US Imposes Sectoral Sanctions Against Russia, EU Targets Individuals, May Expand Sanctions
CLIENT ALERTS US Imposes Sectoral SaNctioNs AgaiNst Russia, EU Targets INdividuals, May ExpaNd SaNctioNs July 21, 2014 Authors Edward J. KraulaNd, Meredith RathboNe, Richard J. Battaglia, Guy SoussaN, Maury SheNk, AlexaNdra Baj, Jack R. Hayes Overview ON July 16, 2014, the US Treasury DepartmeNt, Office of ForeigN Assets CoNtrols (OFAC) issued the Sectoral SaNctioNs IdeNtificatioNs List (SSI List), imposiNg saNctioNs oN several eNtities iN the RussiaN finaNcial aNd eNergy sectors. OFAC also desigNated as Specially DesigNated NatioNals (SDNs) several other iNdividuals aNd eNtities, iNcludiNg KalashNikov CoNcerN, maNufacturer of the AK-47 assault rifle. The EuropeaN UNioN also has beeN active iN imposiNg UkraiNe-related saNctioNs. First, oN July 11, 2014, the EU adopted CouNcil DecisioN 2014/455/CFSP aNd CouNcil ImplemeNtiNg RegulatioN No. 753/2014, imposiNg saNctioNs oN 11 iNdividuals iNvolved iN destabiliziNg easterN UkraiNe. SecoNd, oN July 16, 2014, the EuropeaN CouNcil adopted coNclusioNs (the CommuNique) expressiNg williNgNess to expaNd targetiNg of eNtities coNtributiNg to the crisis iN UkraiNe; block New project fuNdiNg for Russia from the EuropeaN INvestmeNt BaNk, aNd coordiNate Member State positioNs to similarly block fuNdiNg from the EuropeaN BaNk of RecoNstructioN aNd DevelopmeNt; aNd restrict iNvestmeNts iN Crimea aNd Sevastopol. New US SaNctioNs IssuaNce of Sectoral SaNctioNs IdeNtificatioN List IN NamiNg eNtities to the SSI List, OFAC has imposed the first “sectoral” saNctioNs oN Russia uNder Executive Order 13662, targetiNg certaiN eNtities iN the RussiaN finaNcial aNd eNergy sectors. OFAC has stopped short of “blockiNg” the listed eNtities as Specially DesigNated NatioNals (SDNs). Rather, OFAC has restricted US persoNs aNd persoNs withiN the UNited States from traNsactiNg iN, providiNg finaNciNg for, or otherwise dealiNg iN New “debt” of loNger thaN 90 days’ maturity issued for saNctioNed persoNs, aNy eNtity such saNctioNed persoN owNs, directly or iNdirectly, 50 perceNt or more, their property, or their iNterests iN property.
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