UPDATE: Developments in the Ukraine and Impact on Investments

Following the agreement between G7 leaders on 25 April to promptly impose additional sanctions on Russia as it has failed to deliver on its Geneva commitments, the EU and the U.S. have now added new individuals and entities to their respective lists.

EU Sanctions
On 28 April, the EU governments reached an agreement to impose an asset freeze, a prohibition against making funds or economic resources available and an EU visa ban on another 15 individuals as part of expanded sanctions on Russia in view of the gravity of the situation in Ukraine. The names of the individuals were published on 29 April in the Official Journal of the EU which means that those individuals are now subject to those restrictive measures. The list includes deputy prime minister of Russia, Dmitry Nikolayevich Kozak, a deputy chairman of the Duma, Ludmila Ivanovna Shvetsova, and Valery Vasilevich Gerasimov, chief of staff of Russia's armed forces.

The individuals, together with the reasons for their inclusion in the list of persons subject to the restrictive measures as described in the EU legislation, are as follows:

  1. Dmitry Nikolayevich Kozak (d.o.b 7.11.1958 in Kirovohrad, Ukrainian SSR; Deputy Prime Minister) - Responsible for overseeing the integration of the annexed Autonomous Republic of Crimea into the Russian Federation.
  2. Oleg Yevgenyvich Belaventsev (d.o.b 15.9.1949 in Moscow; Plenipotentiary Representative of the President of the Russian Federation into the so called ‘Crimean Federal District’, Non-permanent member of the Russian Security Council) - Responsible for the implementation of the constitutional prerogatives of the Russian Head of State on the territory of the annexed Autonomous Republic of Crimea.
  3. Oleg Genrikhovich Savelyev (d.o.b 27.10.1965 in Leningrad; Minister for Crimean Affairs) - Responsible for the integration of the annexed Autonomous Republic of Crimea into the Russian Federation.
  4. Sergei Ivanovich Menyailo (d.o.b 22.8.1960 in Alagir, North-Ossetian Autonomous SSR, RSFSR) - Acting governor of the Ukrainian annexed city of Sevastopol.
  5. Olga Fedorovna Kovatidi (d.o.b 7.5.1962 in Simferopol, Ukrainian SSR) - Member of the Russian Federation Council from the annexed Autonomous Republic of Crimea.
  6. Ludmila Ivanovna Shvetsova (d.o.b 24.9.1949 in Alma-Ata, USSR; Deputy Chairman of State Duma, United Russia) — Responsible for initiating legislation to integrate the annexed Autonomous Republic of Crimea into the Russian Federation.
  7. Sergei Ivanovich Neverov (d.o.b 21.12.1961 in Tashtagol, USSR; Deputy Chairman of State Duma, United Russia) — Responsible for initiating legislation to integrate the annexed Autonomous Republic of Crimea into the Russian Federation.
  8. Igor Dmitrievich Sergun (d.o.b 28.3.1957; Director of GRU (Main Intelligence Directorate), Deputy Chief of the General Staff of the Armed Forces of the Russian Federation, Lieutenant-General) — Responsible for the activity of GRU officers in Eastern Ukraine.
  9. Valery Vasilevich Gerasimov (d.o.b 8.9.1955 in Kazan; Chief of the General Staff of the Armed Forces of the Russian Federation, First Deputy Minister of Defence of the Russian Federation, General of the Army) — Responsible for the massive deployment of Russian troops along the border with Ukraine and lack of de-escalation of the situation.
  10. German Prokopi - Active leader of the ‘Lugansk Guard’. Took part in the seizure of the building of the Lugansk regional office of the Security Service, recorded a video address to President Putin and Russia from the occupied building. Close links with the ‘Army of the South-East’.
  11. Valeriy Bolotov - One of the leaders of the separatist group ‘Army of the South-East’ which occupied the building of the Security Service in the Lugansk region. Retired officer. Before seizing the building he and other accomplices possessed arms apparently supplied illegally from Russia and from local criminal groups.
  12. Andriy Purgin - Head of the ‘Donetsk Republic’, active participant and organiser of separatist actions, co-ordinator of actions of the ‘Russian tourists’ in Donetsk. Co-founder of a ‘Civic Initiative of Donbass for the Eurasian Union’.
  13. Denys Pushylin (Born in Makiivka) - One of the leaders of the Donetsk People's Republic. Participated in the seizure and occupation of the regional administration. Active spokesperson for the separatists.
  14. Tsyplakov Sergey Gennadevich - One of the leaders of ideologically radical organization People's Militia of Donbas. He took active part in the seizure of a number of state buildings in Donetsk region.
  15. Igor Strelkov (Ihor Strielkov) - Identified as staff of Main Intelligence Directorate of the General Staff of the Armed Forces of the Russian Federation (GRU). He was involved in incidents in Sloviansk. He is an assistant on security issues to Sergey Aksionov, self-proclaimed prime-minister of Crimea.

