News Story

Russia/Ukraine: Status of U.S. Sanctions as of 3/20/14

March 20, 2014

By Executive Orders (EOs) issued on March 17, 2014 and March 20, 2014, the United States has designated 31 individuals in Russia and Ukraine and one Russian bank as subject to sanctions.

The two EOs and the names of the parties sanctioned pursuant to each EO may be accessed at:

http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/pages/20140317.aspx

http://www.treasury.gov/press-center/press-releases/Pages/jl23331.aspx

The listed parties are designated as Specially Designated Nationals (SDNs). U.S. persons and entities may not have any dealings with SDNs or with entities in which SDNs have a direct or indirect interest of 50% or more. Under certain circumstances, an exception may be granted if the U.S. Office of Foreign Assets Control (OFAC) issues a license. The individuals listed as SDNs are also prohibited from entering the United States, and their assets in the United States or assets that come under possession of a U.S. person are blocked.

Both EOs set the stage for future sanctions to be adopted.

The March 17 EO authorized the potential designation of certain other persons as SDNs if determined by the Secretary of the Treasury. Such persons may include (A) officials of the Government of the Russian Federation; (B) persons operating in the arms or related material sector in the Russian Federation; (C) individuals or entities owned or controlled by, or who have acted or purported to act for or on behalf of, directly or indirectly, (i) a senior official of the Government of the Russian Federation or (ii) a person whose property and interests in property are blocked by U.S. sanctions (i.e., an SDN); or (D) individuals or entities who have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, (i) a senior official of the Government of the Russian Federation or (ii) a person whose property and interests in property are blocked by U.S. sanctions. For purposes of the above, the term “Government of the Russian Federation” is defined as to mean “any political subdivision, agency, or instrumentality thereof, including the Central Bank of the Government of the Russian Federation, and any person owned or controlled by, or acting for or on behalf of, the Government of the Russian Federation.”

The March 20 EO authorized the potential SDN designation of companies in various industry sectors in Russia. The universe of those who may become sanctioned and whose property will become blocked as a result encompasses any individual, company, or other entity whom the Secretaries of the Treasury and State determine to “operate in such sectors of the Russian Federation economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, such as financial services, energy, metals and mining, engineering, and defense and related materiel.” The EO also gives discretion to the Secretaries to sanction parties in other sectors of the Russian economy.