On May 1, 2024, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Department of State announced further sanctions targeting Russia’s military-industrial base and chemical and biological weapons programs as well as companies and individuals in third countries that continue to help Russia acquire key inputs for weapons or defense-related production. Almost 300 targets have been added to the Specially Designated Nationals (SDN) List. These sanctions include entities located in Azerbaijan, Belgium, China, Russia, Slovakia, Türkiye, and the United Arab Emirates (UAE), and cover the following sectors:

  • Russian Unmanned Aerial Vehicle Procurement Network
  • Russian Defense Procurement Network
  • China and Hong Kong-based Technology Suppliers
  • Chinese Companies Providing Support to Russian Defense Entities
  • Belgium- and Türkiye-based Machine Tool Procurement Networks
  • Hong Kong-, Slovakia-, and UAE-based Electronics Procurement Networks
  • Transportation Sector Supply Chain
  • Türkiye-based Electronics Suppliers
  • Chemical and Biological Weapons Procurement Networks.

The sanctions also target numerous Russian companies engaged in the support of Russia’s military-industrial base and include not only military hardware and technology developers and producers, but also manufacturers of chemicals, industrial machinery, semiconductor devices, and electronic components. OFAC has also sanctioned multiple producers, suppliers and importers of nitrocellulose and other cotton cellulose/pulp manufactures who have supplied Russia’s military factories with this key ingredient for explosives and propellants. Finally, several Russia-based so-called “Sanctioned Goods” procurement agents (e.g., companies that “openly boast of their services to help Russia-based end-users acquire so-called sanctioned goods”) have also been sanctioned. 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.

In addition to OFAC’s sanctions, the State Department concurrently added more than 80 entities and individuals to the SDN List, including those engaged in: development of Russia’s future energy, metals, and mining production and export capacity; sanctions evasion and circumvention; and furthering Russia’s ability to wage its war against Ukraine. The State Department’s sanctions also include Chinese entities responsible for developing, and supplying dual-use aerospace, manufacturing, and technology equipment to entities based in Russia, as well as other third-country entities supporting Russia’s war against Ukraine. Additional detail and identifying information on the individuals and entities sanctioned by the Department of State is available here.

As a result of these OFAC and State Department 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.

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-related General License 95 – Authorizes certain activities to ensure civil aviation safety while winding down transactions by July 30,2024, involving Limited Liability Company Aviakompaniya Pobeda.
  • Russia-related General License 96 – Authorizes limited safety and environmental transactions for safe docking and anchorage, the health or safety of crew, and emergency repairs for certain blocked vessels until July 30, 2024.
  • Russia-related General License 97 – Authorizes the wind down of transactions by June 17, 2024, involving certain entities blocked on May 1, 2024

The State Department press release emphasized that the “ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior” and included links to the location at which petitions for removal from the SDN List may be sent: OFAC.Reconsideration@treasury.gov and Department of State’s Delisting Guidance page.