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New US sanctions against certain Russian entities

On 16 July 2014, the U.S. announced a further round of sanctions measures against Russia including measures targeting entities in Russia's finance, energy and defence technology sectors.

Some of the measures include designation for asset freeze, while others prohibit specific transactions.

  • From 16 July 2014 U.S. persons are prohibited from providing new financing for, or otherwise dealing in new debt of longer than 90 days maturity or new equity for two Russian financial institutions - Gazprombank OAO and VEB - and two Russian energy firms - OAO Novatek and Rosneft. Novatek is reported to be Russia's largest independent natural gas producer, and Rosneft Russia's largest petroleum company and third largest gas producer. The names and aliases of these companies are published in a “Sectoral Sanctions Identification List”. This restriction also applies to entities in which the named entities own more than 50% of the shares. The US Treasury Secretary has stated in a Press Release that other persons operating within Russia’s energy sector may also be subjected to targeted sanctions;
  • 8 Russian arms firms are designated pursuant to Executive Order 13661 for involvement in the production of a range of material including small arms, mortar shells, and tanks;
  • Luhansk People’s Republic, Donetsk People’s Republic, and Aleksandr Borodai (self-declared prime minister of the Donetsk People’s Republic) are designated pursuant to Executive Order 13660 for threatening the peace, security, stability, sovereignty, or territorial integrity of Ukraine;
  • Feodosiya Enterprises, an oil terminal in the Crimean peninsula, is designated for asset freeze pursuant to Executive Order 13660.  This facility had been controlled by the Ukrainian state-controlled gas company Naftogaz but was taken over and nationalised by the separatist Crimean parliament which the U.S. does not recognise;
  • 4 Russian government officials are designated pursuant to Executive Order 13661 - Sergey Beseda - a Russian Federal Security Service official, Oleg Savelyev - Russia’s Minister for Crimean Affairs, Sergei Neverov - Deputy Chairman of the State Duma of the Russian Federation, and Igor Shchegolev - an aide to President Vladimir Putin.

Any assets of those entities and individuals designated pursuant to Executive Orders 13660 and 13661 that are or come within U.S. jurisdiction must be frozen, and transactions by U.S. persons or within the United States involving these entities are generally prohibited.  These Executive Orders also provide that any person, including a non-U.S. person, that has provided financial, material, or technological support for, or goods or services to or in support of a person designated pursuant to these Orders, may also be subject to U.S. sanctions.  It is not clear whether payment for or use of the shipping facilities operated by Feodosiya Enterprises would amount to material assistance, but in the absence of clear official guidance Members should exercise extreme caution if considering using these facilities.

Copies of a related US Treasury Press Release and the "Sectoral Sanctions Identification List" can be downloaded from the links set out below.

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