Joining British and European allies, the US imposed a further raft of sanctions on Russia and her enablers.
Treasury’s Office of Foreign Assets Control (OFAC) is sanctioning almost 300 individuals and entities. This is the largest number of sanctions imposed since Russia’s 2022 invasion of Ukraine.
State is designating three Government of Russia officials in connection with Aleksey Navalny’s death; together, Treasury and State are sanctioning over 500 targets. The Department of Commerce is also adding more than 90 companies to the Entity List.
State’s concurrent actions include sanctions on those involved in supporting Russian future energy revenue sources, maintaining Russia’s capacity to wage its war of aggression, and facilitating sanctions evasion and circumvention. State is also taking steps to impose visa restrictions on Russian Federation-installed purported authorities involved in the transfer, deportation, and confinement of Ukraine’s children.
"We can't walk away now," said President Joe Biden. "That's what Putin is betting on."
Targeted Entities include the state-owned operator of Russia’s Mir National Payment System, as well as nine regional financial institutions and five investment and venture capital funds. [Complete List Annex 4]
Other sanctions focused on drone manufacturing [Annex 1], advanced manufacturing and technology such as machine tools, including computer numerically controlled (CNC) machines, which are used in Russia’s heavy machine-building and arms manufacturing industries; additive manufacturing (also known as 3D printing), of which Russia has increased its use for defense purposes. [Complete list Annex 2]
This action also includes one individual and one entity engaged in Russia’s illegitimate control of Ukraine’s Zaporizhzhya Nuclear Power Plant as well as three subsidiaries of Rosatom’s civil nuclear structure. The US and Allies have been reluctant to sanction the Russian nuclear complex directly, as american and european reactors are dependant on Russian fuel, and Hungary is midstream on a major upgrade of its reactor fleet with Rosatom.
While the administration has targeted the company by sanctioning Russian nuclear and Rosatom-linked individuals and entities, direct action to this $18 billion export powerhouse remains witheld.
Targeted as well are third-country exporters and transhippers of technology, equipment, and parts to Russia, a freight forwarder involved in weapons shipments to Russia, and a transnational money laundering network facilitating the illicit movement of Russian-origin precious metals. In all, OFAC today targeted 26 third-country entities and individuals in 11 countries, including the People’s Republic of China, Serbia, the United Arab Emirates, and Liechtenstein. [Complete List Annex 3]
Included in the sanctioned entities is a Liechtenstein-based precious metals investment firm owned and directed by German nationals Axel and Fritz Diegelmann.
Administration officials tried to soft pedal the muted impact that sanctions have had on the Russian economy to date.
"While GDP is higher than projected, it’s largely due to the 70 percent increase in military spending, which has driven inflation higher and has taken the place of critical investments in Russia’s people and future," said Deputy Treasury Secretary Wally Adeyemo in remarks to The Council on Foreign Relations Friday.
"Our sanctions have two goals: reduce the revenues the Kremlin has to fuel its war of choice, and disrupt Russia’s ability to get the goods it needs to build the weapons the Kremlin wants
"Today, we will impose additional price cap sanctions that will increase Russia’s circumvention costs, as well as reinforce our policy of reducing the Kremlin’s revenue while permitting oil to reach the market.
"Second, we are making it harder for Russia to purchase the goods it needs to build weapons it wants. This includes sanctioning companies in Russia and, importantly, in third countries that support Russia’s military industrial complex.
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing Russia-related General License 88, "Authorizing the Wind Down of Transactions Involving Certain Entities Blocked on February 23, 2024;" Russia-related General License 89, "Authorizing the Wind Down and Rejection of Transactions Involving Certain Financial Institutions Blocked on February 23, 2024;" Russia-related General License 90, "Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Certain Entities Blocked on April 8, 2024;" and Russia-related General License 91, "Authorizing Limited Safety and Environmental Transactions Involving Certain Blocked Persons or Vessels."
OFAC is also issuing three new, Russia-related Frequently Asked Questions (FAQs 1164-1166) and amending eight Russia-related Frequently Asked Questions (FAQs 886, 887, 1019, 1022, 1025, 1027, 1092, and 1154).
