Type: Client Alerts
Over the past six months, the United States and the European Union have coordinated efforts through sanctions and trade controls to respond to Russian activity in Crimea and Ukraine. Following a long series of incremental changes to the sanctions and trade controls by the respective government authorities (which are described in detail in our regular client alerts and blogs), this alert provides a summary of the state of U.S. and EU sanctions on Russia as of September 24, 2014.
As described in more detail below, there is a high level of consistency between the sanctions and trade controls to include a similar approach to: asset freezes; controls on financing directed at the oil, gas, energy, and defense industries; restrictions on access to capital markets; controls on goods and services for the Russian military and other military end users in Russia; and controls on certain dual use items. However, there continue to be some nuanced differences between the two approaches, including variance in the persons subject to asset blocks, differences on the controls applicable to imports and investments in infrastructure, and how the specific prohibitions are implemented by the respective government agencies.
The U.S. sanctions on Russia are focused on the financial services, energy, and defense industries. The sanctions contain a variety of targeted prohibitions that have increasingly expanded the scope of the sanctions program, to include:
- Designating or blocking certain Russian individuals and entities, and an important change in the Office of Foreign Assets Control (“OFAC”) policy on entities owned by blocked persons
- Limiting the availability of debt financing for certain Russian financial institutions
- Prohibiting the provision of goods, services, and technology in support of certain activities relating to the exploration or production of oil or gas in Russia, its claimed maritime area, or “extending from its territory”
- Restrictions on the supply of certain items (a) to the Russian military or other military end-users in Russia; and (b) for use in oil or gas exploration or production in Russia, including Arctic offshore locations or shale formations
- Restrictive licensing policies for export activities involving Russian-made defense articles (including spacecraft) and defense articles intended for end-use in Russia
The sanctions include both economic measures administered by OFAC and export controls administered by the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”), and the U.S. Department of State, Directorate of Defense Trade Controls (“DDTC”).
Download the PDF to learn more!
Client Alert 2014-255