On April 12, 2023, the US Department of the Treasury’s Office of Foreign Assets Control, in coordination with UK authorities, imposed sweeping financial sanctions targeting those who facilitate international financial transactions on behalf of Russian oligarchs, including the network of Russian billionaire Alisher Burhanovich Usmanov, who was previously designated by the US and UK in March of 2022. The new designations, imposed by OFAC pursuant to Executive Order 14024, target a total of 25 individuals and 29 entities across 20 jurisdictions. The US Department of State also contemporaneously designated more than 80 individuals and entities that operate in the Russia’s defense sector and support Russia’s war with Ukraine, while the US Department of Commerce will reportedly take concurrent action to add 28 related entities to its Entity List.
OFAC reports that Usmanov is known to have close relationships with several senior Russian officials, including Russian President Vladimir Putin, and has enabled Dmitry Medvedev, the current Deputy Chairman of the Security Council of Russia, to use luxury residences that he controls. According to OFAC, Usmanov, who has significant interests in Russia’s metals and mining, telecommunications, and information technology sectors, has the potential to circumvent sanctions by utilizing a network of businesses and family members located in financial safe havens who could conduct prohibited transactions on his behalf. Among the OFAC designees with ties to Usmanov is Demetrios Serghides, a financial advisor who handles various financial transactions for Usmanov and his family members, and serves as the protector of The Sister Trust, a trust settled by Usmanov and his sister. Consequently, OFAC designated The Sister Trust, several companies linked to The Sister Trust, and Usmanov’s sister Gulbakhor Burkhanovna Ismailova. OFAC also designated Usmanov’s Cyprus network, several executives of companies controlled by Usmanov, and Usmanov’s stepson Natan Adadievich Viner along with several Moscow-based firms that he owns or controls.
Other OFAC designees include the International Investment Bank (“IIB”), a Hungary-based financial institution that is controlled by Russia and enables Russia to increase its intelligence presence in Europe, and certain companies based in the People’s Republic of China, Türkiye, and the United Arab Emirates that have reportedly assisted Russia’s military-industrial complex with the procurement of electronics.
As a result of the OFAC designations, all property and interests in property of these designees within the United States or within the possession or control of a US person are blocked, and US persons are generally prohibited from engaging in transactions involving the designated persons. In addition, entities owned 50 percent or more by one or more designated persons are also blocked, unless they are exempt or transactions are authorized by a general or specific license issued by OFAC. In an effort to further limit Usmanov’s network, OFAC revoked a general license, issued 4 new Russia-related general licenses, and published a new Frequently Asked Question. Specifically, OFAC revoked Russia-related GL 15, which once authorized transactions involving entities owned 50 percent or more by Usmanov that were not listed on OFAC’s Specially Designated Nationals and Blocked Persons List, in order to ensure that any entity owned 50 percent or more by Usmanov is now blocked. OFAC also issued GL 62 and GL 63 to temporarily authorize wind down transactions with several newly-designated entities, with certain telecom-related exemptions provided in GL 65. OFAC also issued GL 64 to authorize certain transactions with Kommersant, a newspaper that Usmanov controls and issued FAQ 1122 to provide general guidance on how GL 65 has affected the provisions in GL 25C.
On April 12, 2023, UK Foreign Secretary James Cleverly also announced sanctions targeting 14 enablers that knowingly hid money for sanctioned Russian oligarchs to help them avoid the full cost of sanctions. All of the UK’s designations were imposed pursuant to The Russia (Sanctions) (EU Exit) Regulations 2019 (SI 2019/855), which subject the designees to asset freezes. The UK designated members of Usmanov’s financial network, including USM, Curzon Square Limited and Hanley Limited, while Cleverly specifically announced the designations of 2 Cypriot “financial fixers,” Demetris Ioannides and Christodoulos Vassiliades, for supporting previously-designated Putin allies Usmanov and Roman Abramovich. Other UK designees include Vladimir and Varvara Skoch, the father and daughter of Usmanov’s previously-designated business partner Andrei Skoch. The UK also targeted several family members of sanctioned Russian oligarchs who have been used as proxies to hide wealth, including Tatiana Evtushenkova, Natalia Evtushenkova, and Felix Evtushenkov, respectively, the daughter, wife, and son of previously-sanctioned Vladimir Evtushenkov, the founder of Russian conglomerate AFK Sistema PAO.
US Department of Treasury Press Release | US Department of Treasury Recent Action | US Department of State Press Statement | UK Government Press Release | OFSI Financial Sanctions Notice – Russia