Washington, D.C. (March 8, 2024) – On February 23, 2024, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC), U.S. Department of State, and U.S. Department of Commerce announced significant new Russia-related sanctions on more than 500 entities.
The new sanctions follow both the death of Aleksey Navalny and the two-year anniversary of the Russia-Ukraine conflict. According to a statement by President Biden, the newly sanctioned entities were targeted for their connections to "Navalny's imprisonment as well as Russia's financial sector, defense industrial base, procurement networks and sanctions evaders across multiple continents."
Among these entities, OFAC designated National Payment Card System Joint Stock Company (NSPK), the state-owned operator of the Mir National Payment System, which facilitates both Russian domestic and international financial transactions.
In targeting the Russian military-industrial base, OFAC designated, among other entities, Joint Stock Company Special Economic Zone of Industrial Production Alabuga (SEZ Alabuga) and several of its notable affiliates in relation to its production of unmanned aerial vehicles (UAVs), in addition to a variety of Russia-based manufacturers whose products may be involved in the defense sector of Russia's economy.
OFAC also designated Russia's largest shipping company, Sovcomflot, as well as 14 crude oil tankers in which Sovcomflot has an interest, and several other shipping and logistics companies. Additional notable sanctioned entities include Russia's largest coal supplier, JSC SUEK, Russian intermodal container operator PJSC Transcontainer, oilfield equipment manufacturer JSC Rimera, and aluminum manufacturer JSC Samara Metallurgical Plant.
In connection with these sanctions, OFAC also issued several new General Licenses (GLs), that authorize certain otherwise prohibited transactions. Specifically, GLs 88A, 89, and 90authorize, through 12:01 a.m. Eastern Daylight Time, April 8, 2024, certain transactions incident and necessary to the wind down of transactions with, or divestment of debt or equity in, several newly sanctioned institutions, including JSC SUEK, PJSC Transcontainer, JSC Rimera, and JSC Samara Metallurgical Plant. GL91A authorizes, through 12:01 a.m. EDT, May 23, 2024, certain transactions with specific vessels or shipping companies related to emergency repairs, docking, or preservation of health and safety. GL 92 authorizes, through 11:59 p.m. EDT, April 8, 2024, the offloading of cargo from the 14 designated Sovcomflot oil tankers, provided that the cargo was loaded prior to February 23, 2024, and GL 93 broadly authorizes certain transactions related to vessels owned by Sovcomflot that are not explicitly sanctioned by OFAC.
In addition to the sanctions announced by OFAC and the State Department, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) imposed export restrictions on more than 93 entities, including entities in China, India, Kyrgyzstan, Russia, South Korea, Turkey, and the United Arab Emirates, for operating as Russian or Belarusian "military end users," supporting Russia's industrial base, or otherwise supporting the Russian economy or military capabilities, such as through diverting or attempting to divert U.S.-origin items to Russia without prior BIS authorization. Of these entities, more than 50 were designated as Russian-Belarusian military end users, imposing a licensing requirement for all items subject to the Export Administration Regulations (EAR) and a license review policy of denial, apart from certain food and medicine, which will be reviewed on a case-by-case basis.
Lewis Brisbois' attorneys are actively assisting clients as they navigate the framework of ever-evolving U.S. Sanctions. For more information related to this alert, please contact the authors and visit our Ukraine Conflict Response page.
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