On Thursday April 15, 2021, the Biden Administration implemented various sanctions directed at the Russian Federation. Specifically, President Biden issued Executive Order (EO) 14024 Executive Order Blocking Property With Respect To Specified Harmful Foreign Activities Of The Government Of The Russian Federation. “The President signed this sweeping new authority to confront Russia’s continued and growing malign behavior,” said Treasury Secretary Janet L. Yellen. “Treasury is leveraging this new authority to impose costs on the Russian government for its unacceptable conduct, including by limiting Russia’s ability to finance its activities and by targeting Russia’s malicious and disruptive cyber capabilities.”
There were also additional sanctions placed on individuals and entities related to the Russian occupation of Ukraine and against those attempting to influence the 2020 U.S. presidential election at the direction of the Russian Government. In addition, a new directive was issued in support of the Executive Order that extends the restrictions on sovereign debt with the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation and the Ministry of Finance of the Russian Federation.
The White House Fact Sheet and Treasury Press Release say the new Executive Order (“Blocking Property with Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation”) sends a signal that the US will “impose costs in a strategic and economically impactful manner on Russia if it continues or escalates its destabilizing international actions”.
What do you need to know?
- Know that more entities were sanctioned and added to the Specially Designated Sanctions List (SDN).
- Know that the 50% ownership rule applies to Russian entities.
- Know your customer and their ownership structures.
- Know your industry and understand the risks associated. For example, the oil/gas, financial and tech sector pose a higher risk than other industries.
- Know that the US is not alone in sanctioning Russian entities. The EU, Canada and Australia, for example, have similar sanctions.
What do you need to do?
- Assess risk and develop additional due diligence processes, such as obtaining End Use Statements, Ownership information and additional assurances for Russian entities.
- Screen all parties and owners against the Restricted Parties List.
- Remain diligent and aware of further actions taken by the U.S. Government.
Finally, plan accordingly. Expect that the sanctions may become more complicated and expansive based on recent Russian activity in the Ukraine. If you need advice on navigating these changes or reviewing your processes to account for the sanctions, please contact Export Solutions for a free consultation.
Rebecca Yeager is a Trade Compliance Consultant for Export Solutions -- a full-service consulting firm that specializes in helping companies comply with U.S. and international import/export regulations.