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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 11 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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On February 24, 2023, the first anniversary of Russia&rsquo;s invasion of Ukraine, the Departments of the Treasury and State implemented further economic sanctions against key industry sectors &ldquo;in order to further degrade Russia&rsquo;s economy and diminish its ability to wage war against Ukraine.&rdquo; These sanctions are being imposed on over 200 individuals and entities, &ldquo;including both Russian and third-country actors across Europe, Asia, and the Middle East that are supporting Russia&rsquo;s war effort.&rdquo;&nbsp;According to a White House <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2023/02/24/fact-sheet-on-one-year-anniversary-of-russias-invasion-of-ukraine-biden-administration-announces-actions-to-support-ukraine-and-hold-russia-accountable/" target="_blank" rel="noreferrer noopener">Fact Sheet</a>, this effort targets &ldquo;a dozen Russian financial institutions, in alignment with allies and partners, as well as Russian officials and proxy authorities illegitimately operating in Ukraine. We will sanction additional actors tied to Russia&rsquo;s defense and technology industry, including those responsible for backfilling Russian stocks of sanctioned items or enabling Russian sanctions evasion. It also includes the targeting of Russia&rsquo;s future energy capabilities in a manner that does not impact current production to minimize market disruption.&rdquo;
The additions to the SDN List include:
<ul class="wp-block-list">
<li>Additional Russian Ministers, officials, senior executive officers and members of the board of directors of the government of the Russian Federation, including Russian Federation governors&nbsp;who have participated in the conscription of Russian citizens to fight in Ukraine.</li>
<li>Additional entities and individuals for their roles in operating or having operated in the financial services sector of the Russian Federation economy.</li>
<li>Entities and individuals facilitating grain theft and waging war or administering occupied territory on behalf of the Russian Federation.</li>
<li>Additional entities operating or having operated in the defense and related materiel sector of the Russian Federation economy, including several nuclear weapons and nuclear power entities.</li>
<li>Entities involved in expanding Russia&rsquo;s future energy production and export capacity, as well as individuals and entities in Russia&rsquo;s advanced technology sector.</li>
<li>Additional companies and Russian vessels operating in the maritime sector of the Russian Federation economy.</li>
<li>Multiple individuals and entities associated with the manufacturing of hardware and development of software for Russia&rsquo;s System for Operational-search Measures (SORM) capabilities, for operating or for having operated in the technology sector of the Russian Federation economy. SORM enables Russia&rsquo;s domestic and foreign intelligence collection efforts by monitoring and suppression of dissent, and has been installed on infrastructure in occupied parts of Ukraine to further aid Russia&rsquo;s attempts to integrate Ukraine&rsquo;s territory into Russia.</li>
<li>Entities that produce carbon filter and related advanced materials for Russia&rsquo;s military-industrial complex.</li>
<li>Additional entities operating in the aerospace sector of the Russian Federation economy.</li>
<li>Additional entities and individuals operating in the technology and electronics sectors of the Russian Federation economy.</li>
</ul>
OFAC&rsquo;s addition of multiple Russian financial institutions is intended to impede &ldquo;the ability of President Vladimir Putin&rsquo;s regime to raise capital in support of the war against Ukraine and further isolates Russia from the global financial system.&rdquo;&nbsp;While Russian banks representing over 80% of total Russian banking sector assets were already sanctioned, OFAC has designated additional financial institutions, including one of the top 10 largest banks by asset value. OFAC has also added several smaller Russian banks as well as wealth management firms, indicating that larger financial actors have relied on such entities &ldquo;in an attempt to evade sanctions as Russia seeks new ways to access the international financial system.&rdquo;&nbsp;With the addition of these financial institutions, OFAC has issued or revised several Russia-related General Licenses:
<ul class="wp-block-list">
<li>Amended&nbsp;Russia General License (GL) <a href="https://home.treasury.gov/system/files/126/russia_gl8f.pdf" target="_blank" rel="noreferrer noopener">GL 8F</a>: Adding certain financial institutions designated on February 24, 2023 to the authorization to process certain energy-related transactions through May 16, 2023.</li>
<li>Amended Russia General License <a href="https://home.treasury.gov/system/files/126/russia_gl13d.pdf" target="_blank" rel="noreferrer noopener">GL 13D</a>: Extending the authorization for certain administrative transactions (including the payment of taxes, fees, and receipt of permits, etc.) prohibited by Directive 4 under EO 14024 (which prohibits transactions with the Central Bank of the Russian Federation, the National Wealth Fund, and the Ministry of Finance) from March 7 through June 6, 2023.</li>
<li>Russia General License &nbsp;<a href="https://home.treasury.gov/system/files/126/russia_gl60.pdf" target="_blank" rel="noreferrer noopener">GL 60</a>: Authorizes the wind down and rejection of transactions involving certain financial institutions designated on February 24, 2023 through 12:01 a.m. EDT, May 25, 2023.</li>
<li>Russia General License <a href="https://home.treasury.gov/system/files/126/russia_gl61.pdf" target="_blank" rel="noreferrer noopener">GL 61</a>:&nbsp;Authorizing the wind down of certain securities and derivatives transactions involving certain financial institutions designated on February 24, 2023 through 12:01 a.m. EDT, May 25, 2023.</li>
</ul>
Note that certain dealings are specifically not authorized under these general licenses, and therefore each requires close analysis.
The State Department is also imposing visa restrictions on 1,219 members of Russia&rsquo;s military for actions that threaten or violate the sovereignty, territorial integrity, or political independence of Ukraine, and designating additional Russian military officers for &ldquo;gross violations of human rights, namely extrajudicial killings. ... torture and/or cruel, inhuman, or degrading treatment or punishment.&rdquo;
Additional information and identifying details on these newly sanctioned entities and persons are available in a State Department <a href="https://www.state.gov/the-united-states-takes-sweeping-actions-on-the-one-year-anniversary-of-russias-war-against-ukraine/" target="_blank" rel="noreferrer noopener">Fact Sheet</a> and on OFAC&rsquo;s <a href="https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20230224" target="_blank" rel="noreferrer noopener">website</a>. 
As a result of these actions, all property and interests in property of the persons placed on OFAC&rsquo;s SDN List above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.&nbsp;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.

core/freeform

SmarTrade

Senior Legislative and Regulatory Policy Advisor

Scott E. Diamond

Partner

Francesca M.S. Guerrero

Samir D. Varma

International Trade

OFAC and State Department Add Over 200 Russia-Related Individuals and Entities to SDN List