Today, the United States followed the European Union and United Kingdom in imposing sanctions on 19 Russian oligarchs and their family members and close associates.

Alisher Usmanov, an oligarch with vast holdings, was among those added to the U.S. List of Specially Designated Nationals (SDN List).  However, U.S. persons are authorized to continue to engage

Today, the European Union announced that it would close EU airspace to all Russian-owned, Russian registered, or Russian-controlled aircraft, including private aircraft owned by the Russian elite.  The bloc’s move follows similar measures adopted by a growing number of Member States in recent days.

The EU will also impose sanctions on Russia Today and Sputnik,

Today, the United States, European Union, and allies issued a joint statement pledging additional sanctions on Russia in response to the escalating conflict in Ukraine.  While the details remain to be determined, the countries pledged new sanctions that will cut off certain Russian banks from the SWIFT interbank messaging system and sanctions that will restrict certain transactions by the Russian Central Bank.  The signatories also indicated that they will launch a transatlantic task force dedicated to identifying and freezing the assets of sanctioned parties.

The White House separately announced yesterday that the Russian Direct Investment Fund (RDIF) would be subject to full U.S. blocking sanctions.  The RDIF operates as a sovereign wealth fund and holds stakes in an array of businesses in Russia.

The sanctions landscape continues to rapidly evolve.  Companies with exposure to the Russian market should continue to monitor these developments.

Feb. 27, 2022 Update: Japan will also adopt these measures.

The full joint statement is below the break.

Continue Reading Western countries pledge sanctions related to SWIFT & Russia’s Central Bank

In a move coordinated with U.S. allies, the United States imposed a “first tranche” of sanctions on Russia today following that country’s recognition of the Donetsk People’s Republic (DNR) and Luhansk People’s Republic (LNR) as independent countries.  These measures follow the imposition of a U.S. embargo on the separatist regions yesterday and U.S. government officials, including President Biden, emphasized that additional sanctions are possible.

Today’s action adds the Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank (VEB) and Promsvyazbank Public Joint Stock Company (PSB), along with 42 of their subsidiaries, to the SDN List.  The move effectively cuts the banks off from the U.S. financial system, and will likely result in global non-U.S. financial institutions cutting ties with the banks.  The United States also extended sanctions on dealings in Russian sovereign debt, prohibiting U.S. financial institutions from participating in the secondary debt market for ruble or non-ruble denominated bonds issued after March 1, 2022.


The addition of VEB, PSB, and their subsidiaries to the SDN List means that U.S. persons, including U.S. companies and financial institutions, U.S. citizens and permanent residents, and any persons located in the United States, are prohibited from conducting direct or indirect dealings with the banks, unless authorized by the U.S. Office of Foreign Assets Control (OFAC).  Any VEB or PSB property or interests in property in the possession or control of U.S. persons must be formally blocked (frozen) and reported to OFAC within 10 days, unless a license applies.  Non-U.S. persons are also prohibited from engaging in transactions or other business dealings involving the banks if those activities have a direct or indirect nexus with the United States or U.S. persons.  Non-U.S. financial institutions and companies could also be subject to secondary sanctions, including potentially being added to the SDN List themselves, if they conduct a “significant” transaction with either institution following the imposition of sanctions.

U.S. persons are authorized to conduct transactions ordinarily incident and necessary to the wind down of preexisting dealings with VEB through 12:01 am EST on March 24, 2022 pursuant to the newly issued General License No. 3 to E.O. 14024 and to engage in certain transactions involving VEB that are ordinarily incident and necessary to the servicing of Russian sovereign bonds issued before March 1, 2022 pursuant to General License No. 2.

The full list of subsidiaries identified by OFAC in today’s announcement are provided below.

More Banks Could be Targeted

 The Secretary of the Treasury issued a formal notice today authorizing further sanctions on any financial institution in Russia under E.O. 14024, paving the way for additional sanctions on the Russian financial industry.  A Fact Sheet issued by the White House today notes that over 80 percent of Russia’s foreign exchange transactions are in U.S. dollars and half of Russia’s foreign trade is conducted in dollars.  Today’s notice is a warning that the U.S. could cut off Russia’s access to U.S. dollar transactions by imposing broader sanctions on the financial industry in Russia, a move that would have significant impacts for companies that do business in or with Russia.

Secondary Market Restrictions on Sovereign Debt

OFAC expanded existing sanctions on Russian sovereign debt by issuing Directive 1A to E.O. 14024.  The updated Directive prohibits U.S. financial institutions from participating in the secondary debt market for ruble or non-ruble denominated bonds issued by the Russian Central Bank, National Wealth Fund, or Ministry of Finance after March 1, 2022.  The Directive applies to all U.S. financial institutions in the United States, but not to their foreign branches, offices, or agencies.

Russian Elites

OFAC added three Russian individuals to the SDN List – Denis Aleksandrovich Bortnikov, an executive with VTB Bank, Petr Mikhailovich Fradkov, the Chairman and CEO of PSB, and Sergei Vladilenovich Kiriyenko, the CEO of VK Group, the parent company of Russia’s top social media platform, VKontakte.

Allied Measures

U.S. allies have imposed, or are preparing to impose, sanctions on Russia in response to the situation in Ukraine.  Germany announced today that it would suspend the certification process for the Nord Stream 2 pipeline.  The United Kingdom imposed limited sanctions, including sanctions on PSB, earlier today.  The European Union has approved a raft of sanctions measures that are likely to be similar in scope to the sanctions imposed by the United States.  Canada, Australia, and Japan have also indicated that new sanctions on Russia will be issued.

Please contact our sanctions team with any questions about these and further developments.
Continue Reading More U.S. Sanctions on Russia: VEB, PSB, & Russian Sovereign Debt

Yesterday, the Biden Administration released the results of a broad review of U.S. economic sanctions policy following two decades of expanding use of sanctions as a foreign policy tool.  The report recognizes that U.S. sanctions policy must evolve to confront changes to the global payments system, including the rise of digital currencies, reduced use of

Today, the United States announced new targeted sanctions, export control restrictions, and an arms embargo on Russia after the poisoning and imprisonment of Russian opposition leader Alexey Navalny.  All three of the agencies with primary authority to regulate exports – the Directorate of Defense Trade Controls (DDTC) at the State Department, the Bureau of Industry

Today, President Biden issued an Executive Order (E.O.) that authorizes new U.S. sanctions on Burma in response to the recent military coup in that country.  The E.O. allows the U.S. Office of Foreign Assets Control (OFAC) to impose sanctions on the country’s military leadership and could lead to broader sanctions on government-controlled ministries and companies

On January 15, 2021, the Bureau of Industry and Security (BIS) published an Interim Final Rule to implement new end-user and end use controls mandated by the Export Control Reform Act of 2018 (ECRA).

Most notably, the rule adds a new control that will require U.S. persons to obtain a license before “supporting” certain “military-intelligence”

Today, the Bureau of Industry and Security (BIS) announced that it will create a new “Military End-User List” (MEU List) to help exporters comply with the recently expanded military end-use and end-user restrictions (MEU Rule) that apply to exports of certain items to China, Russia, and Venezuela.  The current MEU List includes 102