New U.S. Sanctions Target Russia's Industrial Base, Additional Financial Institutions, and Technology Suppliers

3 min

Since the outset of the Russian aggression in Ukraine, the Biden administration has issued incremental sanctions targeting various sectors of the Russian economy, aimed at curbing Russia's ability to wage war against Ukraine.

On September 14, the U.S. Department of Treasury's Office of Foreign Assets Control (OFAC), in coordination with the U.S. Department of State, announced the latest round of Russia sanctions, imposing nearly 100 sanctions designations on Russia's industrial base, construction sector, mining sector, technology companies, and financial institutions. Many of the designations focused on Russian military-linked elites and firms operating in the military-industrial complex, notably companies and individuals (oligarchs and families) with known or established ties to the Kremlin. In many instances, the recently designated persons are already blocked under various U.S. allies' sanctions regimes, including those of the UK, EU, Australia, and New Zealand.

The U.S. government's recent action targets the following sectors of Russia's economy:

  • Russia's "War Profiteers" – Targeting Russian elites and firms that profit from their dealings with Russia's defense sector, military-industrial complex, and Kremlin ties
  • Technology Supply Chains Outside of Russia – Limiting Russia's ability to acquire, develop, and maintain technology that sustains its war-waging capability. The designations transcend Russia's borders and include a Finland-based network that specializes in shipping foreign electronics to Russia-based end-users, and Turkish companies involved in the supply chain for producing Russian military UAVs used in Russia's war against Ukraine and sending sensors and measuring tools to Russia
  • Industrial Base and Construction Sector – Focusing on Russian manufacturing and construction firms supplying automotives, machinery, steel products, electrical equipment, and more
  • Extractives and Future Extractives Capabilities – Closing off energy revenue streams derived from oil and gas exploration, energy-related construction projects, and minerals mining
  • International Financial System Access – Restricting Russia's ability to benefit from the international financial system. The designations include two Russia-based banks, Ak Bars Bank and Sinko Bank, and firms engaged in wealth management consulting, auditing, and investment

OFAC issued two General Licenses concurrently with the new designations. Updated General License 55A extends the authorization timeline of GL 55, which allowed services related to the maritime transport of crude oil originating from a liquified natural gas project of Russian energy companies in partnership with Japanese investors. Newly issued General License 72 authorizes the wind-down of transactions with respect to several of the designated entities in Russia's metal, mining, and manufacturing sectors.

The U.S. government's recent sanctions actions underscore that the U.S. Russian sanctions regimes are only growing more complex and expansive in their reach. The Venable International Trade Group is available to assist your business in navigating these evolving restrictions.