Further, the European Commission has now published several Implementing Regulations opening and providing for the administration of the EU import tariff quotas for beef, veal, poultry and pig meats, eggs, egg products and albumins, and amending EU law on management of the tariff quotas for dairy products, originating in Ukraine. This is in a response to EU Regulation 374/2014 which provides for preferential arrangements for 2014 as regards customs duties for imports of certain goods originating in Ukraine.

U.S. Sanctions
In accordance with Executive Order 13661, on 28 April, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) imposed sanctions on 7 Russian government officials who are now subject to an asset freeze and a U.S. visa ban, and 17 companies which are subject to an asset freeze. In addition, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) imposed additional restrictions on 13 of those 17 companies by imposing licence requirements with a “presumption of denial” for the export, re-export or other foreign transfer of items subject to the U.S. Export Administration Regulations to the companies.

The following individuals have been added to OFAC’sList of Specially Designated Nationals and Blocked Persons (“SDN List”):

  1. Oleg Evgenyevich Belavencev (a.k.a. BELAVENTSEV, Oleg); (d.o.b. 15 Sep 1949; Russian Presidential Envoy to the Crimean District; Member of the Russian Security Council)
  2. Sergei Chemezov (a.k.a. CHEMEZOV, Sergey Viktorovich); (d.o.b. 20 Aug 1952; born in Cheremkhovo, Irkutsk, Russia)
  3. Dmitry Kozak (d.o.b. 07 Nov 1958; born in Kirovograd, Ukraine; Deputy Prime Minister of the Russian Federation)
  4. Evgeniy Alekseyevich MUROV (a.k.a. MUROV, Evgeny; a.k.a. MUROV, Yevgeniy; a.k.a. Murov, Yevgeny) (d.o.b. 18 Nov 1945; born in Zvenigorod, Moscow, Russia; Director of the Federal Protective Service of the Russian Federation; Army General)
  5. Aleksei Konstantinovich Pushkov (a.k.a. PUSHKOV, Alexei) (d.o.b. 10 Aug 1954; Chairman of State Duma Committee on International Affairs)
  6. Igor Sechin (d.o.b. 07 Sep 1960; born in St. Petersburg, Russia)
  7. Vyacheslav Volodin (d.o.b. 04 Feb 1964; born in Alexeyevka, Khvalynsk district, Saratov, Russia; First Deputy Chief of Staff of the Presidential Executive Office).

The following entities have been added to OFAC's SDN List:

