On the one-year anniversary of Russia's invasion of Ukraine, the United States issued a comprehensive set of new economic sanctions intended to further isolate Russia from the international economy and hinder its ability to obtain capital, materials, technology and support for the war in Ukraine.
What you need to know
- The new U.S. sanctions apply to multiple sectors of the Russian economy.
- The metals and mining sector received particular attention in the newly announced sanctions, with a policy allowing sanctions on anyone operating in the sector.
- Also announced were new tariffs on 100 Russian metals, minerals and chemical products worth about $2.8 billion.
- Nearly 90 Russian and third-country companies were added to the Department of Commerce's "Entity List", which will prohibit the listed companies from purchasing some items made in the United States or containing U.S. components.
The new sanctions
Full blocking sanctions have been imposed on 22 individuals and 83 entities across a broad swath of the Russian economy, including financial services, wealth management, aerospace, electronics and metals and mining. The United States has also designated more than 30 individuals and companies outside of Russia that have assisted Russia to evade previous U.S. sanctions.
Additionally, in what the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) describes as "one of its most significant sanctions actions to date", it has authorized the imposition of sanctions on any person determined to operate, or have operated, in the metals and mining sector of the Russian economy. To be clear, this does not mean that every individual and business in the Russian metals and mining sector is now sanctioned. It does, however, materially increase the risk that such persons will be sanctioned and serves as a warning to anyone who currently does business with Russian metals and mining companies.
OFAC articulates that the metals and mining sector of the Russian economy includes:
- any act, process or industry of extracting—at the surface or underground—ores, coal, precious stones or any other minerals or geological materials in Russia; or
- any act of procuring, processing, manufacturing or refining such geological materials or transporting them to, from or within Russia.
As it has done with previous sanctions imposed in connection with Russia's invasion of Ukraine, OFAC expressly cautions non-U.S. persons that they may be exposed to sanctions for activities with individuals who are subsequently blocked because they operate, or have operated, in the Russian metals and mining sector.
In guidance issued together with the authorization concerning Russia's metals and mining sector, OFAC states that it does not intend to target persons for operating in a sector where the provision of goods or services is solely for the safety and care of personnel, protection of human life, prevention of accidents or injuries, maintenance or repair necessary to avoid environmental or other significant damage, or activities related to environmental mitigation or remediation. Examples of such goods include personal protective equipment, safety devices, ventilation systems and alarm systems, while examples of such services include rescue and accident response services, cleaning, safety inspections and services ancillary to the goods referred to above.
Together with the sanctions announced on February 24, 2023, the United States will increase tariffs on more than 100 Russian metals, minerals and chemical products worth approximately $2.8 billion to Russia. It will also increase, by up to 270%, the costs for aluminum that was smelted or cast in Russia to enter the U.S. market. The U.S. Department of Commerce further added nearly 90 Russian and third-country companies, including companies in China among other countries, to its "Entity List", which will prohibit the listed companies from purchasing items, such as semiconductors and software made in the United States or made abroad and containing U.S. components.
We will continue to monitor further developments concerning the U.S. sanctions of Russia.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.