On February 23, 2024, on the 2nd anniversary of Russia’s invasion of Ukraine, the Treasury Department’s Office of Foreign Assets Control (OFAC) announced significant new sanctions, adding nearly 300 Russian and select third-country entities to the Specially Designated Nationals and Blocked Persons List (“SDN”) with which nearly all dealings by U.S. persons are prohibited. In addition, the Commerce Department’s Bureau of Industry and Security (BIS) added 93 entities to the Entity List, restricting all exports of U.S. items to those entities. These restrictions align with new sanctions and export controls announced by the UK and EU as well.
Companies should carefully review the lists of newly restricted parties to ensure that they do not engage in transactions with these parties without a license. Any ongoing dealings with Russia should be reviewed anew to see if the additional sanctions apply. The sanctioned entities cross many different sectors and countries, and include:
- Russian companies making machine tools and other manufacturing and metalworking equipment
- Russian entities supporting electronics manufacturing and the information technology sector
- Russia’s aerospace sector
- Third-country manufacturers of metalworking equipment, aircraft and truck parts, and dual-use electronics, including in China, the UAE, Serbia, and Liechtenstein
- Logistics and cargo transportation entities
Of note, entities owned 50% or more by the entities and individuals added to the SDN List are also subject to the sanctions. While OFAC issued a handful of general licenses to allow winddown of transactions with some of the newly sanctioned entities, these general licenses are limited in time and scope. Additional restrictions may be forthcoming as the U.S. and its allies seek to put further pressure on Russia and any third-country entities that are diverting products to Russia or otherwise circumventing sanctions.
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