank) and 34 of its subsidiaries
9. Joint Stock Company Moscow Industrial Bank (MIB) and 10 of its subsidiaries
10. Public Joint Stock Company Rosbank (Rosbank)

b. SDN designations of Russian state-owned and private financial institutions’ executives and board members:

1. Certain board members of Sberbank
2. Certain board members of Gazprombank (GPB)
3. Certain governors of the Central Bank of the Russian Federation

c. Prohibited dealings in new debt and equity (per Directive 3 under EO 14024) in:

1. Credit bank of Moscow public joint stock company
2. Gazprombank joint stock company
3. Joint stock company Alfa-bank
4. Joint stock company Russian Agricultural Bank
5. Joint stock company Sovcomflot
6. Open joint stock company Russian Railways
7. Public joint stock company Alrosa
8. Public joint stock company Gazprom
9. Public joint stock company Gazprom Neft
10. Public joint stock company Rostelecom
11. Public joint stock company Rushydro
12. Public joint stock company Sberbank of Russia
13. Public joint stock company Transneft
14. Public joint stock company Rosbank

d. ​​​​​​Prohibited transactions (with Non-SDN Menu-Based Sanctions (NS-MBS) List):

1. Central Bank of Russia
2. Russian Ministry of Finance
3. National Wealth Fund

These designations are separate and apart from any designations, sanctions or license requirements imposed by BIS.

For more information, see the Feb. 23, 2022 BakerHostetler Alert and the March 1, 2022 Baker Hostetler Alert and links set forth below under Additional SDN Designations.

To screen for sanctioned persons, you may use the free online U.S. Government Screening Tool.

VII. Further Specially Designated National and Blocked Person Designations

As of Jan. 9, 2023, OFAC has designated over 1,180 individuals and over 1,290 entities related to Russian and Ukrainian sanctions as SDNs, and that number does not include entities that are owned 50% or more, individually or in the aggregate, by an SDN, which, pursuant to OFAC guidance, must be treated as SDNs. Recent additions over the past few months include influential financers of Russian commercial banks, weapons manufacturer Limited Liability Company Promtekhnologiya (Promtechologia), state-controlled television stations (Russia-1, Channel One and NTV, all of which are directly or indirectly state-owned and controlled media within Russia), truck manufacturer KAMAZ Publicly Traded Company and its subsidiaries, and many other distributors, manufacturers and state-owned enterprises involved in the Russian military industrial complex. These designations supplement the hundreds of other designations, including those affecting government officials, oligarchs and entities that support Russia’s war-fighting efforts against Ukraine.

On Dec. 18, OFAC designated 18 additional entities related to Russia’s financial sector and 17 more subsidiaries of VTB Bank. These designations supplement the already existing sanctions placed on VTB Bank and its other subsidiaries which have been blocked since February 2022. Additionally, influential Russian oligarch Vladimir Potanin and 29 Russian heads of regions and governors who are assisting in the mobilization orders for Russian citizens were added to OFAC’s SDN List. Rosbank, a major Russian bank indirectly owned by Mr. Potanin, was also added to the SDN List. These actions reflect the U.S. government’s continued focus on isolating Russian banks from accessing global markets and credit.

As a result of Rosbank’s designation, OFAC has issued updated and new general licenses:

• New GL 58: authorizing all transactions that are ordinarily incident and necessary to the winding down of transactions involving Rosbank, or any entity in which Rosbank owns, directly or indirectly, a 50% or greater interest through March 15, 2023.
• New GL 59: authorizing the winding down of certain securities and derivatives transactions involving Rosbank and U.S. persons’ divestment or transfer of securities of Rosbank to non-U.S. persons through March 15, 2023.
• Amended GL 8E: adding Rosbank to GL authorizing blocked financial institutions to process energy-related transactions through May 16, 2023.

Further, on Dec. 22, the Department of the State designated 10 entities for addition to OFAC’s SDN List. The following six entities were added for operating or having operated in both the defense and related materiel sector and the marine sector of the Russian Federation economy:

• JOINT STOCK COMPANY BATTERY COMPANY RIGEL (RIGEL): a manufacturer of nickel-metal hydride and silver-zinc batteries and a supplier to the Russian navy for more than 15 years.
• JOINT STOCK COMPANY CONCERN CENTRAL INSTITUTE FOR SCIENTIFIC RESEARCH ELEKTROPRIBOR (ELEKTROPRIBOR): a developer and manufacturer of high-precision navigation, gyroscopy, gravimetry, optical electronic systems of submarines, and marine communication systems.
• JOINT STOCK COMPANY CONCERN AVRORA SCIENTIFIC AND PRODUCTION ASSOCIATION (AVRORA): a developer, manufacturer, supplier and insurer of warranty maintenance and servicing of onboard hardware automated control systems for submarines and naval surface ships.
• СONCERN MORINFORMSYSTEM AGAT JOINT STOCK COMPANY: a leading company in the Russian shipbuilding industry specializing in the development, production and maintenance of combat information and control systems, as well as integrated systems, integrated control automation systems for marine formations, sea-based cruise and ballistic missile fire control systems, ship-based and coastal missile and radar systems, sonar systems.
• CENTRAL RESEARCH INSTITUTE OF STRUCTURAL MATERIALS PROMETEY: a large materials research center in Russia.
• JOINT STOCK COMPANY CENTRAL RESEARCH INSTITUTE OF MARINE ENGINEERING: a major Russian enterprise engaged in development and supply of ship machinery installed on Russian merchant and naval vessels.

The four entities added to the SDN List for operating in or having operated in the marine sector of Russia are:

• P.P. SHIRSHOV INSTITUTE OF OCEANOLOGY OF THE RUSSIAN ACADEMY OF SCIENCES: the oldest and largest Russian research center in the field of oceanology.
• TECHNOPOLE COMPANY: a company involved in ocean exploration, oceanology, oceanography, hydrography, seabed data imagery, navigation and positioning at sea and underwater, dredging, inspection of underwater objects, hydrology, and water quality.
• JOINT STOCK COMPANY OBUKHOVSKOYE: a leading Russian developer and manufacturer of marine equipment, with a wide range of customers in military and civil shipbuilding.
• MARINE BRIDGE AND NAVIGATION SYSTEMS LTD: a developer and manufacturer of marine equipment and automation systems for the maritime industry.

For more information, see OFAC Dec. 22, 2022 Russia-Related Designations; Dec. 15, 2022 Further Constraining Russia’s Financial Sector Services; OFAC Nov. 14, 2022 Sanctions Kremlin Linked Networks Procuring Technology for Russian Military; OFAC Oct. 19, 2022 Targeting Military Procurement Operatives; OFAC Sept. 30, 2022 Announcement of Response to Ukraine Annexation; OFAC Sept. 15, 2022 Announcement Targeting Facilitators of Russian Aggression; OFAC Aug. 2, 2022 Announcement Sanctioning Elites and Revenue Generating Companies for Russian War Effort; OFAC June 28, 2022 Announcement Regarding SDN Designations;OFAC April 6, 2022 Announcement Regarding SDN Designations; Russia-related Designations and Designations Updates; Issuance of Russia-related General Licenses; OFAC March 31 Announcement; OFAC March 24 Announcement; OFAC Announcement of Feb. 25, and OFAC Announcement of Feb. 24.

To ensure that you do not engage in business with an SDN or other sanctioned party, it is essential that all parties to the transaction, including all potential end users and intermediaries, are screened against OFAC’s SDN List and other applicable U.S. sanctioned persons lists, which may include BIS’ Entity List and BIS’ List of Denied Persons. As a best practice, sanctioned person screening should be done at the time the order comes in/negotiations begin, before engaging in the transaction and before shipping. Dynamic screening is recommended to ensure that dealings do not occur between screenings. Penalties for violations of the OFAC economic sanctions may be imposed on a strict liability basis. You also should verify that no party to a transaction is owned 50% or more, individually or in the aggregate, by an SDN.

To screen for sanctioned persons, you may use the free online U.S. Government Screening Tool.

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