The new executive order
The EO, “Blocking Property with Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation” (April 15 EO), authorizes the Office of Foreign Assets Control (OFAC) and the Department of State to target persons operating in the technology or defense sector of the Russian economy, and any other sector of the Russian economy, as determined by the Secretary of Treasury, with blocking sanctions. Although prior to the April 15 EO, the United States had already targeted Russia’s defense, financial, and energy sectors under other legal authorities, the Biden administration’s inclusion of the technology sector, and identification of the use of digital currencies as a means to evade sanctions, could lead to the designation of other technology companies.
In addition to targeting Russia’s technology and defense sector, the April 15 EO immediately authorizes sanctions on persons involved in certain actions on behalf of the Russian government. Specifically, the April 15 EO authorizes the imposition of sanctions on persons determined to have engaged in or attempted to engage in the following activities: malevolent cyber-enabled activities; obstruction in a U.S. or other foreign government election; actions or policies that undercut democracy in the United States or abroad; transnational corruption; inflicting bodily harm to or causing the death of a U.S. person, citizen, or national of a U.S. ally; activities that threaten the tranquillity, safety, political strength, or territorial cohesion of the United States, its partners, or allies; or organizing transactions to evade U.S. sanctions, including through the use of digital currencies or assets.
The April 15 EO also authorizes sanctions on:
- Russian persons or companies determined “to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of a government” subject to blocking sanctions including the governments of Cuba, Iran, Syria, North Korea, and Venezuela; and
- Russian persons or companies determined to be complicit in, responsible for, or to have engaged in or attempted to engage in, cutting or interfering with energy or gas supplies to Asia, Europe, or the Caucasus.
Finally, and likely the most relevant to persons with Russian business, the April 15 EO authorizes sanctions on any person determined to have materially assisted, sponsored, or provided certain forms of support for, or goods or services to or for the aid of any person who is currently or becomes designated under the April 15 EO. Practically speaking, this means that certain dealings by non-U.S. persons with persons designated under the April 15 EO will give rise to a sanctions risk.