On February 24, 2023, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued its latest Russia-related determination expanding its use of sanctions authorities to the metals and mining sector of the Russian Federation economy pursuant to section 1(a)(i) of Executive Order (E.O.) 14024. Section 1(a)(i) of E.O. 14024 allows for the blocking of any person determined by the Treasury Secretary to “operate or have operated in the technology sector or the defense and related materiel sector of the Russian Federation economy, or any other sector of the Russian Federation economy as may be determined by the Secretary of the Treasury.” 

This new determination exposes persons in Russia’s metals and mining sector to U.S. sanctions risk and allows for sanctions to be imposed on any individual or entity that may subsequently be determined and designated by OFAC to operate or have operated in this sector. The determination does not automatically impose sanctions on all persons who operate or have operated in the sector. Pursuant to this determination, OFAC did proceed to immediately designate and place on its Specially Designated Nationals (SDN) List four entities involved in Russia’s metals and mining sector. Additional information on these entities is available here

In addition, OFAC issued five new FAQs to address implementation of the determination. Importantly, and while OFAC states that it anticipates publishing regulations defining the term “metals and mining sector of the Russian Federation economy,” one FAQ (FAQ 1115) states that the term includes “any act, process, or industry of extracting, at the surface or underground, ores, coal, precious stones, or any other minerals or geological materials in the Russian Federation, or any act of procuring, processing, manufacturing, or refining such geological materials, or transporting them to, from, or within the Russian Federation.” Another FAQ (FAQ 1117) provides information on activities and provision of goods or services to the metals and mining sector that will not be targeted under this determination.

This determination and action complements existing provisions for sanctions against those that operate or have operated in the quantum computing (see Update of September 16, 2022), accounting, trust and corporate formation, management consulting (see Update of May 13, 2022), aerospace, marine, electronics (see Update of March 31, 2022), and defense and related materiel (see Update of March 7, 2022) sectors of the Russian Federation economy.

Photo of Scott E. Diamond** Scott E. Diamond**

Scott is a senior policy advisor with more than 25 years’ experience with the legislative and regulatory processes involved in international trade policy, remedies and enforcement. This includes working with clients on matters involving export controls, economic sanctions, human rights and forced labor…

Scott is a senior policy advisor with more than 25 years’ experience with the legislative and regulatory processes involved in international trade policy, remedies and enforcement. This includes working with clients on matters involving export controls, economic sanctions, human rights and forced labor compliance, corporate anti-boycott and antibribery compliance, national security investigations, and foreign direct investment in the United States.

**Not licensed to practice law.

Photo of Samir D. Varma Samir D. Varma

Samir advises multinational corporations on export controls, economic sanctions and customs, and counsels individuals and corporations on the Foreign Corrupt Practices Act (FCPA) and other anti-corruption laws. He represents clients in enforcement actions before U.S. regulatory agencies and conducts corporate internal investigations.

Photo of Francesca M.S. Guerrero Francesca M.S. Guerrero

Francesca counsels clients on compliance with export controls, sanctions, import regulations, human rights and forced labor, and the FCPA and antibribery laws. She works closely with companies to develop tailored compliance programs that fit their specific needs, and routinely advises clients on some…

Francesca counsels clients on compliance with export controls, sanctions, import regulations, human rights and forced labor, and the FCPA and antibribery laws. She works closely with companies to develop tailored compliance programs that fit their specific needs, and routinely advises clients on some of their most challenging international transactions, involving dealings in high-risk jurisdictions or with high-risk counterparties. Francesca also counsels companies through all phases of internal investigations of potential trade and antibribery violations and represents companies across industries before related government agencies.