Worldwide: Overview Of The U.S. And EU Sanctions On Russia


Over the past six months, the United States and the European Union have coordinated efforts through sanctions and trade controls to respond to Russian activity in Crimea and Ukraine. Following a long series of incremental changes to the sanctions and trade controls by the respective government authorities ( which are described in detail in our regular client alerts), this alert provides a summary of the state of U.S. and EU sanctions on Russia as of September 24, 2014.

As described in more detail below, there is a high level of consistency between the sanctions and trade controls to include a similar approach to: asset freezes; controls on financing directed at the oil, gas, energy, and defense industries; restrictions on access to capital markets; controls on goods and services for the Russian military and other military end users in Russia; and controls on certain dual use items. However, there continue to be some nuanced differences

between the two approaches, including variance in the persons subject to asset blocks, differences on the controls applicable to imports and investments in infrastructure, and how the specific prohibitions are implemented by the respective government agencies.

United States

The U.S. sanctions on Russia are focused on the financial services, energy, and defense industries. The sanctions contain a variety of targeted prohibitions that have increasingly expanded the scope of the sanctions program, to include:

  • Designating or blocking certain Russian individuals and entities, and an important change in the Office of Foreign Assets Control ("OFAC") policy on entities owned by blocked persons
  • Limiting the availability of debt financing for certain Russian financial institutions
  • Prohibiting the provision of goods, services, and technology in support of certain activities relating to the exploration or production of oil or gas in Russia, its claimed maritime area, or "extending from its territory"
  • Restrictions on the supply of certain items (a) to the Russian military or other military end-users in Russia; and (b) for use in oil or gas exploration or production in Russia, including Arctic offshore locations or shale formations
  • Restrictive licensing policies for export activities involving Russian-made defense articles (including spacecraft) and defense articles intended for end-use in Russia

The sanctions include both economic measures administered by OFAC and export controls administered by the U.S. Department of Commerce, Bureau of Industry and Security ("BIS"), and the U.S. Department of State, Directorate of Defense Trade Controls ("DDTC").

The current status of these controls is addressed in more detail below:

  1. OFAC Sanctions On July 16, 2014 and September 12, 2014, OFAC issued a series of Directives imposing targeted sanctions upon key elements of the Russian economy. Each Directive governs activities between U.S. persons (to include any person within the United States) and those persons listed on the Sectoral Sanctions Identifications ("SSI") List. The SSI List is organized according to the four Directives. See Unlike the Specially Designated Nationals ("SDN") List, which includes blocked persons and prohibits substantially all activity with so-called SDNs, the SSI List designations result in prohibitions that are limited to those activities targeted by the Directives.

    As an aside, OFAC also recently revised its policy on entities that are owned by SDNs and SSI List persons to extend the designations to entities owned 50 percent or more by one or more persons on the SDN or SSI List.

    The four Directives are as follows:

    • Directive 1 targets the financial services sector of the Russian economy. This directive prohibits engaging in transactions in, providing financing for, or otherwise dealing in new debt with a maturity of longer than 30 days, or equity for persons identified on the SSI List under Directive 1.
    • Directive 2 targets Russia's energy sector of the Russian economy by prohibiting transactions in, provision of financing for, and other dealings in new debt with a maturity of longer than 90 days for persons identified on the SSI List under Directive 2. equity for persons identified on the SSI List under Directive 1.
    • Directive 3 targets the Russian defense and related material sector by prohibiting all transactions in, provision of financing for, and other dealings in new debt of longer than 30 days for persons identified on the SSI List under Directive 3.
    • Directive 4 expands on the sanctions targeting the Russian energy sector by prohibiting "the provision, exportation, or reexportation, directly or indirectly, of goods, services (except for financial services), or technology in support of exploration or production for deepwater, Arctic offshore, or shale projects that have the potential to produce oil in the Russian Federation, or in maritime area claimed by the Russian Federation and extending from its territory" that involve any person identified on the SSI List under Directive OFAC has also issued General Licenses authorizing certain transactions relating to derivative products (relevant to SSI List entities under Directives 1-3) and a short wind-down period (relevant to Directive 4).
  2. Commercial and Dual-Use Controls (the Export Administration Regulations) On August 6, 2014, BIS amended the Export Administration Regulations ("EAR") to include the "Russian Industry Sector Sanctions" as section 746.5. These sanctions impose a license requirement for the export to Russia of certain items if the exporter, reexporter, or transferor knows that the item "will be used directly or indirectly in exploration for, or production of, oil or gas in Russian deepwater (greater than 500 feet) or Arctic offshore locations or shale formations in Russia, or are unable to determine whether the item will be used in such projects." The items subject to this license requirement include items classified under the following Commerce Control List ECCNs: 0A998, 1C992, 3A229, 3A231, 3A232, 6A991, 8A992, 8D999, as well as EAR99 items identified in Supplement No. 2 to Part 746. BIS also established a policy of denial for such license applications. BIS further imposed a license requirement (subject to a policy of denial) for all exports, reexports, or transfers to Russia of items subject to the EAR if intended, in whole or in part, for a military end-use or military end-user in Russia.
  3. Military/Defense Controls (the International Traffic in Arms Regulations) On March 27, 2014, DDTC placed a hold on the issuance of International Traffic in Arms Regulations ("ITAR") licenses for the export of defense articles and defense services to Russia. Subsequently, on April 28, 2014, DDTC changed its hold on licenses to a policy of denial for defense articles or defense services to Russia or occupied Crimea. DDTC also began the process of revoking existing licenses for defense articles and services. DDTC is currently reviewing defense article export licenses on a case-by-case basis to determine the export's contribution to Russia's military.

