United States

*Content last updated on May 16 at 19:00 GMT. Check back for regular updates.

Territory-based Sanctions

On February 21, 2022, the Biden Administration issued Executive Order (EO) 14065 prohibiting new investment, trade in goods and services, and financing by U.S. persons with respect to the DNR and LNR regions of Ukraine.

We understand the administration would likely consider any investment or trade in goods or services initiated after the date of the issuance of the EO (February 21, 2022), to be “new” activity. The EO also allows the United States to impose sanctions on anyone determined to be operating in the DNR or LNR regions. The full text of the EO is available here.

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued six general licenses (GLs) authorizing certain activity in the DNR and LNR regions. These GLs authorize:

• Transactions ordinarily incident to the winding down of transactions involving the DNR and LNR regions, through March 23, 2022;
• Exports of agricultural commodities, medicine, and medical devices, as well as their components, replacement parts, and software, to the DNR and LNR regions;
• Transactions for the conduct of the official business of certain international aid organizations;
• Transactions ordinarily incident to the transfer of non-commercial, personal remittances to or from the DNR and LNR regions;
• Transactions ordinarily incident and necessary to telecommunications and mail; and
• Transactions ordinarily incident and necessary to the provision of internet services.

On March 11, 2022, OFAC issued Ukraine-related GL 23, authorizing certain transactions prohibited by EO 14065. GL 23 authorizes transactions by nongovernmental organizations ordinarily incident and necessary to certain activities in the DNR, LNR, and other designated regions, including activities to support:

• Humanitarian projects for basic human needs, democracy building, and education;
• Non-commercial development directly benefiting the people of such regions; and
• Environmental and natural resources protection.

On March 18, 2022, OFAC issued Ukraine-related GL 24 authorizing transactions related to the provision or receipt of civil maritime services performed by individuals ordinarily resident in the DNR, LNR, or other designated regions, provided services are performed outside of these regions and not on behalf of any entity in these regions.

On March 24, 2022, OFAC issued Ukraine-related GL 25, authorizing news reporting organizations and certain employees (including journalists) who are U.S. persons to engage in certain transactions involving the DNR, LNR, and other designated regions that are ordinarily incident and necessary to their journalistic activities in these regions. Transactions involving persons blocked under EO 13685 and EO 14065 remain prohibited.

Sanctions on Russian Entities and Individuals

EO 14024, issued April 15, 2021, authorizes sanctions against individuals and entities within the financial services, technology, defense, and other related material sectors of the Russian economy, as well as any other sectors as may be determined by the Secretary of Treasury in consultation with the Secretary of State. On March 31, 2022, the Secretary of Treasury expanded Russian sanctions authority under EO 14024 to include the aerospace, marine, and electronics sectors of the Russian economy. This expansion seeks to enable the United States to impose additional costs against Russia in sectors “strategically important to Russia’s economic ambitions, long-term technological development, and defense industrial base.”

Sanctions on Russian Banks and State-Owned Enterprises

On February 22, 2022, pursuant to EO 14024, OFAC sanctioned two Russian banks: the State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank (VEB) and Promsvyazbank Public Joint Stock Company (PSB), as well as the 42 subsidiaries of these two banks.

OFAC issued two GLs related to VEB authorizing:

• Transactions ordinarily incident and necessary to the servicing of bonds issued before March 1, 2022 by the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation.
• Transactions ordinarily incident and necessary to the winding down of transactions involving VEB through March 24, 2022.

On February 24, 2022, the United States imposed full sanctions on four additional Russian banks — VTB Bank, Otkritie, Novikom, and Sovcom — as well as subsidiaries owned or controlled by those entities, under EO 14024 of April 15, 2022.

Also on February 24, 2022, the United States also issued Directive 2 under EO 14024, imposing correspondent and payable-through account sanctions on Sberbank, and Directive 3 under EO 14024, prohibiting dealings in new debt and equity of certain Russian financial institutions and Russian-owned state enterprises.

• Correspondent Account-related Sanctions: Directive 2, “Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions” (the Russia-related CAPTA Directive), imposes correspondent and payable-through account sanctions on Sberbank (and subsidiaries owned or controlled by Sberbank). As a result of these sanctions, beginning on March 26, 2022, U.S. financial institutions were prohibited from (1) the opening or maintaining of a correspondent account or payable-through account for or on behalf of Sberbank; and (2) the processing of a transaction involving Sberbank.
• Debt and Equity Restrictions: Directive 3, “Prohibitions Related to New Debt and Equity of Certain Russia-related Entities” (the Russia-related Entities Directive), prohibits transactions and dealings by U.S. persons in new debt of longer than 14 days’ maturity and new equity of certain Russian state-owned enterprises and entities that operate in the financial services sector of the Russian Federation economy. Thirteen Russian entities, including Alfa Bank, Sberbank, and Gazprom, are subject to these new debt-related restrictions, six of which were already subject to certain debt or other restrictions under U.S. sectoral sanctions.

