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Russia Sanctions Update: New Measures and Export Control Restrictions

Strategic Insights

— 2 min read

As of Friday, March 11, 2022, the U.S. and its allies have imposed unprecedented sanctions on Russia in response to its invasion of Ukraine. The current sanctions measures do not amount to a full embargo on Russia, but certain types of international trade with Russia remain permissible for U.S., EU, and other western companies. Western companies continue to withdraw or curtail operations in Russia in response to the new measures and public pressure.

Key Takeaways:

  • The U.S. has imposed a ban on imports of energy from Russia and prohibited new investment in the Russian energy sector.
  • The U.S. has also banned the import of certain Russian goods, the export of certain luxury items to the Russian market, and the supply of U.S. dollar banknotes to Russia and its government.
  • President Biden has provided the Treasury Department with legal authority to ban new U.S. investments in other sectors of the Russian economy.
  • The U.S. and its allies are working to revoke Most-Favored Nation status for Russia, which will increase import duties on Russian goods.
  • Russian banks subject to blocking or asset freeze sanctions in at least one Western jurisdiction include VEB, PSB, VTB Bank, Bank Otkritie, Sovcombank, Novikombank, Bank Rossiya, Black Sea Bank For Development And Reconstruction, Genbank, and IS Bank.
  • Sberbank has been subjected to correspondent and payable-through sanctions, limiting its ability to conduct U.S. dollar transactions.
  • The U.S. has imposed financing restrictions on large Russian state-owned enterprises that prohibit U.S. persons from dealing in new debt or equity.
  • The U.S. and its allies have imposed embargoes or trading bans on the separatist Donetsk People's Republic (DNR) and Luhansk People's Republic (LNR) regions of Ukraine.
  • New lists of Specially Designated Nationals (SDNs) and asset freezes have been imposed on Russian elites, their family members, and Russian companies.
  • The U.S. and its allies have imposed broad sanctions on transactions involving Russia's Central Bank, National Wealth Fund, and Ministry of Finance.
  • The EU has imposed a range of financial sanctions on Russia and Belarus, including limits on deposits, sanctions on the sale of euro-denominated securities, and a ban on the provision of specialized financial messaging services on listed Russian and Belarusian banks.
  • The U.S., European Union, and other countries have amended export control regulations to impose license requirements on exports of goods, software, and related technical knowhow to Russia and Belarus.

Statistics:

  • As of March 11, 2022, at least 15 Russian banks have been subject to blocking or asset freeze sanctions in at least one Western jurisdiction.
  • The U.S. has imposed correspondent and payable-through sanctions on Sberbank, limiting its ability to conduct U.S. dollar transactions.
  • The U.S. has prohibited the import of Russian-origin crude oil, petroleum, petroleum fuels, oils, and products of their distillation, liquefied natural gas, coal, and coal products into the United States.
  • The EU and UK have announced corresponding measures designed to reduce their reliance on Russian energy supplies.
  • The U.S. has banned the export of luxury goods to Russia and Belarus.
  • The U.S. has prohibited the provision of U.S. dollar banknotes to Russia or the Russian government without prior authorization.

Sources:

  • U.S. Office of Foreign Assets Control (OFAC)
  • European Union
  • United Kingdom
  • White House
  • Treasury Department
  • Informational articles (c) Mondaq Ltd, 2022

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