This UPDATED post summarizes the situation as of late evening on Thursday, March 3, 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, our post of late evening on Friday, February 25, which is available here, our post of late evening Monday, February 28 available here.
Commerce Extends Russia Sanctions to Belarus
Late Wednesday, March 2, the Department of Commerce (Commerce) issued final rules to impose the same sanctions on Belarus that Commerce announced against Russia on February 24. Commerce stated it is responding to Belarus’s substantial enabling of Russia’s invasion of Ukraine. Now, export to Belarus of all items listed in Categories 3, 4, 5, 6, 7, 8, and 9 on the Commerce Control List requires a license; the Foreign Direct Product (FDP) rule is applied to Belarus, which will restrict access to foreign-produced items using U.S. technology; the license review policy is changed to presumption of denial; and the use of license exceptions are limited.
Embedded in the rule are further restrictions on the use of license exceptions related to information security and aviation, including a restriction on license exception AVS, an important authorization for aviation operators. Commerce also added two entities to the Entity List under Belarus, JSC Integral and the Ministry of Defense, including armed forces of Belarus, wherever located. Our February 28 post has details on the various provisions of Russia sanctions.
Commerce Announces 91 Additions to Entity List, Targets Refinery Sector
Late in the afternoon on March 3, Commerce announced that it was adding 91 entries to the Entity List in an effort to restrict their access to U.S. technology and goods.
According to Commerce, these “have been involved in, contributed to, or otherwise supported the Russian security services, military and defense sectors, and military and/or defense research and development efforts.” Notably, these entities are resident in locations as diverse as Belize, Singapore, Spain, and the United Kingdom – thus serving as a reminder about the importance of screening for denied or restricted parties wherever conducting business.
Also on March 3, Commerce issued a final rule targeted the oil refinery sector of Russia. This action is specifically intended to curb exports to Russia of equipment needed to refine oil – those items covered by the rule are listed in a new Supplement 4 to Export Administration Regulations (EAR) section 746. The new rule also adds to existing export restrictions at EAR section 746.5 on exports for use in the exploration or production of oil and gas in Russian shale, deepwater, or Arctic offshore projects. The U.S. Office of Foreign Assets Control (OFAC) also maintains sanctions with respect to providing support for such exploration or production efforts.
Treasury Announces Sweeping Sanctions against Putin Allies, Their Family Members and Seizes Certain Assets
On March 3, Department of the Treasury (Treasury) announced full blocking sanctions against the following individuals who provide the government of Russia with direct and indirect support in its continued invasion of Ukraine:
- Nikolai Tokarev (his wife Galina, daughter Yayya, and his two luxury real estate companies).
- Boris Rotenberg (his wife Karina, and sons Roman and Boris).
- Arkady Rotenberg (his sons Pavel and Igor, and daughter Liliya).
- Sergei Chemezov (his wife Yekaterina, son Stanislav, and stepdaughter Anastasiya).
- Igor Shuvalov (his five companies, wife Olga, son Evgeny and his company and jet, daughter Maria and her company).
- Yevgeniy Prigozhin (his three companies, wife Polina, daughter Lyubov, and son Pavel).
- Dmitry Peskov, Putin’s press secretary.
- Alisher Usmanov (his superyacht and jet).
On Usmanov’s designation, his superyacht and aircraft are blocked properties so that any transaction related to them, such as maintenance or payment of docking or landing fees conducted with U.S. persons or in U.S. dollars, are prohibited. Concurrent with Usmanov’s designation, Treasury issued General License 15 authorizing all transactions and unblocking all property of any entity owned 50% or more, directly or indirectly, by Usmanov, that does not appear on Specially Designated Nationals (SDN) List.
In addition to these full blocking sanctions, Treasury added 26 Russia- and Ukraine-based individuals and seven Russian entities to the SDN List for their role in Russia’s disinformation campaign related to the invasion of Ukraine. The seven Russian entities are as follows:
- SDN Strategic Culture Foundation and associated outlets Odna Rodyna, Rhythm of Eurasia, and Journal Kamerton.
- SDN InfoRos.
- New Eastern Outlook.
- Oriental Review.
- United World International.
As a result of today’s action, all property and interests in property of the SDN-listed individuals and entities in the United States or the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities owned, directly or indirectly, 50% or more by one or more blocked persons are also blocked.
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.