US imposes new sanctions on Russia
On 15 April 2021, President Biden issued an Executive Order targeting a broad array of individuals and entities deemed by the US to be involved in malign activities directed by the Russian government.
The new Executive Order, called Blocking Property with Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation, provides legal authority to impose blocking sanctions on individuals and entities—both Russian and non-Russian—to deal with this threat.
Technology sector targeted first
Pursuant to the Section 1(a)(i) of the order, persons that "operate or have operated in the technology sector or the defense and related materiel sector of the Russian Federation economy" may be subject to sanctions. These sectors are not defined in the order itself, nor in other guidance from the Departments of Treasury or State, meaning that the scope of the sanctions is currently unclear.
However, on the same day as the release of the order, six Russian technology companies supporting the Russian Intelligence Services were added to the specially designated nationals list see press release from the Treasury Department.
Few restriction on who can be targeted later
The Executive Order gives the US Departments of Treasury and State wide-ranging authority to impose sanctions on specific actors in the future:
- Section 1(a)(ii) of the Order allows sanctions to be imposed on persons determined to be involved in certain malign activities for, or on behalf of, or for the benefit of the Russian Government. These malign activities include "malicious cyber-enabled activities", "transnational corruption", "activities that undermine the peace, security, political stability, or territorial integrity of the United States, its allies, or its partners", or "deceptive or structured transactions or dealings to circumvent any United States sanctions, including through the use of digital currencies or assets or the use of physical assets";
- Section 1(c) of the order targets Russian persons determined to be involved in "cutting or disrupting gas or energy supplies to Europe, the Caucasus, or Asia"; and
- Section 1(a)(i) gives Treasury and State legal authority to determine "any other sector of the Russian Federation economy" to be targeted for sanctions in the future.
Sanctions aimed at Russia's Central Bank, National Wealth Fund and Ministry of Finance
In tandem with the issuance of the order, a directive under the order was released, taking aim at Russia's Central Bank, National Wealth Fund and Ministry of Finance. Pursuant to the directive, US financial institutions (as further defined in the directive) are prohibited from:
- taking part in the primary market for ruble or non-ruble denominated bonds issued after 14 June 2021 by Russia's Central Bank, National Wealth Fund and Ministry of Finance; and
- lending ruble or non-ruble denominated funds to Russia's Central Bank, National Wealth Fund and Ministry of Finance.
The directive expands upon existing restrictions on dealings in Russian sovereign debt that have been in place since August of 2019.
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.