Russia sanctions: further US and UK designations, expansion of US authorities, UK announces ban on Russian-origin diamonds, copper, aluminium and nickel
On 19 May 2023, coinciding with the first day of the G7 Summit in Hiroshima, both the US and the UK announced several new sanctions designations. In addition, the US has expanded sanctions authorities targeting certain sectors of the Russian economy and banned export of architecture and engineering services to Russia, and the UK has announced coming bans on Russian diamonds, copper, aluminium and nickel.
Meanwhile, the EU's 11th package of sanctions is currently being negotiated, and is expected to be announced soon.
On 19 May 2023, the US Office of Foreign Assets Control (OFAC) announced that it is targeting additional sectors of the Russian economy, by way of a new determination identifying the Russian architecture, engineering, construction, manufacturing, and transportation sectors pursuant to section 1(a)(i) of Executive Order 14024. The determination means that persons and entities identified to operate within these sectors may be subjected to blocking sanctions. Sectors already targeted by this authority include the metals and mining, quantum computing, accounting, trust and corporate formation, management consulting, aerospace, marine, electronics, financial services, technology, and defence and related materiel sectors of the Russian Federation economy.
OFAC also issued a determination pursuant to Executive Order 14071, prohibiting the exportation, reexportation, sale, or supply, directly or indirectly, from the US, or by a US person, wherever located, of architecture services or engineering services to any person located in Russia (effective 18 June 2023), matching measures already in place in the EU and UK.
For more information, including on how OFAC defines the newly added sectors, see new OFAC FAQs at this link.
Additionally, OFAC announced a new reporting obligation pursuant to Directive 4 under Executive Order 14024, requiring US persons to report to OFAC any property in their possession or control in which the Central Bank of Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation has an interest.
Further, the Department of Commerce's Bureau of Industry and Security (BIS) announced that it was expanding export controls to additional items and adding 71 entities to its Entity List (see a BIS press release at this link). BIS and the Treasury Department's Financial Crimes Enforcement Network (FinCEN) also issued a joint supplemental alert (building on this joint alert from June 2022), urging continued vigilance for potential Russian export control evasion. The alert provides financial institutions with further information on BIS and FinCEN's efforts to constrain and prevent Russia from accessing needed technology and goods to supply and replenish its military and defence industrial base, and includes, amongst other things, evasion typologies and additional transactional and behavioural red flags.
Lastly, OFAC have designated an additional 22 individuals and 104 entities, targeting sanctions evaders and enablers of evasion, the channels Russia uses to acquire critical technology, its future energy extraction capabilities, and the Russian financial services sector. In addition, the US State Department announced designations of almost 200 individuals, entities, vessels and aircraft, targeting, amongst others, Russia's future energy production and export capacity, military related procurement and sanctions evasion, Russian-Iranian maritime logistics networks, and the Russian metals and mining sectors.
In a statement in connection with the first day of the G7 Summit, Prime Minister Rishi Sunak announced that the UK will legislate later this year to ban imports of Russian diamonds. Such measures would follow a 35% tariff hike on Russian diamonds, and the March 2023 designation of state-owned diamond mining company Alrosa. According to Sunak, the UK will also ban all imports of Russian-origin copper, aluminium and nickel, building on existing bans of Russian iron and steel.
Further, the Office of Financial Sanctions Implementation (OFSI) announced the designations of 86 individuals and entities, targeting Russian theft of Ukrainian grain, advanced military technology, and remaining revenue sources. Among the new designations are also several financial institutions, including PJSC JSCB Metallinvestbank, Rosbank PJSC, the Russian Regional Development Bank, Tinkoff Bank and JSC Dom RF.
WR Sanctions Alerts provide you with updates on material developments in the country-specific sanctions programs implemented by the US, the UN, the UK, the EU and Norway. We will not provide updates on mere prolongations, without material changes, of existing sanctions programs, nor on any listings or de-listings of individuals/entities placed on implemented sanctions lists . Please note that the WR Sanctions Alerts are provided as general information and do not constitute legal advice.