European Union

As tensions rose in the Ukraine and Crimea, and in the absence of de-escalatory steps by the Russian Federation, the EU began imposing sanctions in March 2014. As with the sanctions imposed by the United States, these have expanded in scope to include:

  • Sanctions targeting individuals and entities through travel bans and asset freezes
  • Measures dealing with access to the capital markets for specified financial and defense institutions
  • Restrictions on the export of dual-use goods and technologies
  • Restrictions on dealing with technologies listed on the Common Military List
  • Restrictions on dealing with goods and services related to the oil industry

Below is a summary of the current restrictions:

  1. Travel Bans and Asset Freezes In March, the EU introduced measures to restrict the travel and freeze the assets of individuals and entities responsible for actions undermining or threatening the sovereignty of the Ukraine (by Council Regulation (EU) No 269/2014). At that time, 21 names were added to the list. The list has twice since been updated, to include an additional 36 names (by Council Implementing Regulation (EU) No 284/2014 and Council Implementing Regulation (EU) No 961/2014). The individuals subject to restrictions under the U.S. and EU regimes have not always been consistent, and so it is necessary to separately track the individuals restricted.
  2. Access to Capital Markets and Loans As in the United States, the EU has imposed restrictions on financial dealings with certain named entities operating in the Russian financial and defense industries. While these restrictions fall short of an absolute prohibition on dealings with such entities, they do place substantial limitations on transactions involving transferable securities and money market instruments when issued by them.

    "Transferable securities" is widely defined and includes shares in companies; other securities equivalent to shares in companies, partnerships or other entities; and bonds or other forms of securitized debt, such as depositary receipts. In addition, any securities giving the right to acquire or sell any such instrument are covered. Similarly, "money market instruments" includes classes of instruments that are normally dealt in on the money market, particularly treasury bills, certificates of deposit and commercial papers.

    The first restrictions targeting financial institutions were introduced in July. At that time, it was prohibited to deal with transferable securities and money-market instruments with a maturity exceeding 90 days when issued by the named institutions set out in our client alert available here. [ client alert 14-241]

    However, this restriction has recently been tightened so that in relation to any transferable securities or money-market instruments issued after September 12, 2014, the maximum maturity period is now 30 days.

    A mirroring provision was introduced in September dealing with such securities or instruments with a maturity exceeding 30 days when issued by certain defense companies and crude oil and petroleum transport companies. The entities covered by this prohibition are set out fully in our client alert available here. [ client alert 14-241]

    In addition to the above, it is prohibited to make available any new loans or credit exceeding 30 days to any of the entities covered by the restrictions outlined above.
  3. Dual-use Goods and Technologies In July, restrictions were introduced on the export or sale of certain dual-use goods and technologies, and the provision of related services to any entity or body in Russia, or for use in Russia, if those items are or may be intended, in part or otherwise, for military use or for a military end-user (by Council Regulation (EU) No 833/2014). However, prior authorization can be sought from competent authorities in limited cases where authorities have no reasonable grounds to believe that the end-user might be a military end-user, or that the goods might have a military end-use. In addition, and with no provision for gaining prior authorization, brokering services related to such dual-use goods and technology, and the provision of financing or financial assistance, are prohibited where the items are intended for military use or a military end-user.

    In September 2014, a further restriction was imposed (by Council Regulation (EU) No 960/2014) on the export or sale of certain dual-use goods and technologies, or the provision of brokering or other services, or the arranging of finance or financial assistance for such goods or services, when provided to specific entities listed in our client alert available here. [ client alert 14-241] As a result, any entity supplying such goods and technologies should carefully consider the existing sanctions to ensure that they are in compliance with their provisions.
  4. The Common Military List In July, the EU imposed a restriction on providing technical assistance or financing in relation to goods and technologies listed in the Common Military List. This restriction applies to any dealings with a natural or legal person, entity or body in Russia, or for use in Russia.
  5. The Oil Industry There are two layers of restrictions in relation to the oil industry in Russia. In July, restrictions were introduced on the export or sale of certain technologies suited to the oil industry for use in deep water oil exploration and production, Arctic oil exploration and production, or shale oil projects in Russia. This restriction applies to any goods, whether or not originating in the EU, when supplied to any natural or legal person, entity or body in Russia, or, if supplied to any other country, if such equipment or technology is for use in Russia. A prior authorization is required to undertake any of these activities, as in the United States, and shall not be granted in the event that a competent authority has reasonable grounds to determine that such technologies are for use in projects of the type outlined above. Restrictions are also imposed on the provision of technical assistance, brokering services, or financing or financial assistance, in relation to these technologies.

    In September 2014, the EU introduced a further prohibition on providing services, including drilling, well testing, logging and completion services, and the supply of specialized floating vessels for projects of the above types in Russia. This is an absolute prohibition, with no ability to apply for a prior authorization. However, a grace period was given for contracts concluded up to September 12, 2014.

    These restrictions are substantially similar to those implemented by the United States under Directive 4, outlined above.

This article is presented for informational purposes only and is not intended to constitute legal advice.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.