As of April 6, 2022, the United States imposed full blocking sanctions on Sberbank and Alfa Bank, as well as subsidiaries owned or controlled by those entities. On April 7, 2022, OFAC sanctioned Russian state-owned enterprises Alrosa and United Shipbuilding Corporation. Alrosa is the world’s largest diamond mining company, accounting for 90 percent of Russia’s diamond mining capacity, and was previously targeted by Directive 3, discussed above. OFAC redesignated United Shipbuilding Corporation, the company responsible for constructing most of Russia’s warships, along with its subsidiaries and board members.

GLs Related to Sanctions on Russian Banks and State-Owned Enterprises

On February 24, 2022, OFAC also issued a number of GLs authorizing certain transactions that might otherwise be prohibited under these designations, the Russia-related CAPTA Directive, or the Russia-related Entities Directive, discussed above:

• Russia-related GL 8 authorizes all transactions involving VEB, Otkritie, Sberbank, VTB Bank, or Sovcom (or their sanctioned subsidiaries) that are “related to energy” until June 24, 2022.
  • On February 28, 2022, OFAC replaced GL 8 with GL 8A, which expanded this authorization to address dealings related to the Central Bank of Russia.
  • On April 6, 2022, OFAC replaced GL 8A with GL 8B, which further expanded the authorization to address dealings related to Alfa Bank.
• Russia-related GL 9 authorizes certain transactions ordinarily incident and necessary to dealings in debt or equity of VEB, Otkritie, Sberbank, VTB Bank, and Sovcom (and their sanctioned subsidiaries) issued prior to February 24, 2022, until May 25, 2022, provided that any divestment or transfer of, or facilitation of divestment or transfer of, covered debt or equity must be to a non-U.S. person.
  • On March 2, 2022, OFAC replaced GL 9 with GL 9A, which expanded this authorization to address dealings related to entities sanctioned under Directive 4, as discussed below.
  • On April 6, 2022, OFAC replaced GL 9A with GL 9B, which further expanded this authorization to address dealings in debt or equity of Alfa Bank (and its sanctioned subsidiaries) issued prior to April 6, 2022, until June 30, 2022.
  • On April 7, 2022, OFAC replaced GL 9B with GL 9C, which further expanded this authorization to address dealings in debt or equity of Alrosa issued prior to April 7, 2022, until July 1, 2022.
• Russia-related GL 10 authorizes certain transactions ordinarily incident and necessary to the winding down of derivative contracts entered into prior to 4:00 p.m. ET on February 24, 2022, that (i) include VEB, Otkritie, Sberbank, VTB Bank, or Sovcom (or their sanctioned subsidiaries) as a counterparty, or (ii) are linked to debt or equity of VEB, Otkritie, Sberbank, VTB Bank, or Sovcom (or their sanctioned subsidiaries), until May 25, 2022, provided that any payments to a blocked person are made into a blocked account.
  • On March 2, 2022, OFAC replaced GL 10 with GL 10A, which expanded this authorization to address dealings related to entities sanctioned under Directive 4, as discussed below.
  • On April 6, 2022, OFAC replaced GL 10A with GL 10B, which further expanded this authorization to address dealings related to Alfa Bank (and its sanctioned subsidiaries) for contracts entered into prior to 4:00 p.m. ET on April 6, 2022, until June 30, 2022.
  • On April 7, 2022, OFAC replaced GL 10B with GL 10C, which further expanded this authorization to address dealings related to Alrosa entered into prior to 4:00 p.m. ET on April 7, 2022, until July 1, 2022.
• Russia-related GL 11 previously authorized certain transactions ordinarily incident and necessary to the winding down of transactions involving Otkritie, Sovcom, or VTB Bank, or subsidiaries owned or controlled by such entities, until March 26, 2022.
• Russia-related GL 12 previously authorized U.S. persons to reject (as opposed to blocking) all transactions otherwise prohibited involving Otkritie, Sovcom, or VTB Bank, or subsidiaries owned or controlled by such entities, until March 26, 2022.

Note that Novikom Bank, which was designated by the United States on February 24, 2022, was not included in the above licenses. OFAC has not provided a reason for excluding this entity.

