In response to Russia’s illegal declaration of annexations of Ukrainian territory, the United States and the European Union have imposed additional sanctions on Russia.
On October 4, 2022, the U.S. government added 57 entities to the Entity List. The measure prohibits virtually all exports to listed companies. The listings are designed to identify companies in two distinct categories: (1) companies involved in obtaining U.S.-origin items in support of Russia’s military, and (2) companies involved in the development of quantum computing technologies. Many of the newly listed entities are subject to the Russia/Belarus-Military End User Foreign Direct Product Rule. The Entity List is administered by the U.S. Department of Commerce, Bureau of Industry and Security. For these entities, BIS has imposed a policy of denial for all items subject to the EAR, with some exceptions for food and medicine designated as EAR99.
Separately, on September 30, 2022, the U.S. Office of Foreign Assets Control (OFAC) added 295 persons, including certain individual involved in Russia’s military-industrial complex and certain members of the Russian legislature, to the Specially Designated Nationals (SDN) List. U.S. law prohibits virtually all transactions with SDNs. We expect further designations will be forthcoming. OFAC notes in its recently issued Frequently Asked Question 1091 that it will be aggressively targeting persons – inside or outside Russia – who provide political or economic support to Russia.
On October 6, 2022, the EU announced a new package of Russian sanctions, the eighth such package since the Russian invasion of Ukraine. In brief summary, the sanctions include the following:
- An oil price cap: the EU ban on imports of Russian oil remains, but the new measure allows European companies to engage in transactions for the transport of Russian oil to third countries, provided the price of the oil remains under a pre-set cap;
- Additional listings of individuals and entities involved in Russia’s defense sector and those who were involved in the claimed annexation;
- Additional export restrictions including a ban on exports to Russia of coal, coking coal, specific electronic components, technical items used in the aviation sector, certain chemicals, and small arms;
- Additional import restrictions including a ban on the import of Russian finished and semi-finished steel products (subject to a transition period for some semi-finished goods), machinery and appliances, plastics, vehicles, textiles, footwear, leather, ceramics, certain chemical products, and non-gold jewelry;
- Restrictions on transacting with state owned enterprises including a ban on IT consultancy, legal advisory, architecture, and engineering services; all crypto-asset wallets, accounts, and custody services; all transactions with the Russian Maritime Register; and EU nationals from holding posts in the governing bodies of certain state-owned enterprises; and
- New anti-circumvention listing criterion, which would allow the EU to sanction persons who facilitate violations of the prohibition against the circumvention of sanctions.
The full text of the EU sanctions package may be found here. The EU has also renewed its targeted sanctions for six months such that those sanctions will last until March 15, 2023. We will continue to keep you updated as the situation evolves.
*Claire Le Tollec is a Legal Consultant in the firm’s Brussels office.