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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions