On March 24, 2022, the US imposed new sanctions on Russia in coordination with Western allies as the leaders from the US, Canada, France, Germany, Italy, Japan, the United Kingdom (UK), and the European Union (EU) met in Brussels to discuss the growing crisis in Ukraine. Both the US and its allies continue to target Russia.
The latest meeting between the US and its allies signals greater effort in coordinating an economic response to Russia's invasion into Ukraine. The latest sanction measures are broken down by individual countries below.
Both the US Treasury Department and the US Department of State took action to impose full blocking sanctions on Russia's defense-industrial sector, hundreds of Russian politicians, and several Russian elites, including the head of the largest financial institution in Russia.
The Treasury Department's Office of Foreign Assets Control (OFAC) designated The State Duma of the Federal Assembly of the Russian Federation (Duma) and 328 of its members to its Specially Designated Nationals (SDN) List. US persons, including US financial institutions, are prohibited generally from engaging in any transaction with SDNs and are required to block (i.e., freeze) any property or interests in property belonging to SDNs.
This follows earlier sanctions imposed by the US on 12 members of the Duma who reportedly voiced their support of recognizing the Luhansk and Donetsk regions of Ukraine. The full list of the recently designated Duma members can be found here.
The head of Sberbank, Herman Gref, was also added to the list. Sberbank is the largest financial institution in Russia and has already been a target of US sanctions. Pursuant to Directive 2 under Executive Order (EO) 14024 "Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions," US individuals may not open or maintain a correspondent bank account nor may they process any transaction on behalf of Sberbank and its subsidiaries starting on March 26, 2022.
Additionally, the Treasury Department added 48 entities and one individual involved in the Russian defense-industrial base to the SDN list.
The US State Department also targeted several individuals, including 17 board members of PJSC Sovcombank, one of the largest privately-owned banks in Russia. A full list of the 17 board members can be found here.
In addition to the Sovcombank board members, the State Department also announced sanctions on Gennady Nikolayevich Timchenko and his companies and family members. Mr. Timchenko was previously sanctioned by the US over Russia's annexation of Crimea in 2014.
Pursuant to these State Department designations, OFAC added the 17 board members, and the following assets and individuals to its SDN list:
Aside from the new designations, the Treasury Department also issued new guidance on how Russia-related sanctions impact gold transactions or persons involved in the gold market. In particular, any person "determined to be responsible for or complicit in, or to have directly or indirectly engaged or attempted to engage in, deceptive or structured transactions or dealings to circumvent US sanctions, including through the use of assets such as gold or other precious metals" may be sanctioned for such activity. This guidance comes as White House officials state they have heard suggestions that Russia is using gold reserves to support and stabilize its economy.
OFAC also issued four new General Licenses (GL):
The UK also imposed new sanctions targeting strategic industries, financial institutions, and Russian elites. Pursuant to this latest measure, all assets in the UK of the 65 specified individuals are frozen preventing any UK citizen or business in the UK from dealing with any funds or any UK-based economic resources which are owned, held, or controlled by a designated person.
A representative list of the new individuals sanctioned by the UK includes:
Meanwhile, a day prior to the March 24 meeting in Brussels, Canada imposed new sanctions on 160 members of the Russian Federal Council, the upper house of Russia's parliament. This latest addition means all members of the Council are now subject to Canada's sanctions regime. Any person in Canada or Canadian living abroad is prohibited from engaging in the following activities with a sanctioned individual:
In addition to the new sanctions, Canada is set to issue new export restrictions on certain Canada-origin goods and technologies to Russia.
In addition to new sanction measures, the US and its allies announced a new international sanctions evasion initiative aimed at information sharing and coordinating enforcement measures to stymie evasion methods. This international effort follows the establishment of a US interagency task force, KleptoCapture, dedicated to tracking down and seizing sanctioned assets as well as investigating and prosecuting sanctions violations.
We will continue to monitor the sanctions and export control restrictions as they emerge.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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