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. This post summarizes the evolving situation as of Thursday, March 24 concerning current U.S. sanctions and export restrictions related to Russia and Ukraine. This post supplements our previous analysis all of which are linked at the end of today’s content.

United States Aligns with Allies, Sanctions Hundreds of Russian Lawmakers and Others

On March 24, President Biden announced that the United States will impose sanctions on “over 400 individuals and entities comprised of Russian elites, the Duma and more than 300 of its members, and defense companies.” In so doing, the United States aligns itself with the sanctions efforts of the European Union and G7 (which consists of Canada, Japan, and the UK along with several members of the EU). This continues the unprecedented multilateral effort to restrict trade with and involving Russia.

Consistent with the White House announcement, the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) designated as blocked parties the following individuals and entities:

  • The State Duma of the Federal Assembly of the Russian Federation and 328 of its members.
  • Herman Gref, CEO of Sberbank. Sberbank itself is subject to significant trade restrictions under Russia Directive 2 but has not been designated as an SDN. See our February 24 post for more information.
  • Tactical Missiles Corporation JSC a/k/a KTRV and 28 related entities. KTRV is a Russian-state owned military conglomerate.
  • Boris Viktorovich Obnosov, General Director of KTRV.
  • Joint Stock Company Russian Helicopters and 15 related entities.
  • JSC NPO High Precision Systems.
  • NPK Tekhmash OAO.
  • Joint Stock Company Kronshtadt.

As a general matter, U.S. individuals and entities are prohibited from conducting any transaction with a blocked party. This includes entities that are 50% or more owned by one or more blocked party even if that entity is not itself identified as a blocked party.

OFAC also issued a new Frequently Asked Question (FAQ) to emphasize that gold-related transactions or persons participating in the gold market involving Russia may be subject to sanctions. OFAC apparently issued this FAQ at least in part to highlight evasive conduct by Russian actors limited in cash and dollar dealings by existing Russia restrictions.

State Department and OFAC Act Together to Designate Russian Parties

Also on March 24, the U.S. State Department announced the designation of the following individuals and entities:

  • 17 members of the board of PJSC Sovcombank, which itself was designated as an SDN on February 24.
  • Gennady Nikolayevich Timchenko:
    • Two entities owned by Timchenko:
      • OOO Volga Group
      • OOO Transoil
    • Family members of Timchenko:
      • Elena Petrovna Timchenko
      • Natalya Browning
  • Ksenia Gennadevna Frank, a board member of OOO Transoil (itself designated as noted above), along with a relative, Gleb Sergeevich Frank

OFAC will add these parties to the SDN List, along with a yacht named the Lena (which Italian authorities seized earlier this month), that is owned by Gennady Timchenko.

OFAC Issues New and Amended General Licenses, New FAQs

In addition to expanding sanctions, OFAC issued two amended General Licenses (GLs) and two new GLs to authorize certain otherwise prohibited conduct.  GL 6A pertains to agricultural products, medicine, and medical devices, and replaces GL 6, which was issued on February 24; GL 17A pertains to import transactions involving alcoholic beverages, non-industrial diamonds, and fish and other seafood, and extends the authorization for such imports beyond the original expiration date of March 11.  GL 17A replaces GL 17, which was issued on March 11.  OFAC also published two FAQs related to the import of restricted products from Russia.

OFAC also issued new GL 20, which authorizes activities related to certain diplomatic and consular funds transfers, and GL 25, which authorizes certain journalistic activities in restricted regions of Ukraine.

If you have any questions or need any assistance related to this evolving situation or other international trade matters, please contact the authors. To read our previous coverage concerning the Russia-Ukraine situation, click the links below:

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Photo of Mi-Yong Kim Mi-Yong Kim

Mi-Yong Kim has nearly 25 years of experience related to export controls and national security. Based on her extensive government service, she is uniquely well equipped to provide advice to help clients navigate the complex regulations related to export controls and national security…

Mi-Yong Kim has nearly 25 years of experience related to export controls and national security. Based on her extensive government service, she is uniquely well equipped to provide advice to help clients navigate the complex regulations related to export controls and national security, including matters related to compliance with the Export Administration Regulations (EAR); the International Traffic in Arms Regulations (ITAR); the Committee on Foreign Investment in the United States (CFIUS); and foreign ownership, control, or influence (FOCI) mitigation by the Defense Security Service. Mi-Yong is also an Adjunct Professor at the National Chengchi University (NCCU) in Taipei, Taiwan. She teaches a graduate-level class on export controls and related topics at the College of International Affairs of NCCU.

Photo of Thad McBride Thad McBride

Thad McBride advises public and private companies on the legal considerations essential to successful business operations in a global marketplace. He focuses his practice on counseling clients on compliance with U.S. export regulations (ITAR and EAR), economic sanctions and embargoes, import controls (CBP)…

Thad McBride advises public and private companies on the legal considerations essential to successful business operations in a global marketplace. He focuses his practice on counseling clients on compliance with U.S. export regulations (ITAR and EAR), economic sanctions and embargoes, import controls (CBP), and the Foreign Corrupt Practices Act (FCPA). He also advises clients on anti-boycott controls, and assists companies with matters involving the Committee on Foreign Investment in the United States (CFIUS). Thad supports international companies across a range of industries, including aviation, automotive, defense, energy, financial services, manufacturing, medical devices, oilfield services, professional services, research and development, retail, and technology. Beyond advising on day-to-day compliance matters, Thad regularly assists clients in investigations and enforcement actions brought by government agencies, including the U.S. Department of Justice (DOJ), the U.S. Treasury Department Office of Foreign Assets Control (OFAC), the U.S. State Department Directorate of Defense Trade Controls (DDTC), Customs and Border Protection (CBP), the U.S. Commerce Department Bureau of Industry & Security (BIS), and the Securities & Exchange Commission.

Photo of Sylvia Yi Sylvia Yi

Sylvia Yi represents businesses across a broad range of sectors as they move through the contracting process with federal, state and local governments, and when they engage in international transactions. Sylvia counsels public and private companies on day to day compliance challenges, and…

Sylvia Yi represents businesses across a broad range of sectors as they move through the contracting process with federal, state and local governments, and when they engage in international transactions. Sylvia counsels public and private companies on day to day compliance challenges, and supports clients in responding to criminal and government investigations. She is a regular contributor to the firm’s Government Contracts & International Trade Blog, where she provides insight on the demanding and ever-changing regulatory environment.