On February 23, 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control announced the imposition of more than 300 Russia-related sanctions to mark the two-year anniversary of Russia’s war in Ukraine and the death of opposition politician Aleksey Navalny on February 16, 2024. When combined with contemporaneous sanctions imposed by the Department of State, including the designation of three Russian officials involved in Navalny’s death, the United States sanctioned more than 500 targets, the largest number of sanctions designations imposed since Russia’s invasion of Ukraine. In addition to the designations, the Department of Commerce added more than 90 companies to its Entity List.
The sanctions imposed by OFAC are aimed at preventing Russia from accessing the resources needed to support the war in Ukraine, and target Russia’s military-industrial base and other key sectors, including engineering, electronics, metals and mining, and transportation. Among these, OFAC targeted the Alabuga procurement network, which has allegedly enabled Russia to acquire and produce unmanned aerial vehicles (“UAVs”) with the help of Iran’s Ministry of Defense and Armed Forces Logistics (“MODAFL”). For example, one of the designees is Joint Stock Company Special Economic Zone of Industrial Production Alabuga, a Russia-based company that allegedly maintains a contract with the Russian military to assemble UAVs shipped from Iran. OFAC also targeted Sovcomflot, Russia’s largest shipping company. In addition, OFAC targeted individuals and entities, including third-country facilitators outside of Russia that enable Russia to evade sanctions and obtain critical technology and equipment needed to sustain the war in Ukraine. In total, OFAC designated 26 such persons across 11 countries, including the People’s Republic of China, Serbia, the United Arab Emirates, and Liechtenstein.
OFAC issued these designations pursuant to EO 14024, which provides for the designation of individuals or entities that operate in a key sector of the Russian economy. As a result of these designations, all property and interests in property of the designated persons within the United States or within the possession or control of a U.S. person are blocked, and U.S. persons are generally prohibited from engaging in transactions involving a designated person. Entities owned 50 percent or more by one or more blocked persons are also blocked.
In parallel with the new designations, OFAC issued four general licenses pursuant to the Russian Harmful Foreign Activities Sanctions Regulations (“RuHSR”), 31 CFR part 587. Three general licenses were issued to authorize, until April 8, 2024, certain wind down transactions involving certain newly-designated companies (GL 88); certain newly-designated financial institutions (GL 89); and certain transactions related to the divestment or transfer of debt or equity issued by or guaranteed by newly blocked entities (GL 90). OFAC issued a fourth general license to authorize limited safety and environmental transactions involving newly blocked persons or vessels (GL 91) until May 23, 2024.
OFAC also issued Frequently Asked Questions 1164, 1165 and 1166 in order to clarify the prohibitions on the importation of Russian diamonds into the United States under the RuHSR program and the recent Diamond Jewelry Determination and Diamonds Determination issued on February 8, 2024 under Executive Order 14068, both of which will take effect on March 1, 2024. OFAC also amended several FAQs (886, 887, 1019, 1022, 1025, 1027, 1092, and 1154) to clarify the prohibitions on the import and export of Russian goods and services under EO 14024, EO 14066, EO 14068, and EO 14114, and their impact on both U.S. and non-U.S. persons.
U.S. Department of Treasury Press Release | U.S. Department of Treasury Recent Action