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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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<p>On January 10, 2025, the Department of the Treasury&rsquo;s Office of Foreign Assets Control (OFAC) targeted significant entities involved in Russia&rsquo;s oil production, maritime insurers, maritime oil tankers, and other entities and persons engaged in Russia&rsquo;s energy sector.&nbsp;According to an <a href="https://home.treasury.gov/news/press-releases/jy2777" target="_blank" rel="noreferrer noopener">OFAC press release</a>, the sanctions block two major Russian oil producers, over 180 oil-carrying vessels (many of which are part of the &ldquo;shadow fleet,&rdquo; opaque traders of Russian oil), Russia-based oilfield service providers, and Russian energy officials.&nbsp;The Department of State also took <a href="https://www.state.gov/office-of-the-spokesperson/releases/2025/01/sweeping-sanctions-on-russias-energy-sector" target="_blank" rel="noreferrer noopener">parallel steps</a> to reduce Russia&rsquo;s energy revenues by sanctioning and blocking two active liquefied natural gas projects, a large Russian oil project, and third-country entities supporting Russia&rsquo;s energy exports.</p>
<h2 class="wp-block-heading">Treasury Determination Prohibiting the Provision of U.S. Petroleum Services to Russia</h2>
<p>Treasury Secretary Janet Yellen issued two determinations impacting Russia&rsquo;s energy sector.&nbsp;Pursuant to Executive Order (EO) 14024, the secretary issued a <a href="https://ofac.treasury.gov/media/933796/download?inline" target="_blank" rel="noreferrer noopener">Determination</a> that sanctions were warranted and shall apply to Russia&rsquo;s energy sector effective on January 10, 2025. Secretary Yellen also issued a second <a href="https://ofac.treasury.gov/media/933901/download?inline" target="_blank" rel="noreferrer noopener">Determination</a> that places the following prohibitions on Russian petroleum services: &ldquo;The exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of petroleum services to any person located in the Russian Federation.&rdquo;&nbsp;This second determination does allow for limited services, including certain services related to the maritime transport of crude oil and petroleum products of Russian origin, provided that such products are purchased at or below the relevant determined Russia price caps.&nbsp;<em>See</em> past Thompson Hine Updates regarding this topic &ndash; <a href="https://www.thompsonhinesmartrade.com/2022/12/treasury-announces-price-cap-to-be-placed-on-russian-oil/">December 5, 2022</a>,&nbsp;<a href="https://www.thompsonhinesmartrade.com/2024/01/ofac-updates-its-guidance-on-the-price-caps-on-russian-oil-and-russian-petroleum-products/">January 2, 2024</a>&nbsp;and <a href="https://www.thompsonhinesmartrade.com/2024/02/ofac-issues-oil-price-cap-compliance-and-enforcement-alert-recommending-methods-to-mitigate-evasion-risks/">February 7, 2024</a> &ndash; for additional background.&nbsp;The prohibitions covered by the second determination will be effective on February 27, 2025.</p>
<p>OFAC issued a new determination pursuant to E.O. 14071 prohibiting the provision of U.S. petroleum services to persons located in the Russian Federation, cutting off Russia&rsquo;s access to U.S. services related to the extraction and production of crude oil and other petroleum products. The prohibition takes effect beginning at 12:01 a.m. eastern standard time on February 27, 2025.</p>
<h2 class="wp-block-heading">Sanctions on Significant Russia Oil and Petroleum Industry Sector Entities and Persons</h2>
<p>OFAC sanctioned and placed on the Specially Designated Nationals (SDN) List over 200 individuals, entities and vessels, including significant oil producers and exporters, related subsidiaries, Russia&rsquo;s state-owned shipping company, more than 180 vessels, major insurance providers, and traders in Russian oil, oilfield service providers, and oil company executives.</p>
<p>For specific and detailed identifying information on each of the above entities and persons, see <a href="https://ofac.treasury.gov/recent-actions/20250110" target="_blank" rel="noreferrer noopener">OFAC&rsquo;s Additions to the SDN List</a>.</p>
<p>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.</p>
<h2 class="wp-block-heading">OFAC Russia General Licenses and FAQs</h2>
<p>With these significant new sanctions on Russia, OFAC has also issued&nbsp;new Russia-related General Licenses (GL) Numbers 117 to 121 and revised several others.&nbsp;See OFAC&rsquo;s Russian Harmful Foreign Activities Sanctions <a href="https://ofac.treasury.gov/sanctions-programs-and-country-information/russian-harmful-foreign-activities-sanctions" target="_blank" rel="noreferrer noopener">web page</a>.</p>
<p>Furthermore, OFAC has issued five new Russia-related Frequently Asked Questions (<a href="https://ofac.treasury.gov/faqs/added/2025-01-10" target="_blank" rel="noreferrer noopener">FAQs 1213 &ndash; 1217</a>), and amended 14 Russia-related Frequently Asked Questions (<a href="https://ofac.treasury.gov/faqs/updated/2025-01-10" target="_blank" rel="noreferrer noopener">FAQs 967, 976, 977, 978, 999, 1011, 1012, 1017, 1117, 1126, 1182, 1183, 1201, and 1203</a>).</p>
<h2 class="wp-block-heading">State Department Sanctions and Designations</h2>
<p>In a concurrent action, the State Department sanctioned and designated for the SDN List nearly 80 individuals and entities that are significant operators of Russian crude oil production and liquified natural gas projects. For additional information on these sanctions, please see the State Department <a href="https://www.state.gov/office-of-the-spokesperson/releases/2025/01/sanctions-to-degrade-russias-energy-sector" target="_blank" rel="noreferrer noopener">Fact Sheet</a>.</p>

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SmarTrade

Senior Legislative and Regulatory Policy Advisor

Scott E. Diamond

Partner

Francesca M.S. Guerrero

Samir D. Varma

Associate

Aaron C. Mandelbaum

International Trade

Treasury and State Departments Further Increase Sanctions on Russia by Targeting Its Oil and Gas Production Sectors