OFAC Implements Additional Sanctions Targeting Russia’s Technology, Industrial, Construction and Financial Sectors

On September 14, 2023, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced another round of sanctions and economic restrictions targeting Russian elites and Russia’s industrial base, financial institutions, and technology suppliers. According to a press release, the sanctions on over 100 individuals and entities continues the effort “to leverage sanctions and economic restrictions to undermine Russia’s capacity to wage its war against Ukraine.” These sanctions include designations by the Department of State on entities involved in expanding Russia’s energy production and export capabilities as well as Russia’s metal and mining sector. Both agencies also targeted Russia’s defense industrial base and third-party actors seeking to assist Russia in evading sanctions.

The sanctions continue OFAC’s sustained efforts to target individuals and entities that enable, or attempt to enable, Russia’s ability to procure high-tech and dual-use goods. As such, OFAC sanctioned a Finland-based network that specializes in shipping foreign electronics to Russia-based end-users, including UAV cameras, high-performance optical filters and lithium batteries. OFAC also designated two entities based in Türkiye that have engaged in shipments to Russia of components for UAVs, sensors and measuring tools.

Numerous additional electronics, technology, automotive, manufacturing and construction firms were also designated by OFAC. The State Department sanctions involve designations of entities involved in expanding Russia’s energy production and future export capacity, entities in Russia’s metal and mining sectors, various defense entities that provide repair and maintenance services to the Russian defense sector, and two vessels.

For additional identifying details on these newly designated individuals and entities, the SDN List is available here.

As a result of these actions, all property and interests in property of the persons placed on OFAC’s SDN List above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50% or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.

OFAC did issue Russia-related General License (GL) 72 that authorizes the wind down of transactions with certain newly sanctioned entities. GL 72 authorizes transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the wind down of any transaction involving eight (8) of the Russian entities placed on the SDN List. Such activities are authorized through 12:01 a.m. EST, December 13, 2023, provided that any payment to such an entity is made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations. Application of the GL should be reviewed carefully as the GL does continue to prohibit certain activities.

OFAC has also issued revised Russia-related GL 55A which continues to authorize certain services related to the maritime transport of crude oil originating from the Sakhalin-2 project.