The Commerce and Treasury Departments announced a raft of new export controls and sanctions measures against Russia in press releases issued Feb. 24 following White House remarks by President Joe Biden. The measures include export control license requirements for a broad swath of the Commerce Control List, and the expansion of sanctions, including to entities in Belarus. The Bureau of Industry and Security also released a final rule on the export control changes, which take effect Feb. 24.
U.K. Prime Minister Boris Johnson announced the sanctions on five Russian banks and three oligarchs in a Feb. 22 statement to Parliament as a response to Russia's recognition of what he termed the "supposed independence" of two regions of Ukraine. Russia entered forces into these two regions -- Donetsk and Luhansk -- describing the forces as "peacekeepers." Johnson said the U.K. sanctioned IS Bank, Bank Rossiya, Promsvyazbank, Genbank and Black Sea Bank for Development and Reconstruction. Additionally, oligarchs Gennadiy Timchenko, Boris Rotenberg and Igor Rotenberg will be subject to the U.K.'s restrictive measures. "This is the first tranche, the first barrage, of what we are prepared to do: we will hold further sanctions at readiness, to be deployed alongside the United States and the European Union if the situation escalates still further," Johnson said.
The U.K. added one entry to its Somalia sanctions regime, the Office of Financial Sanctions Implementation said Feb. 21. Ali Mohamed Rage was added to the list for his position as a spokesperson for the terrorist group Al-Shabaab. He will be subject to an asset freeze and travel ban.
The U.K.'s Office of Financial Sanctions Implementation fined London-based financial institution Clear Junction more than $49,000 for violating the country's sanctions on those violating the territorial sovereignty of Ukraine. From March to June 2018, Clear Junction conducted 15 transactions with accounts held at the EU-designated Russian National Commercial Bank. Clear Junction then made funds available to an individual designated under the Ukraine sanctions regime, OFSI said. Clear Junction made a voluntary disclosure, dropping the penalty by 26.7%. The financial services firm detailed eight of the transactions, but further investigation revealed nondisclosed payments from Clear Junction. TransferGo initiated the transactions, giving a Russian Bank Identification Code to Clear Junction to enable the transactions, OFSI said. TransferGo was fined in August for its role in the scheme.
The European Union added 40 individuals and entities to its sanctions regimes on ISIL and al-Qaida, Syria, Myanmar and entities involved in the Russian State Duma elections in Crimea. Under the ISIL sanctions list, the European Council added two individuals and two groups. The restrictive measures now apply to al-Qaida in the Indian subcontinent and its leader Osama Mahmood, along with Aziz Azam, spokesperson of ISIL-K -- the Islamic State's Khorasan Province -- and Da'esh Hind Province, an ISIL-affiliated group in India. The council said the sanctioned parties are planning attacks in Afghanistan and pose a serious threat to "regional and international stability."
Sanctions, rather than additional tariffs, are the most likely result of political pressure to not look soft on China, Bank of America analysts Ethan Harris and Aditya Bhave predicted. The two wrote in a Feb. 18 note that it's not surprising that China did not purchase the volume of U.S. exports it promised, but "what's unusual is the lack of follow-through from either side so far, other than empty rhetoric."
The Bureau of Industry and Security’s reorganization and clarification of its foreign direct product rules this month (see 2202020021) could allow the administration to more easily use the rule to target specific Russian sectors if Russia invades Ukraine (see 2202150043), Akin Gump said in a February alert. The law firm outlined how companies can examine recent BIS changes to the FDP rule as a “guide for analyses of the scope and impact of possible” new Russia controls, and how certain changes to the Export Administration Regulations would affect various exports to Russia. Companies should examine whether their foreign-produced items contain certain levels of U.S. origin content, Akin Gump said, and whether they would have to comply with new licensing restrictions if Russia were moved to a different EAR Country Group.
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President Joe Biden announced in a speech Feb. 22 that the U.S. will impose a series of sanctions on Russia for its continued aggression against Ukraine. Biden promised sanctions "far beyond what was implemented in 2014," in response to Russian recognition of the Luhansk and Donetsk republics on Feb. 21, which he called a "flagrant violation of international law." According to a Feb. 21 press call, the White House anticipated the possibility and was prepared to respond immediately. A senior administration official noted the measures were in response to "Russia’s recognition gambit" and that they are distinct from "swift and severe economic measures" prepared should Russia "further invade Ukraine."
The U.K.'s Office of Financial Sanctions Implementation is amending six entries under its Syria sanctions regime, it said in a Feb. 17 notice. The entries for Bayan Bitar and Syrian Petroleum were altered with both still subject to an asset freeze. OFSI removed duplicate aliases from the listings of Samir Hassan, Mohammad Ali Jafari and Mohamed Ourjman. The U.K. also amended the entry for Adel Anwar Al-Olabi on the previous version of the consolidated list, still subjecting the individual to an asset freeze.