Washington, D.C. (September 22, 2023) – In a move aimed at undermining Russia's workarounds to evade sanctions thus far, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) recently imposed nearly 100 new sanctions on Russia's industrial base, financial institutions, and technology suppliers. The Department of State has also designated more than 70 individuals.
The sanctions target individuals and entities benefiting from, supporting, and sustaining Russia's war against Ukraine. They focus on Russian elites and firms connected to Russia's defense sector and military-industrial complex. The sanctions include designations of Russian oligarchs, manufacturing companies, and technology supply chain entities.
The following is a list of the impacted entities and individuals:
- Transmashholding JSC rolling stock producer, its former President Andrei Bokarev, his business partner Iskandar Makhmudov — the founder of the previously sanctioned Urals Mining and Metallurgical Company — and Makhmudov's son Dzhakhangir Iskandarovich Makhmudov;
- Automotive producers Avtovaz, Moskvich, Sollers, and previously designated GAZ Group;
- United Metallurgical Company, a steel pipe producer.
- Siberica Oy (Siberica) and Luminor Oy (Luminor), two Finnish logistics firms, have been sanctioned for shipping electronics to Russia-based end-users.
- OFAC sanctioned Russian national Andrei Rostislavovich Khokhlun (Khokhlun), the owner and director of Ak Microtech, a company that had previously faced sanctions. Ak Microtech specializes in facilitating the transfer of foreign semiconductor technology to Russian microelectronics production firms. Additionally, OFAC designated two companies owned by Khokhlun: Limited Liability Company Keko R and Slovenia-based Arktec Tehnologije na Podrocju Elektronike doo.
- More than 30 other entities operating in Russia's electronics or technology sectors.
- Aerospace-related entities, including Open Joint Stock Company Aero Engine Scientific and Technical Complex Soyuz (Soyuz) and Open Joint Stock Company Balashikhinskiy Liteyno Mekhanicheskiy Zavod (Balashikha), have been targeted.
- One of Russia's largest producers of military and commercial gas turbine engines, ODK Saturn, has also been listed.
- In a bid to restrict Russia's access to the international financial system, two additional Russian banks (Ak Bars Bank and Sinko Bank) and several wealth management consulting, auditing, and investment firms have been designated.
Impact of Sanctions
These sanctions are expected to disrupt Russia's defense and
industrial sectors by targeting key figures and entities associated
with them. For instance, the designation of Transmashholding JSC
and its subsidiaries is significant, given its involvement in
producing military equipment.
The sanctions also aim to curtail Russia's revenue from extractive industries, demonstrated by the designation of several entities involved in oil and gas exploration, equipment manufacturing, and mineral processing, including five companies involved in the Arctic LNG2 project, including Arctic Transshipment LLC, LLC Carbon and JSC Vorkutaugol.
The U.S. sanctions on Russian defense, industrial, and technology sectors have global implications, affecting not only Russian entities but also international businesses and financial institutions. OFAC is clearly expanding the list of Russian and other entities to crack down on sanctions evasion. Businesses and investors must carefully monitor the evolving sanctions landscape to navigate potential risks and compliance requirements effectively.
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