We previously discussed sanctions measures that have been enacted in several jurisdictions as a response to the conflict in Ukraine on February 4, February 23, February 25, February 28, March 3, March 8, and March 9. This post provides an update regarding further Russia-related sanctions measures in the United States.

Issuance of Another Russia-Related Executive Order

On March 11, 2022, President Biden issued an Executive Order (the "E.O. of March 11, 2022") imposing new prohibitions on certain imports, exports, and new investments concerning Russia. Specifically, the E.O. of March 11, 2022 prohibits the following activities:

  • The importation into the U.S. of the following products of Russian origin: fish, seafood, and preparations thereof; alcoholic beverages; non-industrial diamonds; and any other products of Russian origin as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State and the Secretary of Commerce;
  • The exportation, reexportation, sale, or supply, directly or indirectly, from the U.S., or by a U.S. person, wherever located, of luxury goods, and any other items as may be determined by the Secretary of Commerce, in consultation with the Secretary of State and the Secretary of the Treasury, to any person located in Russia;
  • New investment in any sector of the Russian economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, by a U.S. person, wherever located;
  • The exportation, reexportation, sale, or supply, directly or indirectly, from the U.S., or by a U.S. person, wherever located, of U.S. dollar-denominated banknotes of the Russian Government or any person located in Russia; and
  • Any approval, financing, facilitation, or guarantee by a U.S. person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by sections 1(a)(i)-(iv) of E.O. of March 11, 2022 if performed by a U.S. person or within the U.S.

Issuance of New General Licenses

On the same day, the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC") issued the following General Licenses ("GLs"):

  • GL 17 authorizes all transactions prohibited by the E.O. of March 11, 2022 through March 25, 2022, that are ordinarily incident and necessary to the importation into the U.S. of fish, seafood, and preparations thereof; alcoholic beverages; or non-industrial diamonds of Russian origin pursuant to written contracts or written agreements entered prior to March 11, 2022.
  • GL 18 authorizes all transactions prohibited by section 1(a)(iv) of the E.O. of March 11, 2022 that are ordinarily incident and necessary to the transfer of U.S. dollar-denominated banknote noncommercial, personal remittances from: (i) the U.S. or a U.S. person, wherever located, to an individual located in Russia; or (ii) a U.S. person who is an individual located in Russia. It also notes that noncommercial, personal remittances do not include charitable donations to or for the benefit of an entity or funds transfers for use in supporting or operating a business, including a family-owned business.
  • GL 19 authorizes individuals who are U.S. persons located in Russia to engage in all transactions prohibited by section 1(a)(iv) of the E.O. of March 11, 2022 that are ordinarily incident and necessary to their personal maintenance within Russia, including payment of housing expenses, acquisition of goods or services for personal use, payment of taxes or fees, and purchase or receipt of permits, licenses, or public utility services.
  • Ukraine-related GL 23 authorizes all transactions prohibited by O. 14065 that are ordinarily incident and necessary to activities by nongovernmental organizations supporting (i) humanitarian projects to meet basic human needs; (ii) democracy building; (iii) education; (iv) non-commercial development projects; and (v) environmental and natural resource protection, conducted in the Donetsk People's Republic or Luhansk People's Republic regions of Ukraine, or such other regions of Ukraine as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State.

Additional Guidance and Clarifications

OFAC also issued substantial guidance related to old and new sanctions measures announced by the U.S. government. In particular, OFAC updated one Frequently Asked Question ("FAQ"), and issued the following new FAQs:

  • FAQ 1,021 clarifies that the prohibitions of O. 14024 and other Russia-related sanctions extend to virtual currency.
  • FAQ 1,022 clarifies the activities prohibited by the E.O. of March 11, 2022.
  • FAQ 1,023 clarifies the authorizations in GL 17. It also clarifies that the E.O. of March 11, 2022 does not prohibit transactions such as the unwinding of contracts or other business-related activities by U.S. persons to comply with the import ban, and does not prohibit U.S. persons from engaging in transactions to sell or re-direct shipments outside the U.S. of prohibited imports previously destined for the U.S.
  • FAQ 1,024 clarifies that the prohibitions in the E.O. of March 11, 2022 on the importation into the U.S. of fish, seafood, and preparations; alcoholic beverages; and non-industrial diamonds of Russian origin, does not prohibit U.S. persons from engaging in transactions to sell or re-direct shipments outside the U.S. that were previously destined for the U.S. It also states that OFAC may issue specific licenses on a case-by-case basis to authorize shipments occurring after the expiration of GL 17 or for other activity outside the scope of GL 17.
  • FAQ 1,025 clarifies that Russia-related GL 6 remains valid and authorizes, among other things, transactions ordinarily incident and necessary to (1) the exportation and reexportation of agricultural commodities, including products such as fish, seafood, or preparations thereof - to the extent they fall within the definition of agricultural commodities provided in GL 6 - to, from, or transiting Russia. However, GL 6 does not authorize any transactions prohibited by the E.O. of March 11, 2022.
  • FAQ 1,026 clarifies that, to the extent the import of fish, seafood, and preparations thereof; alcoholic beverages; and non-industrial diamonds of Russian origin to jurisdictions outside of the U.S. does not involve a sanctioned person or an otherwise prohibited transaction, non-U.S. persons are not exposed to sanctions under the E.O. of March 11, 2022.
  • FAQ 1,027 states that OFAC anticipates publishing regulations defining certain terms in the E.O. of March 11, 2022, including "Russian Federation origin," "fish, seafood, and preparations thereof," "alcoholic beverages," and "non-industrial diamonds."
  • FAQ 1,028 clarifies the authorizations of GL 18. It also clarifies that GL 18 authorizes methods of payment including withdrawals of U.S. dollar-denominated banknotes via automated teller machines and the hand carrying of U.S. dollar-denominated banknotes. It does not authorize U.S. financial institutions to process transactions for the provision of U.S. dollar-denominated banknotes to foreign financial institutions for further distribution or supply to the Russian Government or any person located in Russia.

New Designations to OFAC's SDN List

OFAC "issued a new round of sanctions targeting Russian and Kremlin elites, oligarchs, and Russia's political and national security leaders who have supported Russian Vladimir Putin's brutal and illegal invasion of Ukraine." In particular, OFAC added the following to its SDN List:

  • Three immediate family members of President Putin's spokesperson, Dmitriy Peskov;
  • "Russian tycoon and Kremlin insider," Viktor Vekselberg;
  • VTB Bank's Management Board; and
  • Vyacheslav Volodin and other members of the Russian State Duma.

The OFAC press release is available here.

OFAC also sanctioned two individuals and three entities "that aid a DPRK defense industry-related procurement agent in Russia," and, in turn, "support[] the DPRK's ongoing development of its weapons of mass destruction (WMD) and ballistic missile programs in violation of multiple United Nations Security Counsel resolutions." The OFAC press release is available here.

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