On April 6, 2022, OFAC issued the following additional GLs related to new sanctions on Sberbank and Alfa Bank:

• Russia-related GL 21 authorizes transactions ordinarily incident and necessary to the wind down of Sberbank CIB USA, Inc. (and its sanctioned subsidiaries) until June 7, 2022.
  • On April 7, 2022, OFAC replaced GL 21 with GL 21A, which expanded the wind-down authorization to include Alrosa USA, Inc.
• Russia-related GL 22 authorizes transactions ordinarily incident and necessary to the wind down of transactions involving Sberbank (and its sanctioned subsidiaries) until April 13, 2022. GL 22 does not authorize transactions prohibited under Directive 2.
• Russia-related GL 23 authorized transactions ordinarily incident and necessary to the wind down of transactions involving Alfa Bank (and its sanctioned subsidiaries) until May 6, 2022.

On April 7, 2022, OFAC issued Russia-related GL 24, which authorized transactions ordinarily incident and necessary to the wind down of transactions involving Alrosa, until May 7, 2022.

On April 12, 2022, OFAC issued GL 26, authorizing transactions ordinarily incident and necessary to the wind down of transactions involving Joint Stock Company SB Sberbank Kazakhstan, Sberbank Europe AG, or any entity in which Sberbank, directly or indirectly, owns a 50 percent or greater interest, until July 12, 2022. GL 26 does not authorize any transactions prohibited under Russia-related Directive 2.

• On May 5, 2022, OFAC replaced GL 26 with GL 26A, which expanded the authorization to include Sberbank (Switzerland) AG.

On April 20, 2022, OFAC sanctioned Public Joint Stock Company Transkapitalbank (TKB) and its subsidiary, Joint Stock Company Investtradebank, for involvement in activities to evade Russian sanctions. OFAC also issued two GLs related to this action:

• Russia-related GL 28 authorizes transactions ordinarily incident and necessary to the wind down of transactions involving TKB or any entity in which TKB, directly or indirectly, owns a 50 percent or greater interest, ultimately destined for Afghanistan in order to support the humanitarian crisis. GL 28 does not authorize any transactions prohibited under Russia-related Directive 2 or Directive 4, but U.S. persons may operate correspondent accounts on behalf of TKB solely to effect transactions authorized under the GL 28.
• Russia-related GL 29 authorizes transactions ordinarily incident and necessary to the wind down of transactions involving TKB or any entity in which TKB, directly or indirectly, owns a 50 percent or greater interest, until May 2022. GL 29 does not authorize any transactions prohibited under Russia-related Directive 2 or Directive 4.

Sanctions on Russian Individuals and Other Entities

On February 22, 2022, pursuant to EO 14024, OFAC sanctioned five Russian individuals. On February 24, 2022, OFAC sanctioned a number of additional Russian individuals.

On February 25, 2022, the United States directly sanctioned Russian President Vladimir Putin and Russian Minister of Foreign Affairs Sergei Lavrov, as well as other members of Russia’s Security Council. As OFAC reported at the time of such designations, “[i]t is exceedingly rare for Treasury to designate a head of state; President Putin joins a very small group that includes despots such as Kim Jong Un, Alyaksandr Lukashenka, and Bashar al-Assad.”

On February 28, 2022, the U.S. sanctioned three entities critical to managing one of Russia’s key sovereign wealth funds: the Russian Direct Investment Fund (RDIF), its management company, and one of the managing company’s subsidiaries. OFAC reported that by blocking these entities, “OFAC is terminating yet another route through which Russia has benefitted from access to the U.S. financial system.” OFAC also sanctioned the CEO of RDIF and its managing company.

On March 3, 2022, OFAC sanctioned Russian oligarchs and family members “enabling Putin’s war of choice.” These sanctions include:

• Full blocking sanctions against eight Russian elites and their family members, as well as certain individuals’ company and property. This includes Alisher Burhanovich Usmanov, “one of Russia’s wealthiest individuals and a close ally of Putin”;
• Visa restrictions on 19 Russian oligarchs “known to direct, authorize, fund, significantly support, or carry out malign activities in support of Russia’s destabilizing foreign policy,” as well as 47 of their family members and close associates; and
• Full blocking sanctions against seven Russian organizations and 26 Russia- and Ukraine-based individuals involved in such organizations accused of spreading Russian disinformation regarding the invasion of Ukraine.

OFAC simultaneously issued Russia-related GL 15, which authorizes transactions involving any entity owned 50% or more, directly or indirectly, by Alisher Usmanov that is not listed on OFAC’s SDN List. Russia-related GL 15 also unblocks property and interests in property of blocked Usmanov entities and authorizes debits to accounts of such blocked entities at U.S. financial institutions.

Also on March 3, 2022, the State Department designated 22 Russian defense-related entities, including those producing fighter aircraft and vehicles, electronic warfare systems, missiles, and unmanned aerial vehicles for Russia’s military.

