Ben Perkins

Companies need to stay on top of their compliance because significant escalation of Russia-related sanctions is possible, KPMG experts said. The "dramatic increase in the use of sanctions and other controls" over the past two months will likely continue to expand in complexity, said Jason Rhoades, KPMG senior manager-trade and customs services, during a May 11 webinar. Because Russian behavior toward Ukraine has not changed, "we expect [the use of sanctions] to continue to grow," Rhoades said. "There is significant room still out there for [sanctions] escalation."

The Federal Maritime Commission needs cooperation from the trade and logistics community to engage in meaningful enforcement, FMC Chairman Daniel Maffei said. Speaking last week at the annual National Customs Brokers & Forwarders Association of America conference, Maffei said that he has been frustrated that "a lot of people expect the FMC to intervene on the side of small shippers" and don't understand the limits of the commission's authority.

The Office of Foreign Assets Control fined Toll Holdings, a Melbourne, Australia-based international freight and logistics company, more than $6.13 million for nearly 3,000 violations of multiple U.S. sanctions programs. OFAC said Toll received illegal payments connected to sea, air and rail shipments through multiple highly sanctioned countries, including North Korea, Iran and Syria. The transactions included sanctioned Iranian airline Mahan Air (see 2111190006) and Iran-based Hafiz Darya Shipping Lines.

The Office of Foreign Assets Control last week fined Colorado-based Newmont Corp. and Florida-based Chisu International Corp. after the two mining companies bought Cuban-origin “explosives and explosive accessories” from a third-party vendor. The agency announced a $141,442 settlement with Newmont and a $45,908 settlement with Chisu for violating the Cuban Assets Control Regulations.

Keeping pace with the multinational sanctions targeting Russia remains a difficult task for lawyers and businesses, even some two months after its invasion of Ukraine, lawyers at Crowell & Moring said during an April 21 webinar hosted by the firm.

The Office of Foreign Assets Control issued Russia-related General License 27, which allows certain transactions by nongovernmental organizations involving Russia. The license authorizes activities in support of humanitarian projects, democracy building initiatives, education, non-commercial development projects and environmental and natural resource protection in both Russia and Ukraine.

Although the U.S. has been careful not to pressure some countries into imposing Russian energy restrictions and sanctions (see 2204110037), Deputy Treasury Secretary Wally Adeyemo is confident they will eventually join the more than 30 states imposing the measures. Those countries will realize the economic benefits of doing business with nations in the “sanctions coalition” outweighs the value of doing business with Russia, Adeyemo said.

The U.S. on April 6 issued a series of new financial restrictions on Russian banks, including full blocking sanctions on Sberbank and Alfa Bank, two of the country's largest financial institutions. The wide-ranging designations also include full-blocking sanctions against a group of Russian state-owned entities "critical" to funding the war in Ukraine, the White House said. Sanctions were also levied against additional Russian government officials, oligarchs and their family members, including the adult children of Russian President Vladimir Putin and members of the Russian security council. President Biden also issued an executive order blocking new investment in Russia by Americans or American companies.

The Treasury Department this week expanded its sanctions authorities to cover Russia’s aerospace, electronics and marine sectors, building on an April 2021 executive order that targeted the country’s defense and technology sectors (see 2104150019). Treasury also announced a host of new designations against Russian people and entities, including the country’s largest chip maker.

The U.S. is preparing more sanctions and export controls against Russia, including more measures to target the country's defense industrial base and critical supply chains, Deputy Treasury Secretary Wally Adeyemo said March 29 during an event at Chatham House in London. The U.S., which will announce those steps alongside more than 30 allies, is also turning its enforcement focus to companies or countries that may be helping Russia evade the sanctions, Adeyemo said.