On December 12, 2023, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Department of State announced sanctions designating numerous additional Russian individuals and entities who have been determined to be assisting in the war against Ukraine and for efforts to evade U.S. sanctions and export controls on Russia. OFAC also identified and designated third-country individuals, entities, and networks that facilitate, arrange, and enable the transfer of key technology, equipment, and inputs to Russian military-industrial base end-users.
These Specially Designated Nationals (SDN) List designations include entities involved in Russia’s metals and mining sector, financial sector, future energy production and export capacity sector, and other sectors. The sanctions also designate entities supporting the Russian Federation’s defense industry, including various weapons and ammunition manufacturing facilities.
The sanctioned parties include third-country networks facilitating sanctions evasion and circumvention, including entities based in China, Hong Kong, Turkiye, Pakistan, Switzerland, Singapore, and the UAE that continue to send items critical to Russia’s defense-industrial base, common “high priority” items (see Thompson Hine update of September 26, 2023), electronics, circuits, aviation spare parts, and other important goods to Russia, including critical components that Russia relies on for its weapons systems. In addition, several shipping companies that have been involved in the transfer of munitions between the Democratic People’s Republic of Korea and Russia were designated.
Additional detail and identifying information on these individuals and entities is available here. A Treasury Department press release providing additional background on these entities and persons is available here. A similarly helpful State Department press release is available here.
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.
New Russia General Licenses
With these latest additions to the SDN List, OFAC has issued related General Licenses to allow certain limited activities. Certain transactions remain unauthorized under these general licenses and therefore require close analysis.
- Russia General License (GL) 79 – Authorizes transactions ordinarily incident and necessary to the wind down of transactions involving certain entities designated on December 12, 2023 until March 11, 2024.
- Russia GL 80 – Authorizing certain transactions related to the divestment or transfer of debt or equity of, or derivative contracts involving a certain Russian mining company purchased prior to December 12, 2023, and allowing such activities until March 11, 2024.