On March 11, 2022, OFAC sanctioned another round of Russian elites. These individuals included executives of newly sanctioned Russian banks and members of the Russian Duma who sponsored legislation to recognize the DNR and LNR regions as independent.

On March 25, 2022, OFAC sanctioned more than 400 additional individuals and entities, including the Russian Duma and its members, Russian oligarch Gennady Timchenko, executives of Russian financial institutions Sberbank and Sovcombank, and Russian defense state-owned enterprises.

On March 31, 2022, OFAC sanctioned another 21 entities and 13 individuals for their involvement in sanctions evasion networks and malicious cyber activities. One such designated entity is Russia’s largest chipmaker responsible for over half of Russian exports of microelectronics.

On April 6, 2022, OFAC sanctioned several Russian elites, including President Putin’s two daughters, members of Russia’s Security Council, and family members of Russian Foreign Minister Sergei Lavrov.

On April 20, 2022, OFAC designated a number of individuals and entities, including:

• Konstantin Malofeyev for his operation of a worldwide sanctions evasion network (adding to his previous designation under EO 13660 for activities in Ukraine); and
• a number of organizations and individuals connected with Malofeyev, as well as companies owned or operated by such individuals and companies which have acted on their behalf in the financial services, civil and military equipment, property services, and legal services sectors.

Also on April 20, 2022, the State Department imposed visa restrictions against the following individuals:

• 635 Russian nationals involved in suppressing dissent in Russia, threatening Ukraine’s territorial integrity, and engaging in human rights abuses in Ukraine;
• 3 Russian officials for gross violations of human rights; and
• 17 individuals responsible for undermining democracy in Belarus.

Additional Sectoral Sanctions

On May 8, 2022, OFAC issued a determination pursuant to EO 14024 authorizing the imposition of sectoral sanctions against individuals or entities in the accounting, trust and corporate formation services, and management consulting sectors of the Russian economy. Through its FAQs, OFAC defined these sectors as follows:

• “Accounting sector” includes the measurement, processing, and transfer of financial data about economic entities.
• “Trust and corporate formation services sector” includes assisting persons in forming or structuring legal persons; acting or arranging for another person to act as a certain representative or agent of legal persons; and providing certain administrative services for legal persons and trusts.
• “Management consulting sector” includes strategic advice; organizational and systems planning, evaluation, and selection; development or evaluation of marketing programs or implementation; mergers, acquisitions, and organizational structure; staff augmentation and human resources policies and practices; and brand management.

Sovereign Debt Restrictions

On February 22, 2022, OFAC increased restrictions on dealings in Russia’s sovereign debt. The new measure, Directive 1A under EO 14024, replaces and supersedes Directive 1, enacted April 15, 2021, which prohibited participation by U.S. entities in the primary market for ruble- or non-ruble-denominated bonds issued by the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation, as well as the lending of funds to such institutions.

These prohibitions remain in effect under new Directive 1A, which also extends sovereign debt restrictions to cover participation in the secondary market for ruble- and non-ruble-denominated bonds issued after March 1, 2022 by these three institutions.

Russia is also prohibited from using funds subject to U.S. jurisdiction to make payments on Russian sovereign debt.

Nord Stream 2 Sanctions

On February 23, 2022, the Biden Administration announced sanctions on the Nord Stream 2 pipeline.

Shortly thereafter, OFAC added the Nord Stream 2 pipeline to the Specially Designated Nationals List (SDN List), as well as Matthias Warnig, CEO of the Nord Stream AG. OFAC also issued General License 4, authorizing transactions “ordinarily incident and necessary to the wind-down of transactions involving Nord Stream 2 AG” through 12:01 a.m. ET on March 2, 2022.

Restrictions on Dealings with the Russian Central Bank Assets and Sovereign Wealth Funds

On February 28, 2022, OFAC issued Directive 4 under EO 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation.” Pursuant to this Directive, United States persons are prohibited from engaging in “any transaction” involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation (the Directive 4 entities). OFAC stated that this Directive “will disrupt Russia’s attempts to prop up its rapidly depreciating currency by restricting global supplies of the ruble and access to reserves that Russia may try to exchange to support the ruble.”

• On March 2, 2022, OFAC issued Russia-related GLs 9A and 10A, expanding previous GLs 9 and 10 to authorize certain transactions otherwise prohibited under Directive 4. Russia-related GL 9A authorizes transactions ordinarily incident and necessary to the receipt of interest, dividend, or maturity payments in connection with the debt or equity of any of the Directive 4 entities issued before March 1, 2022, until May 25, 2022.
  • OFAC replaced GL 9A with GL 9B on April 6, 2022, and replaced GL 9B with GL 9C on April 7, 2022, preserving the authorization for Directive 4 entities under GL 9A.
• Russia-related GL 10A authorizes transactions ordinarily incident and necessary to the wind down of derivative contracts, repurchase agreements, or reverse repurchase agreements in which any of the Directive 4 entities is a counterparty and entered into prior to March 1, 2022, until May 25, 2022.
  • OFAC replaced GL 10A with GL 10B on April 6, 2022, and replaced GL 10B with GL 10C on April 7, 2022, preserving the authorization for Directive 4 entities under GL 10A.

