Keeping pace with the multinational sanctions being imposed on Russia following the invasion of Ukraine has become a difficult but necessary task for lawyers and businesses, said sanctions and international trade lawyers at Crowell & Moring on a March 2 briefing hosted by the firm. The sanctions are already remarkably complex, totaling over 1,200 pages of new regulations, and more are expected. This marks the "fastest moving sanctions regime that we have seen," said Dj Wolff, a partner at the firm.
While China may help Russia evade some export controls imposed by the U.S., the EU and others, the fear of secondary sanctions and other trade restrictions will likely deter it from providing significant help to Russia, said Emily Kilcrease, an energy, economics and security expert at the Center for a New American Security. Chinese companies could find themselves on the Entity List for aiding Russia’s export-control evasion efforts, Kilcrease said, and could also face strict trade restrictions by Europe.
The U.S. announced a host of new sanctions and export controls, including two new additions to the Entity List, to further penalize Russia and Belarus for the invasion of Ukraine. The measures place new restrictions on technology and software exports to Belarus, export controls on shipments of oil and gas extraction equipment to Russia, blocking sanctions on 22 Russian defense entities and a prohibition on Russian cargo planes flying to and from the U.S.
The U.S. issued another set of “expansive” Russia sanctions, targeting various Russian oligarchs, allies of Russian President Vladimir Putin, their family members and several Russian intelligence disinformation outlets. The designations include more than 80 people and entities in Russia or Ukraine that either offer financial support to the Kremlin or help the government “promulgate disinformation and influence perceptions,” the Treasury Department said.
HP has suspended shipments to Russia “in compliance” with the Biden administration’s sanctions over the Ukraine invasion, CEO Enrique Lores said Feb. 28 on an earnings call about fiscal Q1 ended Jan. 31. “The difficult situation in Ukraine is the latest in a series of global challenges we have faced,” he said.
A host of companies announced plans to stop exporting to or doing business in Russia and Ukraine due to Russia’s military invasion, including U.S. global car manufacturers and financial and energy companies. The decisions came as the U.S. and allies increased sanctions and export controls against Russia (see 2202280043) and 2202240069).
The U.S. should begin seizing the financial and physical assets of sanctioned Russian people and entities instead of just freezing them, said Sen. Rob Portman, R-Ohio. He said other countries have started seizing Russian vessels, such as France, which recently seized a car cargo ship in the English Channel with ties to the son of a former Russian spy chief, according to a Reuters report.
The Congressional Research Service recently issued two new reports detailing the U.S.’s and its allies’ response to Russia’s invasion of Ukraine and an overview of recent sanctions and export controls. The CRS said Western economies, including companies, are “likely” to be affected by the new trade measures and “many transactions will likely be disrupted,” especially in the energy sector.
Congress should make sure the Treasury Department has enough funding to fully target Russian oligarchs and sanctioned Russian companies Sen. Ron Wyden, D-Ore., said March 1. Wyden, chair of the Senate Finance Committee, applauded Treasury’s Russia sanctions work so far but said Congress may need to provide the agency with more resources.
The Office of Foreign Assets Control added Russian sanctions regulations to implement a sweeping April 2021 executive order that authorized new designations against people and companies operating in Russia’s defense and technology sectors, involved in attempts to influence foreign elections and more (see 2104150019). The added regulations, which took effect March 1, are in an “abbreviated form” so OFAC can provide “immediate guidance to the public.” The agency intends to add more regulations, which could include guidance on various definitions and general licenses.