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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 April 6, 2022, President Joseph Biden issued <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/06/prohibiting-new-investment-in-and-certain-services-to-the-russian-federation-in-response-to-continued-russian-federation-aggression/">Executive Order</a>, &ldquo;Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression&rdquo; (the &ldquo;April 6, 2022 EO&rdquo;) , further expanding sanctions against Russia, including measures to ban new investments in Russia and authorizations to prohibit the provision of services in Russia.&nbsp; On the same date, the Department of Treasury&rsquo;s Office of Foreign Assets Control (OFAC) announced blocking sanctions against additional Russian banks (including Sberbank and Alfa-Bank), as well as blocking of several of Russia&rsquo;s most critical state-owned enterprises (SOEs) and Russian government officials and their family members.
The April 6, 2022 EO prohibits the following activities:
<ul>
<li>new investment in the Russian Federation by a U.S. person, wherever located;</li>
<li>the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a U.S. person, wherever located, of any category of services as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, to any person located in the Russian Federation; and</li>
<li>any approval, financing, facilitation, or guarantee by a U.S. person, wherever located, of a transaction by a foreign person involving the foregoing prohibited activities where the transaction by that foreign person would be prohibited if performed by a U.S. person or within the United States.</li>
</ul>
The Secretary of the Treasury has not yet identified categories of services prohibited under this EO&rsquo;s authority.
Blocking Sanctions 
As noted, OFAC designated Russia&rsquo;s largest financial institution Sberbank (and 24 of its subsidiaries) and Russia&rsquo;s largest private bank, Alfa-Bank (and 6 of its subsidiaries) to the Specially Designated Nationals and Blocked Persons (&ldquo;SDN&rdquo;) List. &nbsp;Several other Russian banks were also placed on the SDN List. &nbsp;Notably, Sberbank and its subsidiaries were &nbsp;previously only subject to Non-SDN Menu-Based Sanctions pursuant to EO 14024 Directive 2 but are now fully blocked.
In addition, OFAC has designated family members of President Vladimir Putin and Foreign Minster Sergey Lavrov, as well as former President and Prime Minister of Russia Dmitry Medvedev and other Russian Security Council members.&nbsp; Several additional vessels have also been placed on the SDN List.&nbsp; For full identifying details on these banks, entities and persons click <a href="https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220406">here</a>.
As a result of these actions, all property and interests in property of these individuals and entities 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, 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 otherwise blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt.
General Licenses 
OFAC has issued three new Russia-related General Licenses (GL) to authorize all transactions ordinarily incident and necessary to the wind down of certain activities involving Sberbank CIB USA, Inc. (<a href="https://home.treasury.gov/system/files/126/russia_gl21.pdf">GL 21</a>, authorizing certain activities until June 7), PJSC Sberbank of Russia (<a href="https://home.treasury.gov/system/files/126/russia_gl22.pdf">GL 22</a>, authorizing certain activities until April 13), and JSC Alfa-Bank (<a href="https://home.treasury.gov/system/files/126/russia_gl23.pdf">GL 23</a>, authorizing certain activities until May 6).&nbsp; The authorization for wind down activities includes any entities in which these three entities own, directly or indirectly, a 50% or greater interest.
OFAC also issued an updated <a href="https://home.treasury.gov/system/files/126/russia_gl8b.pdf">GL 8B</a>, updating the prior GL 8A to include some newly designated entities and authorize certain energy related transactions until June 24, 2022.&nbsp; In addition, OFAC issues GLs <a href="https://home.treasury.gov/system/files/126/russia_gl9b.pdf">9B</a> and <a href="https://home.treasury.gov/system/files/126/russia_gl10b.pdf">10B</a> to add newly designated entities to authorizations permitting certain divestment related activity and wind-down of derivative contracts.
A White House Fact Sheet summarizing these additional sanctions is available <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/06/fact-sheet-united-states-g7-and-eu-impose-severe-and-immediate-costs-on-russia/">here</a>.

core/freeform

SmarTrade

Senior Legislative and Regulatory Policy Advisor

Scott E. Diamond

International Trade

President Biden Announces Ban on New Investment on Russia; Sberbank, Alfa-Bank and Other Entities Designated as SDNs