Also on March 2, 2022, OFAC issued Russia-related GLs 13 and 14 relevant to restrictions imposed under Directive 4.

• Russia-related GL 13 authorizes U.S. persons to pay taxes, fees, or import duties and purchase or receive permits, licenses, registrations, or certifications for transactions otherwise prohibited by Directive 4 that are ordinarily incident and necessary to such persons’ day-to-day operations in Russia, until June 24, 2022.
• Russia-related GL 14 authorizes transactions involving the Directive 4 entities in which the relevant entity acts solely as an operator of a clearing and settlement system, provided (i) there is no transfer of assets to or from such entity (unless separately authorized), and (ii) no such entity is a counterparty or beneficiary to the transaction (unless separately authorized).

General Russia-related GLs

On February 24, 2022 OFAC issued the following generally applicable GLs:

• Russia-related GL 5 authorizes certain transactions related to the official business of certain international organizations and entities.
• Russia-related GL 6 authorizes certain transactions ordinarily incident and necessary to: (1) the export of agricultural commodities, medicine, and medical devices to, from, or transiting Russia; or (2) the prevention, diagnosis, or treatment of COVID-19.
  • On March 24, 2022, OFAC replaced GL 6 with GL 6A, which expanded this authorization to include all clinical trials and medical research activities in effect as of March 24. GL 6A now also authorizes transactions prohibited by all orders issued pursuant to the national emergency declared in EO 14024, except EO 14066 and EO 14068.
• Russia-related GL 7 authorizes certain transactions ordinarily incident and necessary to payments and services rendered in connection with overflights of, or emergency landings in, Russia.
  • On May 5, 2022, OFAC replaced GL 7 with GL 7A, clarifying the scope of the license.

On April 7, 2022, OFAC issued Russia-related GL 25, which authorizes all transactions ordinarily incident and necessary to the receipt or transmission of telecommunications and certain internet-based telecommunications involving Russia. GL 25 does not authorize transactions prohibited under Directive 2 or transactions prohibited by EO 14066 or EO 14068.

On April 19, 2022, OFAC issued Russia-related GL 27, which authorizes transactions by nongovernmental organizations ordinarily incident and necessary to certain activities in Ukraine and Russia, including activities to support:

• Humanitarian projects for basic human needs, democracy building, and education;
• Non-commercial development directly benefiting the people of such regions; and
• Environmental and natural resources protection.

GL 27 does not authorize transactions prohibited under Directive 2 or transactions prohibited by EO 14066 or EO 14068.

On May 5, 2022, OFAC issued Russia-related GL 31, which authorizes transactions in connection with intellectual property (“IP”) protection in Russia, including the filing and prosecution of applications for patents, trademarks, copyrights, or other forms of IP protection, as well as the receipt of protection, renewal or maintenance of protection, and participation in opposition or infringement proceedings with respect to such IP protection. GL 31 does not authorize transactions prohibited under Directive 2 or transactions prohibited by EO 14066 or EO 14068.

Belarusian Sanctions

On February 24, 2022, the United States also sanctioned 24 Belarusian individuals and entities due to Belarus’s support for, and facilitation of, the invasion. The designations focus on Belarus’s defense sector and financial institutions, “two areas in which Belarus has especially close ties to Russia.”

OFAC simultaneously issued two GLs related to the Belarus designations:

• Belarus-related GL 6 authorizes certain transactions related to the official business of the U.S. government.
• Belarus-related GL 7 authorizes certain transactions related to the official business of certain international organizations and entities.

New Russia/Belarus Export Controls

On February 24, 2022, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) imposed a series of new export controls on Russia under the Export Administration Regulations (EAR), which cover commercial and “dual use” items (i.e., items with both commercial and military applications). While the new controls were originally intended to target Russia’s defense, aerospace, and maritime sectors, the scope is far broader. On March 2, 2022, BIS revised these controls to restrict exports to Belarus and to expand the range of products covered. On April 8, 2022, BIS further expanded the range of products covered.

