July 20, 2023

US imposes sanctions to inhibit Russia’s war efforts

As part of the ongoing efforts of the US government and its allies to degrade Russia’s ability to produce and export energy, and to impede its procurement of the goods and technology needed to fuel the war against Ukraine, the US Department of State and the Office of Foreign Assets Control of the US Department of the Treasury have issued dozens of new sanctions.  OFAC has added twenty individuals, fourteen vessels, and close to a hundred commercial entities to the Specially Designated Nationals and Blocked Persons List, with a focus on third-party intermediaries and transshipment points outside of Russia used to import dual-use technology that is incorporated into Russian weapons systems.

In its announcement of the new sanctions, OFAC describes several entities based in the Kyrgyz Republic that have exported controlled electronics components to Russia.  Other newly-designated entities include Russia-based importers of dual-use items, munitions factories, manufacturers of components for rocket systems, missiles and bombs, and research institutes.  OFAC has also targeted commercial banks in Moscow, St. Petersburg and the Volga region for operating in the financial services sector of the Russian economy.  In addition, OFAC has designated players in Russia’s energy, chemicals, metals, and mining sectors.

All of today’s designations are pursuant to Executive Order 14024.  As a result of these designations, all property and interests in property of the 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 conjunction with these sanctions, OFAC has issued General Licenses 70 and 71.  GL 70 authorizes the wind down of transactions involving Joint Stock Company Ural Mining and Metallurgical Company  (“UMMC”), one of the companies designated today pursuant to Executive Order 14024.  The GL authorizes activities related to the wind down of transactions involving UMMC that would otherwise be prohibited, except for transactions prohibited under Directives 2 or 4 of Executive Order 14024 and transactions otherwise prohibited by the Russian harmful Foreign Activities Sanctions Regulations.  Any payments made to a UMMC entity pursuant to GL 70 must be made into a blocked account.  GL 70 remains in effect through October 18, 2023.

General License 71 is also in effect through October 18, 2023.  It authorizes transactions that would otherwise be prohibited by Executive Order 14024 if they are connected with wind down activities involving one of the banks designated today by OFAC or entities owned 50 percent by them.  (The banks are:  Joint Stock Company Petersburg Social Commercial Bank; Joint Stock Company Locko Bank; Unistream Commercial Bank JSC; Joint Stock Company Commercial Bank Solidarnost, and; JSC Tinkoff Bank.)  Any moneys paid pursuant to GL 71 must be paid into a blocked account.  The general license does not authorize transactions prohibited by Directive 2 of Executive Order 14024; nor does it authorize debits to accounts of the Central Bank of the Russian Federation, the Russian Ministry of Finance, or the National Wealth Fund of the Russian Federation, to the extent they are recorded on the books of US financial institutions.

US Dept of the Treasury press release |

US Dept of State fact sheet | GL 70 | GL 71