Commerce Department’s Bureau of Industry and Security (BIS) imposed additional export restrictions on 93 entities under 95 entries in Russia and seven other destinations. This action, along with others announced today, demonstrates the Biden-Harris Administration’s unwavering commitment to supporting those affected by Russia’s aggression.
“Our hearts are heavy that Russia’s senseless and bloodthirsty war of choice is ongoing and we have to continue to show resolve and support the Ukrainian people,” said Under Secretary of Commerce for Industry and Security Alan Estevez. “BIS will continue working with our international and interagency partners to tighten and enforce our restrictions, which will continue to limit Putin’s military options by imposing substantial costs on his ability to repair, replenish, and rearm with high-tech, high-quality equipment.”
Entity List additions continue efforts to cut off the Russian defense industrial base and military from even the low-technology consumer goods it seeks to sustain its war effort. Prior to today’s action, the Biden-Harris Administration had added 815 entities in Russia, Belarus, and numerous third countries to the Entity List since March 2nd, 2022, for reasons related to Russia’s full-scale invasion of Ukraine or for otherwise supporting Russia’s military and/or defense industry.
BIS is adding an additional 93 entities under 95 entries (due to some entities operating in multiple countries) to the Entity List for a variety of reasons related to their activities in support of Russia’s defense-industrial sector and war effort. Sixty-three of the entities are based in Russia, eight in the People’s Republic of China, sixteen in Turkiye, four in the United Arab Emirates (UAE), two in the Kyrgyz Republic, and one each in India and South Korea.
More than 50 of the entities added to the list today will also receive a “footnote 3” designation as Russian-Belarusian military end users. A footnote 3 designation subjects these entities to some of the most severe restrictions under the Export Administration Regulations (EAR). The entities are added with a license requirement for all items subject to the EAR and a license review policy of denial, apart from food and medicine designated as EAR99, which will be reviewed on a case-by-case basis.
These rules are meant to serve as a response to Russian aggression against Ukraine. BIS is adding entities in several allied and partner countries, but it is not an action against the countries in which the entities are located or registered or the governments of those countries. The restrictions imposed in today’s rule serve as an action against those entities listed, which have supported the Russian military industrial base and other activities contrary to U.S. national security and foreign policy interests.
The text of the rule released today, which includes the list of entities, is available on the Federal Register’s website here: https://www.federalregister.gov/public-inspection/current. The effective date for the rule is February 23, 2024.
Additional information on the Entity List is available on BIS’s website at: https://bis.doc.gov/index.php/policy-guidance/faqs.
While BIS’s controls cover a vast array of items necessary to fuel Russia’s war machine, certain items are more significant to Russian weaponry than others.
Working with the European Union, Japan, and the United Kingdom, BIS has identified “common high priority items” by six-digit Harmonized System (HS) Codes that Russia seeks to procure for its weapons programs. BIS and its international partners have increased the common high priority items on the list from 45 to 50 to highlight for industry that certain machine tools pose a heightened risk of being diverted illegally to Russia because of their importance to Russia’s war efforts.
In addition, BIS has issued a communique reiterating steadfast commitment to sustaining the unprecedented approach to export control cooperation against Russia that has been broader in scope, more substantial in participation, and more rapid in execution than any effort before it. The communique notes that as the war has progressed, international export control partnerships have continued to grow stronger, with more sophisticated cooperation and more comprehensive controls.
A link to the full, updated Common High Priority Items List is available online at: https://www.bis.doc.gov/index.php/2011-09-14-14-10-06/russia-export-controls
The BIS communique is available online at: https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3450-2024-02-22-bis-communique-russia-export-controls/file
The U.S. government is releasing an official Business Advisory titled, “Risks and Considerations for Doing Business in the Russian Federation and Russia-Occupied Territories of Ukraine.” This advisory is a joint product of the Departments of Commerce, the Treasury, and State and provides information for businesses regarding the risks of Russia’s conduct in Ukraine. The advisory provides summary information on the state of the market and related concerns, and on topics including:
A link to the full advisory is available online at: https://www.state.gov/imposing-measures-in-response-to-navalnys-death-and-two-years-of-russias-full-scale-war-against-ukraine/.
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