This UPDATED post summarizes the situation as of late evening on Monday, March 7, 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 is available here; and our post of late evening Thursday March 3, which is available here

U.S. State Department Targets Russian Defense Enterprises for Sanctions

The U.S. State Department has identified 22 Russian defense-related entities that design, develop, and produce weaponry for Russia. Each has been designated as a Specially Designated National (SDN) by the U.S. Treasury Department, Office of Foreign Assets Control (OFAC). The designated entities include companies involved in the design, development, and production of unmanned aerial vehicles, electronic warfare, missile and missile defense systems, fighter aircraft, armored vehicles, and procurement of foreign technology for Russia’s military.

As SDNs, all property and interests in property of these entities that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entity that is owned, directly or indirectly, 50% or more by one or more blocked persons is also considered an SDN, even if the entity is not specifically identified on the SDN List. Generally speaking, U.S. entities and individuals are prohibited from conducting any transaction with an SDN, including providing to or receiving from an SDN any funds, goods, or services.

Commerce Adds South Korea to the List of Countries Exempt from the Licensing Requirement Under the FPD Rule for Russia and Belarus

On March 4, the U.S. Department of Commerce (Commerce) added South Korea as one of the countries exempt from the licensing requirement under the Foreign-Produced Direct Product (FDP) Rule for Russia and Belarus. With the addition of South Korea, there are now 33 countries exempt from FDP Rule license requirements to Russia and Belarus.

Commerce stated that the addition was due to South Korea’s commitment to implement substantially similar export controls on Russia and Belarus under its domestic laws as those the United States has implemented. The exclusion for South Korea pertains to a new Russia license requirement enacted by Commerce to restrict exports to Russia, especially Russian military end-users, of foreign direct products of U.S. technology. A similar rule was also introduced with respect to Belarus.

For further details on the expansion of the FDP Rule, please refer to our posts from February 25 (related to Russia) and March 3 (related to Belarus).

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.

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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.