As of February 24, 2022, the BIS rule:

• Adds new license requirements under 15 C.F.R. § 746.8 for all Export Control Classification Numbers (ECCNs) in Categories 3-9 of the Commerce Control List (CCL) to Russia or, in some cases, Russian nationals located outside of Russia. These categories broadly cover commercial electronics, computers, telecommunications, information security, sensors and lasers, navigation and avionics, marine, aerospace, and propulsion;
• Expands U.S. jurisdiction over items produced outside the United States using certain U.S.-origin software/technology or equipment derived from U.S.-origin software/technology. The new foreign direct product (FDP) rules include a Russia-wide FDP rule under 15 C.F.R. § 734.9 and a more stringent Russian military end-user FDP rule applicable to certain entities on the BIS Entity List;
• Adopts a policy of denial with respect to the review of most license applications involving Russia and significantly restricts the use of EAR license exceptions for Russia exports;
• Expands restrictions on Russian “military end-users” and “military end-uses” to cover all items subject to the EAR (except EAR99 food and medicine and mass-market encryption items not destined for Russian government- or state-owned entities) (though see note below on revision to the Russian FDP rule as related to mass-market encryption items);
• Adds 47 new Russian entities to the BIS Entity List, including 45 entities previously on the Military End User List. All of these entities, as well as two existing Russian entities on the Entity List, will be subject to the new Russian military end-user FDP; and
• Imposes comprehensive restrictions on exports of any item subject to EAR jurisdiction to the “so-called” DNR and LNR regions.

On March 2, 2022, BIS revised the new Russia export controls. This revision:

• Expands the recently issued controls on Russia to Belarus and Belarusian “military end-users,” in light of Belarus’s support and involvement in Russia’s invasion of Ukraine. As a result, Belarus will be subject to all the same restrictions imposed on Russia as of February 24, 2022, including the new FDP and military end-user FDR rules;
• Revises license exceptions to Belarus and Russia, including restricting the availability of a license exception for Russia-related aircraft;
• Adds two Belarusian entities to the BIS Entity List, and subjects these entities to the new Russia/Belarus military end-user FDP rule; and
• Expands restrictions on the new Russia/Belarus military end-user FDP rule to cover all items subject to the EAR (except EAR99 food and medicine), eliminating the exception for mass-market encryption items not destined for Russian government- or state-owned entities. Note this revision affects the FDP Rule as related to both Russia and Belarus, i.e., it effectively revises the Russia FDP rule issued February 24, 2022.

In addition, BIS expanded existing sanctions against the Russian energy sector. Existing sanctions prohibited the export of certain items where a person had “knowledge” that the item would be used by persons operating in Russia’s energy sector. Pursuant to new controls, a license is now required to export to and within Russia certain oil refining technologies, identified in the new Supplement No. 4 to Part 746, whether or not a person has “knowledge” the items will be used by persons operating in Russia’s energy sector. Licenses will generally be reviewed under a policy of denial, except for items necessary for health and safety, for which applications will be reviewed on a case-by-case basis.

Also on March 2, 2022, BIS added new entities to the Entity List, including 81 entities in Russia and 10 others across Belize, Estonia, Kazakhstan, Latvia, Malta, Singapore, Slovakia, Spain, and the United Kingdom. Such designations target entities “that have been involved in, contributed to, or otherwise supported the Russian and Belarusian security services, military and defense sectors, and/or military and defense research and development efforts,” and are intended to prevent Russia from obtaining U.S. technology that supports its technical maintenance and innovation.

On April 1, 2022, BIS added 120 new entities to the Entity List, 24 in Belarus and 96 in Russia. Such designations are aimed at “restricting Russia’s access to items subject to the EAR that allow it to project power and fulfil its strategic ambitions.” For 95 of the 120 newly added entities, BIS further designated them as “military end-users,” subjecting them to the new Russia/Belarus FDP military end-user rule.

On April 8, 2022, BIS further revised the Russia/Belarus export controls. In particular, these revisions:

• expand the new license requirement under 15 C.F.R. § 746.8 to cover CCL Categories 0-2 (nuclear materials facilities and equipment, other materials, chemicals, microorganisms, toxins, and materials processing) such that all items on the CCL now require a license for export to Russia and Belarus; and
• expand the new Russia/Belarus FDP rule under 15 C.F.R. § 734.9 to apply to all items on the CCL such that all foreign-produced items derived from items on the CCL are subject to the new Russia/Belarus FDP rule.

In addition, BIS expanded the restriction of the availability of a license exception for certain aircraft to Belarus in light of Belarus’s support for Russia’s aggression against Ukraine. Accordingly, the license exception for aircraft, vessels, and spacecraft under 15 C.F.R. § 740.15 is not available for aircraft registered in, owned or controlled by, or under charter or lease by Belarus or Russia or a Belarusian or Russian national.

• Since the imposition of this restriction, BIS has maintained a list of Russian- and Belarusian-owned/operated aircraft in violation of U.S. export controls. As of April 14, 2022, the list included 153 aircraft.

