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 late evening on Tuesday, March 8 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.
President Biden Issues Executive Order, Bans Imports of Russian Oil and Gas
On March 8, President Biden issued an Executive Order (EO) banning the importation into the United States of the following Russian-origin products:
- Crude oil.
- Petroleum fuels, oils, and products of their distillation.
- Liquefied natural gas.
- Coal and coal products.
The EO also prohibits U.S. persons from new investment in the energy sector in Russia.
In addition, the EO explicitly prohibits U.S. persons from facilitating any prohibited transaction by a non-U.S. person. This is the traditional prohibition against facilitation included in most U.S. sanctions regulations. It effectively prohibits a U.S. person from doing something indirectly that the person cannot do directly.
In connection with the EO, the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) posted several Frequently Asked Questions pertaining to the scope of the EO. Among other things, these FAQs make clear that the focus is on products from and investment in Russia itself. For example, at least under the EO, it appears that non-Russian crude oil could be purchased from a Russian seller – so long as that seller was not itself subject to U.S. sanctions.
There is no effective date in the EO, so the prohibitions presumably take immediate effect. However, concurrent with issuance of the EO, OFAC issued Russia General License No. 16 (GL 16). Under the terms of GL 16, until 12:01 a.m. on April 22, 2022, all import transactions otherwise prohibited by the EO are permitted so long as those transactions are undertaken pursuant to written contracts or agreements that were in place prior to March 8, 2022. Note that GL16 does not authorize transactions with blocked Russian entities, nor does it apply to new investment in the energy sector of Russia.
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:
- Monday, March 7
- Thursday, March 3
- Monday, February 28
- Friday, February 25
- Thursday, February 24
- Wednesday, February 23