This UPDATED post summarizes the situation as of late evening on Monday, February 28, concerning current U.S. sanctions and export restrictions related to Russia and Ukraine. This post supplements our post of late evening on Wednesday, February 23, which is available here, our post of late evening on Thursday, February 24, which is available here, and our post of late evening on Friday, February 25, which is available here.

Treasury Department, Office of Foreign Assets Control Announces New Sanctions

On Monday, February 28, the U.S. Office of Foreign Assets Control (OFAC) imposed additional sanctions on the Central Bank of Russia, the National Wealth Fund of the Russian Federation, and the Russian Ministry of Finance. These actions effectively freeze all assets of the Central Bank of Russia in the United States or held by a U.S. entity (such as a bank or other financial institution) or individual, wherever located.  OFAC also added the following parties to the Specially Designated Nationals (SDN) List:

  • The Russian Direct Investment Fund.
  • Kirill Aleksandrovich Dmitriev – CEO of the Russian Direct Investment Fund.
  • Joint Stock Company Management Company of the Russian Direct Investment Fund.
  • Limited Liability Company RVC Management Company.

OFAC issued Directive 4 under Executive Order (EO) 14,024, requiring a license for any transaction involving the Central Bank of Russia, the National Wealth Fund of the Russian Federation, or the Russian Ministry of Finance, including any transfers to or on behalf of such entities.

OFAC also issued General License 8A (GL 8A), which authorizes certain transactions “related to energy.” GL 8A supersedes General License 8, discussed previously, and augments the General License authority to include the Central Bank of Russia. GL 8A expires on June 24, 2022.

Finally, OFAC announced the issuance of the Russian Harmful Foreign Activities Sanctions Regulations at 31 CFR part 587 to implement Executive Order 14,024, which was issued in April 2021. The regulations will take effect upon publication on March 1, 2022.

Other U.S. Action, Coordination with Allies

As referenced in prior briefings, the United States continues to work with its allies to introduce and administer restrictions related to Russia and Ukraine. Of particular note is the action the United States and other countries have taken to remove select Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) messaging system that will disconnect such banks from the international financial system.

The U.S. government has also emphasized its coordination with allies on, as discussed above, measures to prevent the Central Bank of Russia from deploying its international reserves and identifying and freezing assets of individuals close to the Russian government.

We expect this coordinated action to continue. Therefore, we note the importance of reviewing the U.S. and all other applicable laws and requirements to ensure a complete understanding of your legal obligations related to Russia and Ukraine.

The Bass, Berry & Sims international trade team is actively monitoring the situation in Russia and Ukraine and providing real-time advice to clients on managing the situation. Please contact the authors anytime if we can assist.