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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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The Department of the Treasury&rsquo;s Office of Foreign Asset Controls (OFAC) has issued further sanctions (see also <a href="https://www.thompsonhinesmartrade.com/2025/01/treasury-and-state-departments-further-increases-sanctions-on-russia-by-targeting-its-oil-and-gas-production-sectors/">January 15, 2025</a> Thompson Hine Update) to address Russia&rsquo;s continued efforts to evade U.S. sanctions.&nbsp;&nbsp; OFAC noted in a <a href="https://home.treasury.gov/news/press-releases/jy2785">press release</a> that this latest action &ldquo;targets a sanctions evasion scheme established between actors in Russia and [China] payments for sensitive goods.&nbsp; Significantly, OFAC has also redesignated a number entities so that transactions involving such previously designated entities could now trigger secondary sanctions.
Additions to the SDN List
This round of designations and additions to the Specially Designated Nationals (SDN) List includes more than 150 entities and individuals, including numerous companies in Russia&rsquo;s defense industry and those supporting its military industrial base, as well as other companies across multiple countries that continue to support Russia&rsquo;s efforts to evade U.S. sanctions.&nbsp; For specific and detailed identifying information on each of the above entities and persons, see&nbsp;<a href="https://ofac.treasury.gov/recent-actions/20250115">here</a>.
As a result of these OFAC actions, all property and interests in property of the designated persons 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, individually or in the aggregate, 50% or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC&rsquo;s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons. 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.
Increasing Secondary Sanctions Risk for Transactions with Certain Russian Entities
Perhaps most importantly, the Department of the Treasury has also taken actions that could trigger secondary sanctions risks for foreign persons and financial institutions that engage in transactions with previously designated Russian entities.&nbsp; Specifically, OFAC has re-designated pursuant to <a href="https://ofac.treasury.gov/media/5961/download?inline">Executive Order (EO) 13662</a> almost 100 entities already designated under to <a href="https://ofac.treasury.gov/media/57936/download?inline">EO 14024</a>. &nbsp;As a result of these entities&rsquo; designation under EO 13662, foreign persons, including foreign financial institutions, that knowingly facilitate&nbsp;<a href="https://ofac.treasury.gov/faqs/542">significant transaction</a>s for or on behalf of any of these entities could be subject to mandatory secondary sanctions under the Ukraine-/Russia-related sanctions program.&nbsp;
For a list of entities being designated pursuant to E.O. 13662 for operating in the financial services sector of the Russian economy, please see&nbsp;OFAC <a href="https://home.treasury.gov/news/press-releases/jy2785#_Annex1">Annex 1</a>. &nbsp;
For a list of entities being designated pursuant to E.O. 13662 for operating in the energy sector of the Russian Federation economy, please see&nbsp;OFAC <a href="https://home.treasury.gov/news/press-releases/jy2785#_Annex2">Annex 2</a>.
For a list of entities being designated pursuant to E.O. 13662 for operating in the defense and related materiel sector of the Russian Federation economy, please see&nbsp;OFAC <a href="https://home.treasury.gov/news/press-releases/jy2785#_Annex3">Annex 3</a>.
As a result of the above actions OFAC has issued&nbsp;several General Licenses:
<ul class="wp-block-list">
<li><a href="https://ofac.treasury.gov/media/933916/download?inline">Russia-related General License 122</a>, Authorizing the wind down of transactions involving certain entities blocked on January 15, 2025;</li>
<li><a href="https://ofac.treasury.gov/media/933921/download?inline">Russia-related General License 123</a>, Authorizing certain transactions related to debt or equity of, or derivative contracts in one Chinese company; and&nbsp;</li>
<li><a href="https://ofac.treasury.gov/media/933911/download?inline">Russia-/Ukraine-related General License 26A</a>, Transactions for certain entities authorized pursuant to the Russian Harmful Foreign Activities Sanctions Regulations.</li>
</ul>

OFAC Takes Further Action on Russia’s Attempts to Evade U.S. Sanctions

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