Russian Sanctions Regime in USA by OFAC

Russian Sanctions Regime in USA by OFAC

The Ukraine/Russia sanctions program implemented by the Office of Foreign Assets Control (OFAC) began on March 6, 2014, when the President of the USA declared a national emergency in Executive Order (EO) 13660 against the threat posed by the actions and policies of certain individuals, who undermine democratic processes and institutions in Ukraine; threatened the peace, security, stability, sovereignty, and territorial integrity of Ukraine.

Prohibited Transactions

Sanctions connected to the Ukraine/Russia sanctions program are divided into three basic categories, which are discussed in further detail below:

  • Sanctions against individuals and entities designated by E.O. 13660, E.O. 13661, E.O. 13662, or E.O. 13685 and listed on the List of Specially Designated Nationals and Blocked Persons (SDN List);
  • Sectoral sanctions imposed on firms operating in areas of the Russian economy recognized by the Secretary of the Treasury by Executive Order 13662 and listed on the Sectoral Sanctions Identification List (SSI List);
  • A new investment restriction, as well as a prohibition on exporting or importing products, technology, or services to or from Ukraine’s Crimea area.

Blocking Sanctions

Transactions involving the transferring, paying, exporting, withdrawing, or otherwise dealing in the property or interests in property of a business or individual included on OFAC’s Specially Designated Nationals (SDNs) List are banned unless otherwise allowed or excluded. Property and interests in property of an entity controlled 50 percent or more by one or more people whose property and interests in property are barred under any portion of 31 C.F.R. chapter V are also blocked, regardless of whether the entity itself is listed.

Sectoral Sanctions

Sectoral sanctions placed on specific individuals engaged in the Russian economy designated by the Secretary of the Treasury were carried out under E.O. 13662 by Directives issued by OFAC in accordance with its delegated authority. These Directives impose limitations on certain specified transactions with companies subject to the relevant Directive, as indicated on the SSI List, on US persons and within the US. Property and interests in property of an entity held 50 percent or more by one or more sanctioned people, whether individually or collectively, directly or indirectly, are also sanctioned, regardless of whether the entity itself is placed on the SSI List. These individuals’ property and interests in property are not frozen, nor are dealings with them restricted beyond the scope of these limitations.

New investment ban and trade embargo

The following transactions involving Ukraine’s Crimea area are typically prohibited:

  • A new investment in Ukraine’s Crimea territory by a US citizen, wherever situated;
  • The direct or indirect importation into the United States of any products, services, or technology from Ukraine’s Crimea area;
  • The exportation, reexportation, sale, or supply, directly or indirectly, of any goods, services, or technology from the United States or by a U.S. person, wherever situated, to the Crimea area of Ukraine; and
  • Any permission, funding, facilitation, or guarantee provided by a U.S. person, regardless of location, of a transaction by a foreign person when the transaction by that foreign person would be unlawful if undertaken by a U.S. person or within the United States.