Ukraine Crisis Update: US Imposes New Sanctions on Major Russian Banks and Energy Companies

US announces “sectoral” sanctions on major banks and energy companies, adds to the Specially Designated Nationals list; European Council considers additional sanctions.

On July 16, 2014, the U.S. Department of the Treasury announced “sectoral sanctions” against two Russian banks (Vnesheconombank and Gazprombank) and two Russian energy firms (Rosneft and Novatek). The targeted sanctions, imposed through two “Directives” issued pursuant to Executive Order 13662, bar certain activities by US persons or within the United States involving newly issued debt and equity for the named banks and newly issued debt for the named energy companies, including entities owned 50 percent or more by these firms. The four firms targeted operate within particular “sectors” of the Russian economy (here, financial services and energy) identified as potential targets for sanctions in Executive Order 13662.

In addition to these sectoral sanctions, the Office of Foreign Assets Control (OFAC) added five individuals and 11 entities to the Specially Designated Nationals (SDN) list. The Commerce Department’s Bureau of Industry and Security also added these parties to the Entity List, which generally bars exports and reexports of US-origin items to listed parties.

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