On July 19, 2021, the Department of Commerce’s Bureau of Industry and Security (BIS) published a final rule adding six Russian entities to the Entity List after having been determined to be “acting contrary to the foreign policy interests of the United States.” The entities are:
- Aktsionernoe Obshchestvo AST;
- Aktsionernoe Obshchestvo Pasit;
- Aktsionernoe Obshchestvo Pozitiv Teknolodzhiz;
- Federal State Autonomous Institution Military Innovative Technopolis Era;
- Federal State Autonomous Scientific Establishment Scientific Research Institute Specialized Security Computing Devices and Automation; and
- Obshchestvo S Ogranichennoi Otvetstvennostyu NEOBIT.
These designations are related to President Biden’s April 15, 2021, Executive Order 14024 (“E.O.”) on “Blocking Property with Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation.” This E.O. established a new national emergency under which sanctions may be imposed against individuals and entities furthering specified harmful foreign activities of Russia against the United States and others, including: undermining free and fair elections; malicious cyber-enabled activities; transnational corruption; extraterritorial activities targeting dissidents or journalists; undermining security, international law and the territorial integrity of states. Shortly after the issuance of this E.O., the Department of the Treasury’s Office of Foreign Assets Control (OFAC) placed these six entities on its Specially Designated Nationals (SDN) List. See Update of April 19, 2021. In also placing them on the Entity List, BIS stated that it is seeking to “ensure the efficacy of existing sanctions on Russia that target aggressive and harmful activities by the Russian government.”
Placement on the Entity List ensures that U.S. sanctions on these entities will apply to all items subject to the Export Administration Regulations (EAR) regardless of whether a U.S. person is involved in the transaction or whether the transaction involves the U.S. financial system. BIS has imposed a license review policy of a “presumption of denial” for these six entities. In addition, no license exceptions are available for exports, reexports, or transfers (in-country) to these six Russian entities. This final rule is effective as of July 19, 2021. However, shipments that were en route aboard a carrier to a port of export, reexport, or transfer (in-country) on July 19, 2021, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR).