In coordination with other G7 countries, the United States announced another significant round of sanctions and export control restrictions on Russia on Sunday, May 8. These include a new ban on the provision of certain services to Russia, new export controls, and sanctions on Russia's media and financial sectors, and further additions to the Office of Foreign Assets Control (OFAC) Specially Designated National (SDN) List.

Services Ban

The United States announced new sanctions on Russia that will prohibit the direct or indirect export, reexport, sale, or supply of accounting, trust and corporate formation, and management consulting services to any person in Russia. The new sanctions will not apply to services provided to entities in Russia that are owned or controlled by a U.S. person or to services provided in connection with the wind down or divestiture of an entity located in Russia that is not owned or controlled by a Russian person. In a new FAQ, OFAC indicates that it intends to issue regulations defining a "Russian person" to be individuals who are Russian citizens or nationals and entities organized under Russian law.

OFAC defines the sanctioned services as the following:

  • "'Accounting service' – includes services related to the measurement, processing, and transfer of financial data about economic entities.
  • 'Trust and corporate formation services' – includes services related to assisting persons in forming or structuring legal persons, such as trusts and corporations; acting or arranging for other persons to act as directors, secretaries, administrative trustees, trust fiduciaries, registered agents, or nominee shareholders of legal persons; providing a registered office, business address, correspondence address, or administrative address for legal persons; and providing administrative services for trusts. Please note that all of these activities are common activities of trust and corporate service providers (TCSPs), although they may be provided by other persons.
  • 'Management consulting services' – includes services related to strategic advice; organizational and systems planning, evaluation, and selection; marketing objectives and policies; mergers, acquisitions, and organizational structure; staff augmentation and human resources policies and practices; and brand management."

The new sanctions are imposed pursuant to E.O. 14071 and will take effect on June 7, 2022.

Concurrent with the new sanctions, OFAC issued two general licenses temporarily authorizing the continued provision of certain services to Russia. General License No. 34 authorizes transactions ordinarily incident and necessary to wind down the provision of sanctioned services to Russia until 12:01 am EDT on July 7, 2022. General License No. 35 authorizes the export of credit rating and auditing services to Russia until 12:01 am EDT on August 20, 2022. Neither general license authorizes dealings with SDNs or other blocked parties.

OFAC also issued a determination pursuant to E.O. 14024 that allows the agency to designate persons that operate or have operated in the accounting, trust and corporate formation services, or management consulting sectors of the Russian economy as SDNs in the future. A new FAQ provides definitions for each sector.

New Industrial Export Controls

As announced on Sunday, the U.S. Commerce Department's Bureau of Industry and Security (BIS) issued a final rule today to expand export controls on equipment and other items that widely used by Russian industry. The final rule imposes a U.S. license requirement on exports, reexports, and transfers of hundreds of common industrial and commercial items, including "wood products, industrial engines, boilers, motors, fans, and ventilation equipment, bulldozers, and many other items with industrial and commercial applications." In total, 205 HTS codes at the six-digit level and 478 corresponding 10-digit Schedule B numbers were added to Supplement No. 4 to Part 746 of the EAR, which lists items subject to Russian industry sector export controls. BIS will review license requests for exports, reexports, and transfers of such items pursuant to a policy of denial, unless the proposed shipments are necessary for health and safety reasons or to meet humanitarian needs.

The U.S. Nuclear Regulatory Commission (NRC), which administers export controls on more sensitive nuclear items, will also suspend general licenses that previously permitted export of source material, special nuclear material, byproduct material, and deuterium to Russia.

Sanctions on Russian Media Outlets

On Sunday, OFAC designated three major Russian state-owned media outlets as SDNs: Joint Stock Company Channel One Russia, Television Station Russia-1, and Joint Stock Company NTV Broadcasting Company. OFAC amended General License No. 25A to prevent the general license from being used to provide telecommunications and internet communications services, software, hardware, or technology to the newly designated SDNs.

Additional SDNs

OFAC also designated as SDNs Moscow Industrial Bank (MIB) and ten MIB subsidiaries, 27 members of Gazprombank's Board of Directors, eight current or recent members of SDN Sberbank's Executive Board, seven shipping companies, one marine towing company, and Russian defense company Limited Liability Company Promtekhnologiya. As of the date of the designations, all dealings with these persons are prohibited without authorization from OFAC and the property and interests in property of these persons must be formally blocked and reported to OFAC.

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