Reed Smith News Flashes

On February 21, 2022, President Biden signed an executive order to respond to President Putin recognizing Ukraine’s Donetsk People’s Republic (DNR) and Luhansk People’s Republic (LNR) regions as “independent” states. Effective immediately, the executive order prohibits:

  • New investment in the DNR and LNR regions (the “Covered Regions”);
  • Direct or indirect import of any goods, services, or technology into the United States from the Covered Regions;
  • Direct or indirect export, reexport, sale, or supply of any goods, services, or technology from the United States or by a U.S. person to the Covered Regions; and
  • U.S. persons from approving, financing, facilitating, or guaranteeing a foreign person’s transaction that would violate the executive order if a U.S. person performed the transaction.

The executive order also authorizes the secretary of the Treasury to impose sanctions on, among other things, persons who operate in the Covered Regions or are leaders of entities operating in the Covered Regions (e.g., officials, senior executives, members of the board of directors).

The Department of Commerce’s Bureau of Industry and Security (BIS) already required a license to export, reexport, or transfer any items subject to the Export Administration Regulations to the Covered Regions. BIS reviews licenses for the Covered Regions with a presumption of denial.1