U.S. General Licenses and Guidance: The Office of Foreign Assets Control (“OFAC”) issued four general licenses (“GLs”) this week.  In GL6B, OFAC expanded the authorizations in the previous GL 6A to also permit all transactions “related to…the production, manufacturing, sale, or transport of…agricultural equipment”, in addition to the previously-authorized transactions, including transactions relating to agricultural commodities, medicine, and medical devices, among others.  The Treasury Department issued a related Fact Sheet clarifying that U.S. sanctions against Russia do not target agricultural commodities (including fertilizer), agricultural equipment, or medicine.

GL 25C authorizes transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving Russia.  GL 25C is largely similar to GL 25B, but adds that transactions with media outlets New Eastern Outlook and Oriental Review are not permitted under the GL, unless separately authorized.

GL 30A permits all transactions involving SEFE Securing Energy for Europe GmbH (formerly known as Gazprom Germania GmbH, the entity referenced in GL 30), and any entity in which it owns, directly or indirectly, a 50 percent or greater interest.  The revisions in GL 30A also extend the expiration of the GL from the end of September to December 16, 2022.

GL 44 authorizes all transactions ordinarily incident and necessary to exportation or supply of tax preparation or filing services from the U.S. or by a U.S. person to any individual who is a U.S. person located in Russia.

This week OFAC also issued three new FAQs relating to GLs 6B and 25C and the U.S. prohibitions related to correspondent or payable-through Accounts and processing of transactions involving certain foreign financial institutions (Russia-related CAPTA Directive).

Separately, on July 11th, the U.S. State Department publicly supported Canada’s decision to export a sanctioned natural-gas turbine to Germany for use in the Nord Stream 1 pipeline.  “In the short term, the turbine will allow Germany and other European countries to replenish their gas reserves, increasing their energy security and resiliency and countering Russia’s efforts to weaponize energy,” U.S. State Department spokesperson Ned Price said in a statement.

EU Guidance and Potential Future Actions: On July 8th, the European Commission published two new FAQs addressing a Russian person’s repayment of a loan from an EU credit institution and the scope of the ban on services for trusts.

This week, the European Commission published guidance that states sanctioned goods may transit through the EU from Russia provided that they are transported via rail.  However, the transit of such goods is prohibited if transported by road.  Regardless of means of transport, the transit of military and dual-use goods and technology is prohibited.  Lithuania has blocked Russian shipments to Kaliningrad from transiting Lithuania and requested clarification from the EU on whether the transit of sanctioned Russian goods is permitted under EU measures.

According to the press, the EU is considering lifting sanctions imposed on some Russian individuals.  Around 30 individuals have filed lawsuits against the EU seeking removal from the EU’s sanctions list and 10 others have appealed directly to the EU.  Media reports indicate that the EU believes some of the requests are legitimate.

Media reports indicate that the EU is preparing a seventh package of sanctions, expected to be adopted on July 15.  It is reported to include designations of 50 additional people and entities.  The package is also expected to ban gold imports and adopt a more extensive list of dual-use goods subject to export controls.

UK Guidance: A number of UK agencies issued a “Red Alert” on July 12 to provide information about techniques designated persons may use to evade sanctions.  The alert includes a number of indicators of suspected sanction evasion, as well as recommended best practices for industry. 

Enforcement of Sanctions:  The European Commission Director General for Trade, Sabine Weyand, described the EU and U.S. joint approach on sanctions enforcement at an event earlier this week.  The two jurisdictions are monitoring and exchanging data, including classified information.  Within the EU, media reports indicate that EU member states are discussing ways to close loopholes, tighten enforcement, and share data with other EU members.

Proposed Russian Oil Price Cap: U.S. Treasury Secretary Janet Yellen, currently traveling in Asia, is focusing on a proposed cap on Russian oil.  The U.S. has reportedly been discussing the plan with a number of countries, although the specific nations have not been named.  This week, U.S. Deputy Treasury Secretary Wally Adeyemo said he did not expect that the U.S. would sanction countries or entities that do not join the proposed oil cap plan, stating: “I don’t think we need secondary sanctions because, in this case, what we’re doing is something that is creating the right incentives for the countries that are purchasing Russian oil.”  He added: “There’s going to be a natural incentive for countries to join this coalition.”

U.S.-EU Export Control Coordination: The U.S. and the EU, as part of the Trade Technology Council Export Control Working Group, is holding a Stakeholder Session on Tuesday, July 19 at 10:00-12:00 / 16:00-18:00.  Save the date https://policy.trade.ec.europa.eu/events/2nd-joint-eu-us-stakeholder-outreach-dual-use-exportcontrols-2022-07-19_en  The registration page is available: https://ttd-registration.com/ttd-jsm1-wg7/

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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.