The past several weeks at U.S. sanctions agencies have ranked among the busiest times in recent memory, especially at the Office of Foreign Assets Control, where some employees are working nearly nonstop to implement and enforce new sanctions against Russia, former officials said in interviews. While some former officials said the extra work could shift minor projects to the side, lawyers are concerned it could also delay more pressing agency priorities, including licensing requests.
The U.K. Office of Financial Sanctions Implementation published a General License permitting until May 2 the "winding down of any derivatives, repurchase, and reverse repurchase transactions" made before March 1 with the Russian Central Bank, the Russian National Wealth Fund or the Russian Finance Ministry. The license took effect March 22.
The Office of Foreign Asset Control on March 24 updated two existing Russia-related general licenses and issued two new licenses. Updated License 6A authorizes certain transactions involving exports of agricultural commodities, medicine, medical devices and COVID-19 diagnosis and treatment equipment, while updated License 17A authorizes certain imports of Russian alcoholic beverages, non-industrial diamonds or seafood. New License 20 authorizes certain transactions involving the official business of third-country diplomatic or consular missions in Russia, and new License 25 authorizes certain transactions involving "journalistic activities" in Russia. OFAC also updated two existing Frequently Asked Questions to reflect the new licenses.
The Office of Foreign Assets Control last week issued a new general license to authorize certain transactions related to “civil maritime services” with people or companies in the so-called Donetsk People’s Republic or Luhansk People’s Republic regions of Ukraine. General License No. 24 only authorizes the transactions if the services are performed outside the covered regions and aren’t performed “on behalf of any entity located in, or organized under the laws of,” the covered regions.
Following the U.K.'s imposition of massive sanctions on Russia following its invasion of Ukraine, the U.K.'s Export Control Joint Unit published a General License allowing the provision of technical assistance, financial services and funds, and brokering services for certain vessels. The ECJU authorized these activities where a restricted vessel is moving from a third country to Russia or the U.K., or to a third country from Russia or transiting Russian waters.
The U.K. amended the General License applying to transactions involving sanctioned Russian bank Sberbank. The license, "Correspondent Banking Relationships & Processing Sterling Payments," was altered to allow British credit or financial institutions to continue a banking relationship with Sberbank or a U.K. or non-U.K. credit or financial institution owned or controlled by Sberbank. The license expires March 31.
The U.S. announced a set of new export controls and sanctions against Russia last week, including new restrictions on luxury goods and full blocking sanctions on Russian government officials and bank executives. The measures, outlined in a March 11 executive order, also include new banking and financing-related restrictions meant to further cut Russia’s economy off from the global financial system and target Russian oligarchs.
The U.K. and the EU added another wave of individuals to their Russia sanctions regime following the invasion of Ukraine. The U.K.'s newest additions include Roman Abramovich, owner of Chelsea Football Club, who has announced his intentions to sell the club. Abramovich was listed as a "prominent Russian businessman" due to his stewardship of the popular club, and a stakeholder in Evraz and Norilsk Nickel and as a "pro-Kremlin oligarch." The U.K. Office of Financial Sanctions Implementation further explained that Abramovich has a close relationship with Russian President Vladimir Putin and that this relationship has enabled Abramovich to reap financial benefits from the Russian government.
The U.K.'s Export Control Joint Unit published a General License temporarily permitting the provision of certain insurance and reinsurance services for aviation and space goods and aviation and space technology to Russian clients. The license took effect March 8, and anyone seeking to use the license must register via the U.K.'s SPIRE system within 30 days of their first use of the license, the ECJU said.
The U.S.’s new Russia export controls could lead to a short-term spike in license applications, but volumes will likely taper off later this year as businesses divest from Russia, said Nazak Nikakhtar, a former senior U.S. export control official.