Anti-Corruption & Compliance Blog

As the Russian invasion of Ukraine continues, the executive branch is mounting what the U.S. Department of Treasury (“Treasury”) calls a “historically unprecedented campaign of sanctions and export controls” aimed at Russian-connected financial institutions and individuals. The sanctions and export controls against Russia are continuously evolving, and the following list highlights some of the key developments since our last post about Russian sanctions in March 2022.

• On April 20, 2022, the Treasury’s Office of Foreign Assets Control “OFAC” issued sanctions against additional financial entities, including Transkapitalbank, Investtradebank, and BitRiver. It also designated Russia’s virtual currency mining industry, marking the first OFAC designation of virtual currency mining companies.
• On April 21, 2022, the executive branch banned Russian-affiliated vessels from entering U.S. ports, with limited exceptions only for maritime emergency situations and certain vessels transporting nuclear material and byproducts.
• On May 24, 2022, OFAC began to block Russia from administering funds to American bondholders by allowing an exceptions license to expire without renewal. Additionally, the U.S. Department of Commerce’s Bureau of Industry and Security revised Russia and Belarus export controls with the goal of enhancing enforcement against violators.
• On June 28, 2022, OFAC imposed financial sanctions on another 70 Russian entities and 29 Russian individuals. These sanctions largely target Russia’s aerospace and defense technology industries as well as individuals attempting to evade sanctions. The Treasury also banned importing gold that has originated from the Russian Federation.
• On September 29, 2022, the U.S. Justice Department announced an indictment against a U.S. citizen and three Russian citizens who are charged with violating recently-imposed Russian sanctions.
• On September 30, 2022, OFAC designated 14 additional persons in Russia’s military-industrial complex, including 2 international suppliers, and 278 additional members of Russia’s legislature for “enabling Russia’s sham referenda and attempt to annex sovereign Ukrainian territory.” The new guidance demonstrates an increased sanctions risk for international individuals acting outside of Russia to provide political or economic support to Russia in its efforts against Ukraine.
• On October 19, 2022, Russian procurement agent, Yury Yuryevich Orekhov, and his companies Nord-Deutsche Industrieanlagenbau GmbHand Opus Energy Trading LLC were designated based on evidence they were procuring U.S.-origin technologies for Russian end-users, including advanced semiconductors and microprocessors used in fighter aircraft, ballistic and hypersonic missile systems, smart munitions, radar, satellites, and other military applications. This latest sanction is expected to intensify Russia’s major supply shortage of semiconductors and microprocessors created by earlier sanctions and export controls on the Russian-Military Industrial Complex, which the S. State Department reports has already caused Russia to halt or dramatically slow production of its surface-to-air missiles, advanced military aircraft, and hypersonic ballistic missiles and to begin cannibalizing its existing airline parts.

With the ongoing nature of these developments, companies should remain up-to-date on these rapidly-changing Russian sanctions and export controls and continue to frequently review their compliance policies to ensure they are not engaging in prohibited conduct.