- U.S. Designates Numerous Individuals and Entities: On September 15, 2022, the U.S. added a number of individuals and entities to the Specially Designated Nationals and Blocked Persons (“SDN”) List. The sanctions target Russia’s financial system, including the heads of Russia’s state-run card payment system (NSPK), central securities depository, stock exchange’s clearing service provider, and an entity the Kremlin uses to liquidate financial institutions and access foreign assets. Other designations include three Russian military space entities, 13 Russian entities in the technology sector, and 14 entities in the Russian electronics sector, among others.
- EU Removes Individuals from Annex I to Regulation (EU) No 208/2014 and Annex I to Regulation (EU) No 269/2014: On September 12, 2022, the EU removed four individuals from the Annex I to Regulation (EU) No 208/2014, because sanctions restrictions on these persons expired on September 6, 2022. The four included Viktor Fedorovych Yanukovych, Viktor Pavlovych Pshonka, Oleksandr Viktorovych Yanukovych, and Artem Viktorovych Pshonka. The EU removed an additional three individuals (Vladimir Volfovich Zhirinovsky, Olga Ayziman, and Saodat Narzieva) from Annex I to Regulation (EU) No 269/2014 on September 14, 2022.
U.S. General Licenses:
- On September 15, 2022, the Office of Foreign Assets Control (“OFAC”) issued General License (“GL”) 51. GL 51 authorizes the wind down of any transaction involving Limited Liability Company Group of Companies Akvarius (Aquarius), or any entity in which it owns a 50 percent or greater interest. The license expires on October 15, 2022.
- The U.S. also published GL 52, which permits certain transactions ordinarily incident or necessary to journalistic activities or to the establishment or operation of a news reporting organization, provided that the only involvement of blocked persons is the processing of funds by financial institutions blocked pursuant to Executive Order (“EO”) 14024. For the purposes of GL 51, the term “news reporting organization” means “an entity whose primary purpose is the gathering and dissemination of news to the general public.” Certain Russian news organizations are excepted from GL 52. This license currently has no expiration date.
U.S. OFAC Determinations and FAQs:
- On September 15, 2022, OFAC issued two determinations. In the first, OFAC determined that section 1(a)(i) of EO 14024 applies to the Russian quantum computing sector, meaning that any person determined by the Secretary of Treasury to operate or have operated in the sector is subject to blocking sanctions. The determination took effect the same day, September 15, 2022.
- In the second determination, OFAC explains that, effective October 15, 2022, the export, reexport, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of quantum computing services to any person located in the Russian Federation is prohibited by section 1(a)(ii) of EO 14071.
- On September 15, 2022, OFAC published seven new FAQs (1080-1086). FAQs 1080 and 1081 address obligations of U.S. persons with accounts at blocked Russian banks and the requirements for utilizing GL 50, including the filing of blocking reports and unblocking reports with OFAC. FAQ 1082 discusses the secondary sanctions risks non-U.S. financial institutions face in new or expanded agreements with NSPK and the use of Russia’ MIR National Payment Card System. FAQs 1083 to 1086 explain OFAC’s quantum computing prohibitions and the scope of their application.
- OFAC also updated five FAQs (1033, 1034, 1059, 1061, and 1062) to reflect OFAC’s new quantum computing prohibitions.
U.S. Expands Export Controls on Russia and Belarus: On September 15, 2022, the Commerce Department’s Bureau of Industry and Security (“BIS”) issued a rule effective immediately. Among other provisions, the rule:
- Expanded the scope of the Russian industry sector sanctions to include items potentially useful for Russia’s chemical and biological weapons production capabilities, and items needed for advanced production and development capabilities that enable advanced manufacturing across various industries;
- Imposed controls on quantum computing-related hardware, software, and technology;
- Added Belarus to the scope of industry sector sanctions that currently apply only to Russia;
- Expanded the “military end user” and “military-intelligence end user” controls. Specifically, it applies the Russian/Belarusian-Military End User Foreign Direct Product (“FDP”) rule to entities located outside of Russia and Belarus that were previously added to the Entity List for having continued to supply Russian entities on the Entity List, or are under sanctions since Russia’s further invasion of Ukraine; and
- Refined existing controls on Russia and Belarus to more closely align with requirements implemented by allies, by adding additional dollar-value exclusion thresholds for “luxury goods.”
EU Extends Ukraine-Related Sanctions: On September 9, 2022, the EU amended Decision 2014/119/CFSP to apply until March 6, 2023. Decision 2014/119/CFSP describes asset freezes imposed on persons that misappropriated Ukrainian state funds or committed human rights abuses in Ukraine.
U.S. Department of Treasury Publishes Preliminary Guidance on Russian Oil Price Cap: On September 9, 2022, the U.S. Department of the Treasury published preliminary guidance on implementation the G7’s proposed price cap on Russian oil. The G7, EU, and U.S. will implement a ban on maritime services for Russian oil, but will exempt jurisdictions or actors that purchase seaborne Russia oil at or below the price cap. The ban will take effect on December 5, 2022, for maritime transportation of crude oil and on February 5, 2023, for maritime transportation of petroleum products. The preliminary guidance sets forth OFAC’s diligence and recordkeeping expectations for various participants involved in the purchase, transport, financing, and insurance of the sale and shipment of Russia-origin oil and petroleum. The price cap will be set by the participating countries through a consultative process. Russian-origin oil is still prohibited from being imported into the U.S. under Executive Order 14066.
EU Suspends Visa Agreement with Russia: On September 9, 2022, the EU announced it would suspend its reciprocal visa agreement with Russia. The agreement previously allowed EU and Russian citizens to obtain visas for stays of no more than 90 days per period of 180 days to promote economic and cultural ties. The EU suspended the short-stay visas effective September 12, 2022.