The EU and the U.K. announced restrictive measures Feb. 22 on Russian individuals and entities in response to Russia mobilizing troops in Ukraine's Donetsk and Luhansk regions.
President Joe Biden said in a Feb. 23 statement that the U.S. will impose sanctions against the Nord Stream 2 pipeline company and its corporate officers. Nord Stream 2 AG is a project company established for planning, construction and subsequent operation of the pipeline. It is owned by a subsidiary of Gazprom. Biden said the sanctions are "another piece" of America's initial tranche of sanctions and that the administration "will not hesitate to take further steps if Russia continues to escalate."
More sectoral sanctions targeting vulnerable elements of the Russian economy that rely on imports, such as semiconductors and other high-tech products, appear likely, said trade lawyers on a Feb. 23 panel hosted by law firm Thompson Hine. Following President Joe Biden's executive order and statements imposing sanctions on Russia (see 2202220003), they agreed, "the [U.S.] government is holding more in its back pocket" following the first tranche of sanctions announced on Feb. 21 and 22.
President Joe Biden on Feb. 24 announced several new sanctions and export control actions on Russia following its invasion of Ukraine. In remarks at the White House, Biden promised that the sanctions would impose "severe costs on the Russian economy immediately" and are designed to "maximize the long-term impact on Russia." He said four more major Russian banks, including VTB, would be sanctioned along with Russian state-owned enterprises and that additional Russian officials would be added to the Specially Designated Nationals (SDN) list.
The Commerce and Treasury Departments announced a raft of new export controls and sanctions measures against Russia in press releases issued Feb. 24 following White House remarks by President Joe Biden. The measures include export control license requirements for a broad swath of the Commerce Control List, and the expansion of sanctions, including to entities in Belarus. The Bureau of Industry and Security also released a final rule on the export control changes, which take effect Feb. 24.
U.K. Prime Minister Boris Johnson announced the sanctions on five Russian banks and three oligarchs in a Feb. 22 statement to Parliament as a response to Russia's recognition of what he termed the "supposed independence" of two regions of Ukraine. Russia entered forces into these two regions -- Donetsk and Luhansk -- describing the forces as "peacekeepers." Johnson said the U.K. sanctioned IS Bank, Bank Rossiya, Promsvyazbank, Genbank and Black Sea Bank for Development and Reconstruction. Additionally, oligarchs Gennadiy Timchenko, Boris Rotenberg and Igor Rotenberg will be subject to the U.K.'s restrictive measures. "This is the first tranche, the first barrage, of what we are prepared to do: we will hold further sanctions at readiness, to be deployed alongside the United States and the European Union if the situation escalates still further," Johnson said.
The U.K.'s Office of Financial Sanctions Implementation fined London-based financial institution Clear Junction more than $49,000 for violating the country's sanctions on those violating the territorial sovereignty of Ukraine. From March to June 2018, Clear Junction conducted 15 transactions with accounts held at the EU-designated Russian National Commercial Bank. Clear Junction then made funds available to an individual designated under the Ukraine sanctions regime, OFSI said. Clear Junction made a voluntary disclosure, dropping the penalty by 26.7%. The financial services firm detailed eight of the transactions, but further investigation revealed nondisclosed payments from Clear Junction. TransferGo initiated the transactions, giving a Russian Bank Identification Code to Clear Junction to enable the transactions, OFSI said. TransferGo was fined in August for its role in the scheme.
The European Union added 40 individuals and entities to its sanctions regimes on ISIL and al-Qaida, Syria, Myanmar and entities involved in the Russian State Duma elections in Crimea. Under the ISIL sanctions list, the European Council added two individuals and two groups. The restrictive measures now apply to al-Qaida in the Indian subcontinent and its leader Osama Mahmood, along with Aziz Azam, spokesperson of ISIL-K -- the Islamic State's Khorasan Province -- and Da'esh Hind Province, an ISIL-affiliated group in India. The council said the sanctioned parties are planning attacks in Afghanistan and pose a serious threat to "regional and international stability."
The Bureau of Industry and Security’s reorganization and clarification of its foreign direct product rules this month (see 2202020021) could allow the administration to more easily use the rule to target specific Russian sectors if Russia invades Ukraine (see 2202150043), Akin Gump said in a February alert. The law firm outlined how companies can examine recent BIS changes to the FDP rule as a “guide for analyses of the scope and impact of possible” new Russia controls, and how certain changes to the Export Administration Regulations would affect various exports to Russia. Companies should examine whether their foreign-produced items contain certain levels of U.S. origin content, Akin Gump said, and whether they would have to comply with new licensing restrictions if Russia were moved to a different EAR Country Group.
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