The Bass, Berry & Sims international trade team is actively monitoring the situation in Russia and Ukraine and providing real-time advice to clients on managing the situation. This post summarizes the evolving situation as of Thursday, March 24 concerning current U.S. sanctions and export restrictions related to Russia and Ukraine. This post supplements our previous analysis all of which are linked at the end of today’s content.

United States Aligns with Allies, Sanctions Hundreds of Russian Lawmakers and Others

On March 24, President Biden announced that the United States will impose sanctions on “over 400 individuals and entities comprised of Russian elites, the Duma and more than 300 of its members, and defense companies.” In so doing, the United States aligns itself with the sanctions efforts of the European Union and G7 (which consists of Canada, Japan, and the UK along with several members of the EU). This continues the unprecedented multilateral effort to restrict trade with and involving Russia.

Consistent with the White House announcement, the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) designated as blocked parties the following individuals and entities:

• The State Duma of the Federal Assembly of the Russian Federation and 328 of its members.
• Herman Gref, CEO of Sberbank. Sberbank itself is subject to significant trade restrictions under Russia Directive 2 but has not been designated as an SDN. See our February 24 post for more information.
• Tactical Missiles Corporation JSC a/k/a KTRV and 28 related entities. KTRV is a Russian-state owned military conglomerate.
• Boris Viktorovich Obnosov, General Director of KTRV.
• Joint Stock Company Russian Helicopters and 15 related entities.
• JSC NPO High Precision Systems.
• NPK Tekhmash OAO.
• Joint Stock Company Kronshtadt.

As a general matter, U.S. individuals and entities are prohibited from conducting any transaction with a blocked party. This includes entities that are 50% or more owned by one or more blocked party even if that entity is not itself identified as a blocked party.

OFAC also issued a new Frequently Asked Question (FAQ) to emphasize that gold-related transactions or persons participating in the gold market involving Russia may be subject to sanctions. OFAC apparently issued this FAQ at least in part to highlight evasive conduct by Russian actors limited in cash and dollar dealings by existing Russia restrictions.

State Department and OFAC Act Together to Designate Russian Parties

Also on March 24, the U.S. State Department announced the designation of the following individuals and entities:

• 17 members of the board of PJSC Sovcombank, which itself was designated as an SDN on February 24.
• Gennady Nikolayevich Timchenko:
  • Two entities owned by Timchenko:
    • OOO Volga Group
    • OOO Transoil
  • Family members of Timchenko:
    • Elena Petrovna Timchenko
    • Natalya Browning
• Ksenia Gennadevna Frank, a board member of OOO Transoil (itself designated as noted above), along with a relative, Gleb Sergeevich Frank

OFAC will add these parties to the SDN List, along with a yacht named the Lena (which Italian authorities seized earlier this month), that is owned by Gennady Timchenko.

OFAC Issues New and Amended General Licenses, New FAQs

In addition to expanding sanctions, OFAC issued two amended General Licenses (GLs) and two new GLs to authorize certain otherwise prohibited conduct.  GL 6A pertains to agricultural products, medicine, and medical devices, and replaces GL 6, which was issued on February 24; GL 17A pertains to import transactions involving alcoholic beverages, non-industrial diamonds, and fish and other seafood, and extends the authorization for such imports beyond the original expiration date of March 11.  GL 17A replaces GL 17, which was issued on March 11.  OFAC also published two FAQs related to the import of restricted products from Russia.

OFAC also issued new GL 20, which authorizes activities related to certain diplomatic and consular funds transfers, and GL 25, which authorizes certain journalistic activities in restricted regions of Ukraine.