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US-Ukraine related sanctions regulations

The on-going crisis in Ukraine has resulted in a rapid expansion of sanctions measures implemented by the US, having implications for US and non-US companies in respect of existing and prospective business involving Ukraine and/or Russia.

To date, the US has issued three Executive Orders: EO 13660 dated 10 March 2014, EO 13661 dated 17 March 2014, and EO 13662 dated 20 March 2014. In essence, these EOs authorise the imposition of asset freezes and visa bans against a broad range of individuals and entities including:

  • officials of the Russian government;
  • those operating in sectors of the Russian economy designated by the U.S. government, such as financial services, energy, metal and mining, engineering, and defence/arms or related materials;
  • those involved in the destabilization of Ukraine, misappropriation of state assets of Ukraine, or asserting authority over regions of Ukraine without authority of the Ukrainian government;
  • those contributing to corruption in the Russian Federation.

To date, the US has identified 45 individuals and 19 companies as sanctions targets (“Specially Designated Nationals” (“SDNs”)), including a number of banks and companies engaged in gas and oil transportation, and construction companies involved in oil, gas and petrochemical projects.

On 8 May 2014, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) published a set of regulations (“Ukraine-Related Sanctions Regulations”) to implement the 3 executive orders.  These Regulations set out various definitions of terms included in the executive orders, and provide interpretive guidance.  OFAC indicates that a more comprehensive set of regulations, which may include additional interpretive and definitional guidance and additional general licences and statements of licencing policy, will be published in due course to supplement these Regulations.

Although U.S. sanctions generally only bind persons subject to US jurisdiction, non-US persons that materially assist a sanctioned entity by providing financial, material, or technological support or goods or services may also potentially be subject to sanction by the U.S.. Given the ever-increasing risk attached to trade involving Ukraine and Russia, it is important that Members continue to exercise due diligence to ensure that they do not enter into commercial relationships with designated companies, or companies that are owned or controlled by a designated entity or individual.

We are grateful to Mr Jonathan Epstein of the Washington office of law firm Holland & Knight, for permitting us to publish on the Steamship Mutual website a copy of their Alert entitled “Coping with Rapidly Expanding U.S. Sanctions on Russia”, which provides a clear summary of US sanctions measures enacted to date in respect of Ukraine and Russia, and how they impact on US and non-US persons.

Copies of the Alert, and the Ukraine-Related Sanctions Regulations can be downloaded from the links set out below.

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pdf file type