OFAC and BIS Further Sanction Belarusian and Russian Entities and Individuals

On December 5, 2023, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Department of Commerce’s Bureau of Industry and Security (BIS) imposed sanctions on numerous entities and individuals in order to place additional pressure on both Belarus and Russia. The OFAC sanctions focus on Belarus’ “authoritarian regime” and for its continued support of Russia’s war against Ukraine. The BIS additions to the Entity List focus on parties that have engaged in efforts to procure and transship U.S.-origin items to Russia or contribute to Russia’s military/defense industrial base. These new designations either completely block or severely restrict engaging in transactions with the identified parties.

OFAC Sanctions

OFAC has designated 11 entities and eight individuals in Belarus to “increase the pressure on Alyaksandr Lukashenka’s authoritarian regime for its brutal suppression of Belarus’s democratic civil society, corrupt financial enrichment of the Lukashenka family, and complicity in Russia’s unjustified war against Ukraine.” The designations target numerous members of Belarus President Lukashenka’s inner circle and their companies that act as revenue generators for the regime and who have assisted in the facilitation of Russia’s war against Ukraine. Entities placed on OFAC’s Specially Designated Nationals (SDN) List include, companies that offer defense technology to the Lukashenka regime as well as state-owned enterprises that have acted for or on behalf of, directly or indirectly, the Government of Belarus. OFAC also sanctioned two of Belarus’ richest oligarchs and their tobacco company for engaging in a cigarette smuggling scheme into Russia. 

Additional detail and identifying information on these individuals and entities is available here. A helpful Treasury Department press release is available here. OFAC has issued Belarus General License (GL) 10 authorizing transactions that are ordinarily incident and necessary to the wind down of any transaction involving Tabak Invest LLC, or any entity in which Tabak Invest owns, directly or indirectly, a 50% or greater interest, are authorized through 12:01 a.m. eastern standard time, February 2, 2024. Certain transactions remain unauthorized under this general license and therefore requires close analysis.

As a result of these actions, all property and interests in property of the persons and entities placed on OFAC’s SDN List 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.

BIS Export Controls

BIS has issued a Final Rule placing 42 entities on the Entity List after determining that they were “acting contrary to the national security or foreign policy interests of the United States.”  These entities are listed under the countries of Armenia (3), Belarus (1), Belgium (3), China, People’s Republic of (China) (1), Cyprus (4), Germany (1), Kazakhstan (1), Netherlands (1), Russia (28), and the United Arab Emirates (1). Two entities are added to the Entity List under two country destinations. 

The majority of these companies are being placed on the Entity List for posing a risk of diversion of items subject to the Export Administration Regulations (EAR) to Russia and for ongoing efforts to circumvent U.S. export controls on sensitive military electronics and avionics equipment. Other designated entities have performed contracts for Russian government entities, including Russia’s defense sector; these entities have also now been designated as Russian or Belarusian “military end users.” The remaining entities are designated based on information that they contribute to Russia’s military and/or defense industrial base in connection with the development of military-grade drones in Russia. For all of these entities, BIS has imposed a license requirement for all items subject to the EAR and will review license applications under a presumption of denial.

The effective date for this rule is December 7, 2023. Shipments of items removed from eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR) as a result of these Entity List designations that were en route aboard a carrier to a port of export, reexport, or transfer (in-country), on December 7, 2023, pursuant to actual orders, may proceed to that destination under the previous eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR) before January 6, 2024. Any such items not actually exported, reexported or transferred (in-country) before midnight, on January 6, 2024, require a license from BIS.