On May 9, 2022, BIS further revised the Russia/Belarus export controls to align more closely with EU export controls. Specifically, BIS expanded the license requirements for export to Russia to include items supporting commercial and industrial operations, such as wood products and construction machinery. The new license requirement applies to 205 six-digit HTS codes and 478 Schedule B numbers otherwise classified as EAR99, now added to Supplement No. 4 to Part 746. The HTS Code and Schedule B numbers provided are intended only to assist exporters with their responsibilities and do not indicate that all items classified under those HTS Codes or Schedule B numbers are subject to the restrictions.

SWIFT Access

On March 2, 2022, the EU issued a regulation prohibiting, as of March 12, 2022, the provision of specialized financial messaging services (i.e., SWIFT), which are used to exchange financial data, to the following banks (and entities in Russia directly or indirectly owned 50% or more by these banks): Bank Otkritie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank, VEB, and VTB Bank. All of these banks were already sanctioned by the United States, but the loss of access to SWIFT means that now even banks outside the U.S., EU, and UK will have difficulty engaging in any transactions with these banks.

Restrictions on U.S. Airspace

On March 2, 2022, the U.S. closed American airspace to all Russian flights, including aircraft certified, operated, registered, or controlled by any person connected with Russia.

Restrictions on Imports, Exports, and New Investment

On March 8, 2022, the Biden Administration issued EO 14066 imposing restrictions on the Russian energy sector. The order prohibits:

• The importation into the United States of crude oil, petroleum, liquefied natural gas, coal, and related products of Russian origin; and
• New investment in the Russian energy sector by a U.S. person.

OFAC simultaneously issued Russia-related GL 16, which authorizes transactions ordinarily incident and necessary to the importation into the United States of prohibited products pursuant to contracts entered into prior to March 8 through April 22, 2022.

Russia-related GL 8B, discussed above, authorizes certain transactions “related to energy” involving Russian financial institutions. As noted, this GL remains in effect until June 24, 2022, but it does not authorize any transactions prohibited by EO 14066.

On March 11, 2022, the Biden Administration issued EO 14068 prohibiting the following additional activities related to Russia:

• The importation of fish, seafood, alcoholic beverages, and non-industrial diamonds of Russian origin;
• The exportation, re-exportation, sale, or supply of luxury goods from the United States or by a U.S. person to any person located in Russia; and
• The exportation, re-exportation, sale, or supply of U.S. dollar-denominated banknotes from the United States or by a U.S. person to the Russian government or any person located in Russia.

EO 14068 also established the authority for the Secretary of the Treasury to prohibit the importation of additional Russian-origin items as well as new investment in any sector of the Russian economy.

OFAC simultaneously issued several GLs related to these new restrictions:

• Russia-related GL 17 authorizes transactions ordinarily incident and necessary to the importation into the United States of Russian-origin fish, seafood, alcoholic beverages, and non-industrial diamonds pursuant to contracts entered into prior to March 11, through March 25, 2022. On March 24, 2022, OFAC replaced GL 17 with GL 17A, which extends the authorization related to fish and seafood to June 23, 2022. Russia-related GL 6A does not authorize any additional transactions prohibited by EO 14068.
• Russia-related GL 18 authorizes all transactions ordinarily incident and necessary to the transfer of U.S. dollar-denominated personal remittances from (i) the United States or a U.S. person to an individual in Russia, or (ii) a U.S. person in Russia. GL 18 does not authorize charitable donations to entities nor funds transfers for businesses.
• Russia-related GL 19 authorizes all transactions by U.S. persons in Russia ordinarily incident and necessary to their personal maintenance in Russia, including payments for housing, goods and services for personal use, taxes or fees, and permits, licenses, or public utilities.

On March 24, 2022, OFAC issued Russia-related GL 20 authorizing transactions ordinarily incident and necessary to the official business of third-country diplomatic or consular missions in Russia that are otherwise prohibited by EO 14024 or EO 14068, Section 1(a)(iv).

On April 6, 2022, the Biden Administration issued EO 14071, “Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression.” This EO prohibits (i) new investment in Russia by a U.S. person, wherever located, (ii) the export, sale, or supply from the U.S. or by a U.S. person, wherever located, of certain categories of services (to be later determined), and (iii) any approval, financing, facilitation, or guarantee by a U.S. person of such prohibited activities. EO 14071 does not apply to contracts entered into or licenses or permits granted prior to April 6, 2022.