  1. AQUANIKA (a.k.a. AQUANIKA LLC; a.k.a. LLC RUSSKOYE VREMYA; a.k.a. OBSHCHESTVO S OGRANICHENNOI OTVETSTVENNOSTYU RUSSKOE VREMYA; a.k.a. RUSSKOE VREMYA OOO; a.k.a. RUSSKOYE VREMYA LLC) (47A, Sevastopolskiy Ave., of. 304, Moscow 117186, Russia; 1/2 Rodnikovaya ul., Savasleika s., Kulebakski raion, Nizhegorodskaya oblast 607007, Russia; Website http://www.aquanika.com; alt. Website http://aquanikacompany.ru; Email Address office@aquanika.com; Registration ID 1075247000036)
  2. AVIA GROUP LLC (a.k.a. AVIA GROUP LTD) (Terminal Aeroport Sheremetyevo Khimki, 141400 Moskovskaya obl., Russia; Website http://www.avia-group.su/)
  3. AVIA GROUP NORD LLC (17 A, Stratoyava St., Saint Petersburg, Russia; Website http://www.ag-nord.ru)
  4. CJSC ZEST (a.k.a. ZEST LEASING) (pr. Medikov 5, of. 301, St. Petersburg, Russia; 2 Liter a Pl. Rastrelli, St. Petersburg 191124, Russia; Website http://www.zest-leasing.ru; Registration ID 1027809190507; Government Gazette Number 44323193)
  5. INVESTCAPITALBANK (a.k.a. INVESTKAPITALBANK; a.k.a. OJSC INVESTCAPITALBANK; a.k.a. OPEN JOINT STOCK COMPANY INVESTCAPITALBANK) (100/1, Dostoevskogo Street, Ufa, Bashkortostan Republic 450077, Russia; SWIFT/BIC INAKRU41; Website http://www.investcapitalbank.ru; License 2377)
  6. JSB SOBINBANK (a.k.a. SOBINBANK) (15 Korp. 56 D. 4 Etazh ul. Rochdelskaya, Moscow 123022, Russia; 15/56 Rochdelskaya Street, Moscow 123022, Russia; SWIFT/BIC SBBARUMM; Website http://www.sobinbank.ru; Registration ID 1027739051009; Government Gazette Number 09610355)
  7. SAKHATRANS LLC (a.k.a. OBSHCHESTVO S OGRANICHENNOI OTVETSTVENNOSTYU SAKHA (YAKUTSKAYA) TRANSPORTNAYA KOMPANIYA; a.k.a. SAKHATRANS OOO) (14 ul. Molodezhnaya Rabochi Pos. Vanino, 682860 Vaninski, Raion Khabarovski Krai, Russia)
  8. SMP BANK (a.k.a. BANK SEVERNY MORSKOY PUT; a.k.a. SMP BANK OPEN JOINT-STOCK COMPANY) (71/11 Sadovnicheskaya Street, Moscow 115035, Russia; SWIFT/BIC SMBKRUMM; Website www.smpbank.ru; Email Address smpbank@smpbank.ru)
  9. STROYGAZMONTAZH (a.k.a. LIMITED LIABILITY COMPANY STROYGAZMONTAZH; a.k.a. STROYGAZMONTAZH CORPORATION; a.k.a. "SGM") (53 prospekt Vernadskogo, Moscow 119415, Russia; Website www.ooosgm.com; alt. Website www.ooosgm.ru; Email Address info@ooosgm.ru)
  10. STROYTRANSGAZ GROUP (a.k.a. STROYTRANSGAZ; a.k.a. "STG GROUP") (3 Begovaya Street, Building #1, Moscow 125284, Russia; Website www.stroytransgaz.ru)
  11. STROYTRANSGAZ HOLDING (a.k.a. STG HOLDING LIMITED; a.k.a. STG HOLDINGS LIMITED; a.k.a. STROYTRANSGAZ HOLDING LIMITED; a.k.a. "STGH") (33 Stasinou Street, Office 2 2003, Nicosia Strovolos, Cyprus)
  12. STROYTRANSGAZ LLC (a.k.a. OOO STROYTRANSGAZ) (House 65, Novocheremushkinskaya, Moscow 117418, Russia)
  13. STROYTRANSGAZ OJSC (a.k.a. OAO STROYTRANSGAZ) (House 58, Novocheremushkinskaya St., Moscow 117418, Russia)
  14. STROYTRANSGAZ-M LLC (26th Meeting of the Communist Party Street, House 2V, Novy Urengoy, Tyumenskaya Oblast, Yamalo-Nenetsky Autonomous Region 629305, Russia)
  15. THE LIMITED LIABILITY COMPANY INVESTMENT COMPANY ABROS (a.k.a. LLC IC ABROS) (2 Liter a Pl. Rastrelli, St. Petersburg 191124, Russia; Government Gazette Number 72426791; Telephone: 7812 3358979)
  16. TRANSOIL (a.k.a. LIMITED LIABILITY COMPANY TRANSOIL; f.k.a. OBSHCHESTVO S ORGANICHERNNOI OTVETSTVENNOSTYU TRANSOIL; a.k.a. TRANSOIL LLC; a.k.a. TRANSOYL SNG LTD.) (18A Petrogradskaya nab., St. Petersburg 197046, Russia; Website http://www.transoil-spb.ru; alt. Website http://transoil.com; Email Address info@toil.spb.ru; Registration ID 1037835069986)
  17. VOLGA GROUP (a.k.a. VOLGA GROUP INVESTMENTS; f.k.a. VOLGA RESOURCES; f.k.a. VOLGA RESOURCES GROUP) (3, rue de la Reine L-2418, Luxembourg; Russia)

In addition, as noted above, on 28 April BIS added the following 13 entities to the Entity List: Stroytransgaz Holding, located in Cyprus; Volga Group, located in Luxembourg and Russia; and Aquanika, Avia Group LLC, Avia Group Nord LLC, CJSC Zest, Sakhatrans LLC, Stroygazmontazh, Stroytransgaz Group, Stroytransgaz LLC, Stroytransgaz-M LLC, Stroytransgaz OJSC, and Transoil, all located in Russia.

Furthermore, on 28 April, BIS and the U.S. Department of State’s Directorate of Defense Trade Controls announced a tightened policy to deny pending export license applications for any high-technology items that could contribute to Russia’s military capabilities. Any existing export licenses that meet these conditions will also be revoked and all other pending applications and existing licenses will receive a case-by-case evaluation to determine their contribution to Russia’s military capabilities.

We will continue to update with alerts as the situation develops.

Topics:  BIS, EU, European Commission, Frozen Assets, OFAC, Russia, Sanctions, SDN List, Ukraine, Visas

Published In: General Business Updates, Elections & Politics Updates, Finance & Banking Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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