Russia Sanctions:  Last Friday, the U.S. (BIS) added a number of entities to the Entity List citing their support of the Russian and Belarusian militaries.  Over the April 1 weekend, the world began to learn of the atrocities in Bucha.  The U.S., UK, and EU have since responded with a number of new sanctions and restrictions.

New U.S. Prohibitions and Expanded Authority: On April 6, 2022, President Biden signed an Executive Order (EO) that prohibits all “new investment in the Russian Federation by a United States person, wherever located.”  The EO also permits the U.S. Department of the Treasury (“Treasury”) to prohibit the provision of “any category of services,” as determined by the Secretary of the Treasury, to persons located in Russia.  Treasury has not provided any guidance about categories of services subject to this prohibition.

U.S. Entity List Designations: On April 1, 2022, the U.S. (BIS) added 120 entities to the Entity List for supporting the Russian and Belarusian militaries.  A “footnote 3” designation was added to 95 of the entities that were determined to be “military end users.”  The footnote 3 designation subjects those entities to the Foreign Direct Product Rule (FDP Rule).  As discussed in our March 3, 2022 update, the FDP Rule restricts the export to Russia and Belarus of most foreign manufactured goods that use U.S.-origin software or technology as part of their manufacturing processes.

Financial Sector Restrictions: This week, the U.S. fully blocked Russia’s largest financial institution, Public Joint Stock Company Sberbank of Russia (“Sberbank”), and Russia’s largest privately-owned financial institution, Joint Stock Company Alfa-Bank (“Alfa-Bank”).  Both banks were previously subject to more limited sectoral sanctions, but are now both Specially Designated Nationals (SDNs).  42 Sberbank subsidiaries, six Alfa-Bank subsidiaries, and five vessels owned by one of Alfa-Bank’s subsidiaries were also added to the SDN List.  The U.S. clarified that Alfa-Bank (Ukraine) is not subject to sanctions, because it is a distinct legal entity from Alfa-Bank.  Separately, the UK designated Credit Bank of Moscow, and Sberbank.

U.S. Sanctions on Russian State-Owned Enterprises: The U.S. designated two state-owned enterprises: (1) Alrosa, the world’s largest diamond company; (2) Joint Stock Company United Shipbuilding Corporation (“USC”), which manufactures Russian military warships, as well as the subsidiaries and board members of each.

Sanctioned Oligarchs and Other Individuals: The UK identified eight new oligarchs as subject to an asset freeze including: Leonid Mikhelson, who is associated with SIBUR, a petrochemical company; Viatcheslav Kantor, the Chair of Acron, a fertilizer company; Andrey Guryev, former Deputy Chair at PhosAgro, a phosphate-based fertilizer company; and several leaders of already designated entities.

The U.S. added the remaining members of Russia’s Security Council, including former president Dmitri Medvedev, to the SDN List.  It also designated family members of Russian officials.  Both the U.S. and UK placed sanctions on President Putin’s adult daughters.

Additional EU Sanctions: Media reports indicate that the EU has approved a fifth round of sanctions; however, the legislation has not been published.  We expect the official record to be released as early as April 8, 2022.

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Photo of Caroline Brown Caroline Brown

Caroline E. Brown is a partner in Crowell & Moring’s Washington, D.C. office and a member of the firm’s White Collar & Regulatory Enforcement and International Trade groups and the steering committee of the firm’s National Security Practice. She provides strategic advice to…

Caroline E. Brown is a partner in Crowell & Moring’s Washington, D.C. office and a member of the firm’s White Collar & Regulatory Enforcement and International Trade groups and the steering committee of the firm’s National Security Practice. She provides strategic advice to clients on national security matters, including anti-money laundering (AML) and economic sanctions compliance and enforcement challenges, investigations, and cross border transactions, including review by the Committee on Foreign Investment in the United States (CFIUS) and the Committee on Foreign Investment in the U.S. Telecommunications Services Sector (Team Telecom).

Caroline brings over a decade of experience as a national security attorney at the U.S. Departments of Justice and the Treasury. At the U.S. Department of Justice’s National Security Division, she worked on counterespionage, cybersecurity, and counterterrorism matters and investigations, and gained unique insight into issues surrounding data privacy and cybersecurity. In that role, she also sat on both CFIUS and Team Telecom and made recommendations to DOJ senior leadership regarding whether to mitigate, block, or allow transactions under review by those interagency committees. She also negotiated, drafted, and reviewed mitigation agreements, monitored companies’ compliance with those agreements, and coordinated and supervised investigations of breaches of those agreements.

Photo of Carlton Greene Carlton Greene

Carlton Greene is a partner in Crowell & Moring’s Washington, D.C. office and a member of the firm’s International Trade and White Collar & Regulatory Enforcement groups. He provides strategic advice to clients on U.S. economic sanctions, Bank Secrecy Act and anti-money laundering…

Carlton Greene is a partner in Crowell & Moring’s Washington, D.C. office and a member of the firm’s International Trade and White Collar & Regulatory Enforcement groups. He provides strategic advice to clients on U.S. economic sanctions, Bank Secrecy Act and anti-money laundering (AML) laws and regulations, export controls, and anti-corruption/anti-bribery laws and regulations. Carlton is the former chief counsel at FinCEN (the Financial Crimes Enforcement Network), the U.S. AML regulator responsible for administering the Bank Secrecy Act.

Photo of Edward Goetz Edward Goetz

Edward Goetz is the manager for International Trade Services in Crowell & Moring’s Washington, D.C. office. Edward leads the firm’s international trade analysts providing practice support to the International Trade Group in the areas of customs regulations, trade remedies, trade policy, export control…

Edward Goetz is the manager for International Trade Services in Crowell & Moring’s Washington, D.C. office. Edward leads the firm’s international trade analysts providing practice support to the International Trade Group in the areas of customs regulations, trade remedies, trade policy, export control, economic sanctions, anti-money laundering (AML), anti-corruption/anti-bribery, and antiboycott. He has extensive government experience providing information and interpretive guidance on the International Traffic in Arms Regulations (ITAR) concerning the export of defense articles, defense services, and related technical data. He also assists attorneys with matters involving the Export Administration Regulations (EAR), economic sanctions, AML, anti-corruption/anti-bribery, and trade remedies.