On the evening of February 21, 2022, President Biden signed an Executive Order (EO) —effective immediately—imposing economic sanctions on the "self-declared" independent states of Donetsk People's Republic (DNR) and Luhansk People's Republic (LNR) located within eastern Ukraine. This action responds to President Putin's recognition of these regions' "independence" and instructions to the Russian Ministry of Defense to provide "peacekeeping functions" there. The sanctions imposed are limited, but they provide the Administration with discretion to expand them as the situation in Ukraine develops.
The sanctions imposed by the EO are directed at the DNR and LNR, but include the people facilitating the secession of the regions. The sanctions prohibit new investments in the DNR and LNR regions, imports from or exports to these regions, and any involvement by U.S. persons in transactions by foreign persons that would otherwise violate these sanctions if performed by a U.S. person or within the U.S.
Furthermore, the sanctions block all property and interests in property held by people and entities that operate in the DNR and LNR regions, members of leadership at such entities, people and entities controlled by or acting on behalf of blocked persons, and people and entities providing material support to blocked persons. The blocking order extends to prohibiting anyone from providing any benefit to, or receiving any benefit from, blocked persons. Importantly, the Secretary of the Treasury, in consultation with the Secretary of State, has the authority to expand the coverage of these sanctions to other areas of Ukraine.
The announcement of the EO was accompanied by an announcement that the Office of Foreign Assets Control (OFAC) would be issuing six general licenses to ease the impact of these sanctions on Ukraine and the Ukrainian people. OFAC issued those general licenses shortly after the EO was signed. These general licenses cover:
Ukraine General License Number 17 - Authorizing the Wind Down of Transactions Involving the So-called Donetsk People's Republic or Luhansk People's Republic Regions of Ukraine
- Authorizes the divestiture or transfer of a U.S. person's share of ownership in any pre-February 21, 2022 investment located in the Covered Regions and winding down of operations, contracts, or other agreements in effect prior to February 21, 2022 through March 23, 2022 at 12:01 A.M. E.D.T.
- Does not authorize any transactions involving any person blocked by the EO unless separately authorized
- Ukraine General License Number 18 - Authorizing the Exportation or Reexportation of Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components, or Software Updates to Certain Regions of Ukraine and Transactions Related to the Coronavirus Disease 2019 (COVID-19) Pandemic Authorizes transactions ordinarily incident and necessary to:
- The exportation or reexportation of agricultural commodities, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices
- The prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies) relating to COVID-19 in the Covered Regions
Ukraine General License Number 19 - Authorizing Transactions Related to Telecommunications and Mail
- Authorizes transactions ordinarily incident and necessary to:
- The receipt or transmission of telecommunications
- The receipt or transmission of mail and packages
- Does not authorize:
- The provision, sale, or lease of telecommunications equipment, telecommunications technology, or capacity on telecommunications transmission facilities
- Any transactions involving any person blocked by the EO unless separately authorized
Ukraine General License Number 20 - Official Business of Certain International Organizations and Entities
- Authorizes transactions that are for the conduct of the official business of:
- The United Nations
- The International Centre for Settlement of Investment Disputes (ICSID) and the Multilateral Investment Guarantee Agency (MIGA)
- The African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank Group (IDB Group)
- The International Committee of the Red Cross and the International Federation of Red Cross and Red Crescent Societies
- The Organization for Security and Co-operation in Europe
Ukraine General License Number 21 - Authorizing Noncommercial, Personal Remittances and the Operation of Accounts
- Authorizes transactions ordinarily incident and necessary to:
- Noncommercial, personal remittances (not including charitable donations or funds transfers for use in supporting or operating a business, including a family-owned business)
- Maintaining, operating, or closing an account if: (1) of a personal nature and (2) they do not involve transfers directly or indirectly to the Covered Regions or for the benefit of persons ordinarily resident in the Covered Regions unless the transfer is a noncommercial, personal remittance
Ukraine General License Number 22 - Authorizing the Exportation of Certain Services and Software Incident to Internet-Based Communications
- Authorizes transactions ordinarily incident and necessary to:
- The exportation or reexportation of services incident to the exchange of personal communications over the internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, and blogging
- The exportation or reexportation of software necessary to enable these services, subject to certain restrictions
- Does not authorize the exportation or reexportation, directly or indirectly, of services or software with knowledge or reason to know that such services or software are intended for any person whose property and interests in property are blocked pursuant by the EO
*The authors would like to thank Connor Webb, a law clerk in Venable's Washington, DC office, for his assistance in writing this article.