​On September 1, 2016, the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury (Treasury) designated 37 new individuals and entities as Specially Designated Nationals and Blocked Persons (SDNs) pursuant to Ukraine-/Russia-related sanctions authorities (Executive Orders (EOs) 13660, 13661 and 13685).  In addition, OFAC identified 96 entities as being 50 percent or more owned by existing Sectoral Sanctions Identifications (SSI) targets (Bank of Moscow, Gazprombank, and Gazprom); these entities have been, and will continue to be, subject to the same restrictions as their parent entities.

Concurrently, OFAC announced the publication of Russia/Ukraine-related General License No. 10, which authorizes certain transactions that are ordinarily incident and necessary to divest or transfer to a non-U.S. person holdings in PJSC Mostotrest, a new SDN as of September 1, 2016, which otherwise would be prohibited by Executive Order 13685.

Additional information can be found in the OFAC press release, which includes identifying details for each new SDN or SSI target, and in the Treasury press release, which provides additional context for these actions.

SDN Designations

The 37 new SDNs include:

• 1 entity designated pursuant to EO 13661 as being linked to SDNs previously designated under that EO;

• 17 Ukrainian separatists and 1 entity targeted pursuant to EO 13660 for, inter alia, threatening the security or stability of Ukraine; and

• 18 construction, transportation, and defense entities designated pursuant to EO 13685 for operating in the Crimea region of Ukraine.

All property and interests in property that (i) are in the United States, (ii) hereafter come within the United States, or (iii) are or hereafter come within the possession or control of any U.S. person (including any foreign branch) of these individuals and entities, are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in without authorization from OFAC.  These restrictions also apply to any subsidiaries that are owned 50 percent or more, in the aggregate, by one or more of these individuals, entities, or other SDNs.  Such subsidiaries are caught by these new designations regardless of whether they are identified on the SDN List.  U.S. persons, wherever located, are also generally prohibited from engaging in any transaction or dealing with any person whose property or interests in property are blocked, unless otherwise authorized by OFAC.

SSI Identifications

OFAC also identified 96 entities as being 50 percent or more owned by Bank of Moscow, Gazprombank, and Gazprom.   Pursuant to EO 13662, both Bank of Moscow and Gazprombank were previously identified as SSIs subject to Directive One, while Gazprom is subject to Directive Four.  As entities that are 50 percent or more owned by one or more entities subject to the Directives issued pursuant to EO 13662, the 96 entities identified in OFAC’s September 1st action were already subject to the restrictions that were applicable to their 50 percent or more owners.¹  Nevertheless, these identifications are meant to clarify which parties are in fact subject to the sanctions and will assist the general public with better complying with existing U.S. sanctions.

1. For additional guidance on the restrictions applicable to entities that are 50 percent or more owned in the aggregate by one or more entities subject to Directives issued pursuant to EO 13662, refer to OFAC’s Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property Are Blocked, which is available here.