This is part of a series of advisory alerts from Venable's International Trade and Logistics Group, published in response to the ongoing situation in Ukraine. Earlier alerts on Russia and Ukraine sanctions are available in sequential order here, here, here, here, and here.
As the Russian invasion of Ukraine reaches the one-month mark, the United States government, its allies, and several U.S. states continue to roll out new measures to further isolate Russia from the global economy. The latest round of U.S. sanctions—introduced on Thursday, March 24, 2022, as President Biden convened with allied leaders in Brussels—mainly target the Russian legislature and the Russian military-industrial complex.
In the latest tranche of sanctions, the Office of Foreign Assets Control (OFAC) has added the following key Russian individuals and entities to the Specially Designated Nationals (SDN) List:
- The State Duma of the Federal Assembly of the Russian Federation ("the Duma") and 328 of its members
- Herman Gref, the CEO and chairman of Sberbank, Russia's largest bank (transactions with Sberbank were previously restricted pursuant to Directive 2 under EO 14024)
- Multiple Russian defense companies, their subsidiaries, and their leaders, including Tactical Missiles Corporation JSC (known as KTRV), JSC NPO High Precision Systems, NPK Tekhmash OAO, Joint Stock Company Russian Helicopters, and Joint Stock Company Kronshtadt
- 17 directors of PJSC Sovcombank, a designated entity. OFAC has also redesignated OOO Volga Group, a Russian financial services firm, and its CEO, Gennady Nikolayevich Timchenko, and designated OOO Transoil, which Timchenko owns
As a reminder, U.S. persons are generally prohibited from transacting with SDN-listed persons or entities and must block all property and interests in property of SDNs. Relatedly, the UK on Thursday also introduced a package of 65 sanctions targeting strategic Russian industries, banks, and oligarchs.
In another unique development, in recent weeks, numerous U.S. governors have signed executive orders (EOs) that, to varying degrees, restrict state agencies from engaging in Russia-related contracts. Among the most significant restrictions is New York EO No. 14, signed February 27, 2022, which directs all state agencies to review and divest public funds from Russian entities, and to terminate contracts with Russian entities. The governors of Ohio, North Carolina, New Jersey, Massachusetts, Colorado, Indiana, and California have also issued executive orders directing state agencies to take various steps to disassociate from Russian companies or state-owned entities. Additionally, several states have adopted bans prohibiting the sale of Russian-origin vodkas in state liquor stores. These come in addition to the Biden administration's recent import ban on various Russian-origin alcohol products, as discussed in this previous Venable alert.)
As the risks of transacting with Russian persons and entities continue to escalate, persons and entities subject to U.S. jurisdiction should carefully consider U.S. (federal and state), UK, EU, and other restrictions that may apply, whether directly or indirectly, before proceeding in the region.