OFAC has not yet defined the scope of “new investment” under EO 14071. However, based on OFAC’s definition of “new investment” under EO 14066, as provided in OFAC FAQ 1019 (March 8, 2022), we expect “new investment” under the EO of April 6, 2022 to be defined as “a transaction that constitutes a commitment or contribution of funds or other assets for, or a loan or other extension of credit to, new activities (not including maintenance or repair) located or occurring in the Russian Federation beginning on or after April 6, 2022.” We await OFAC’s guidance to confirm this definition and the general scope of the prohibition on new investment.

On May 8, 2022, OFAC defined certain service categories subject to prohibition (ii) of EO 14071, described above. That is, as of June 7, 2022, the United States prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States or by a U.S. person, wherever located, of accounting, trust and corporate formation, or management consulting services to any person located in the Russian Federation. This prohibition excludes:

• any service to an entity located in Russia that is owned, directly or indirectly, by a U.S. person; and
• any service in connection with the wind down or divestiture of an entity located in Russia not owned or controlled, directly or indirectly, by a Russian person.

OFAC defines accounting, trade and corporate formation, or management consulting services consistently with their meaning under the authorization for sectoral sanctions involving these service categories pursuant to EO 14024 (see “Additional Sectoral Sanctions” above). OFAC defines “Russian person” to mean a citizen or national of Russia, or an entity organized under the laws of Russia.

OFAC concurrently issued GLs 34 and 35 authorizing certain transactions prohibited under EO 14071:

• GL 34 authorizes transactions ordinarily incident and necessary to the wind down of the export, sale, or supply from the U.S. or by a U.S. person, wherever located, of accounting, trade and corporate formation, or management consulting services to any person located in Russia, until July 7, 2022.
• GL 35 authorizes transactions ordinarily incident and necessary to the export, sale, or supply from the U.S. or by a U.S. person, wherever located, of credit rating or auditing services to any person located in Russia, until August 20, 2022. In FAQ 1035, OFAC defined the activities covered by GL 35 as follows:
  • “Credit rating services” means services related to assessments of a borrower’s ability to meet financial commitments, including analysis of general creditworthiness or with respect to a specific debt or financial obligation.
  • “Auditing services” means examination or inspection of business records by an auditor, including checking and verifying accounts, statements, or other representation of the financial position or regulatory compliance of the auditee.

Application of Sanctions to Virtual Currency

On March 11, 2022, OFAC clarified that expansive sanctions against Russian entities and individuals apply to all transactions, whether in traditional currency or virtual currency.

On April 5, 2022, OFAC sanctioned Garantex Europe OU under EO 14024. Garantex is a cryptocurrency financial services provider known for its close ties to Russia.

On April 20, 2022, OFAC sanctioned Bitriver AG and its 10 Russia-based subsidiaries for involvement in Russia’s virtual currency mining industry.

Terminating Privileges at International Institutions for Trade and Finance

On March 11, 2022, the Biden Administration announced it would coordinate with leading global economies to deny Russia the benefits of its membership at the World Trade Organization (WTO), including most-favored-nation treatment, and to ensure that Russia does not receive funding from international financial institutions such as the International Monetary Fund and World Bank.

U.S. Congressional Action

On April 8, 2022, President Biden enacted new legislation related to Russia’s aggression against Ukraine. First, President Biden signed into law the “Suspending Normal Trade Relations with Russia and Belarus Act,” suspending nondiscriminatory tariff treatment for Russia and Belarus, known as most-favored-nation treatment at the WTO. Accordingly, duty rates set forth in column 2 of the Harmonized Tariff Schedule of the United States apply to Russia and Belarus as of April 9, 2022, and the President may increase duty rates applicable to Russia and Belarus until January 1, 2024. Restoration of normal trade relations with either country requires a written certification from the U.S. President that the President of such country has agreed to withdraw forces and cease military hostilities, poses no threat to any member of the North Atlantic Treaty Organization (NATO), and recognizes Ukraine’s right to independence. This law also instructs the U.S. Trade Representative to condemn aggression in Ukraine at the WTO, encourage other WTO members to suspend trade concessions with Russia and Belarus, seek to suspend Russia’s participation in the WTO, and seek to halt Belarus’s accession to the WTO.

Additionally, this law permanently authorizes the Global Magnitsky Human Rights Accountability Act (Magnitsky Act), which provides for the imposition of sanctions against persons engaging in gross violations of human rights and corruption. The Magnitsky Act was set to expire in December 2022.

Second, President Biden signed into law the “Ending Importation of Russian Oil Act,” which adds to the existing ban on the import of Russian oil imposed by OFAC on March 8, 2022. Consistent with any implementation actions under EO 14066, all products from the Russian Federation under Chapter 27 of the HTSUS are banned. The President can waive this prohibition for certain products upon certification to Congress that the President of Russia has agreed to withdraw forces and cease military hostilities, poses no threat to any member of NATO, and recognizes Ukraine’s right to independence.