US widens sanctions concerning Russia
September 2014
The latest measures expand upon actions taken by OFAC on 16 July 2014, which imposed sanctions against entities in Russia's financial, energy, and defence sectors, implemented certain directives pursuant to Executive Order 13662 of 20 March 2014, and provided for the creation of a “Sectoral Sanctions Identification List” (“SSI List”). At that time, 2 Directives were issued pursuant to Executive Order 13662:
- Directive 1 prohibiting U.S. persons from transacting in, financing, or dealing in new debt with greater than 90 days maturity, and new equity in relation to 2 Russian banks - Gazprombank OAO and VEB.
- Directive 2 prohibiting U.S. persons from transacting in, financing, or dealing in new debt with greater than 90 days maturity, (but not prohibiting transactions or financing for new equity), in relation to specificed energy firms - Rosneft, the world’s largest oil and gas company, and OAO Novatek, Russia’s largest independent natural gas producer.
On 12 September 2014 OFAC amended Directive 1 to decrease the maturity length of prohibited new debt from 90 days to 30 days, and also added Sberbank to the list of Russian banks subject to the Directive. OFAC also issued two new directives under Executive Order 13662.
Directive 3 prohibits US persons from engaging in transactions involving debt of longer than 30 days' maturity of entities added to the SSI List as subject to Directive 3. Rostec, a company operating within Russia’s defence and related material sector, has been added to the SSI List as subject to Directive 3.
Directive 4 prohibits US persons from providing, exporting, or re-exporting goods, services (except for financial services), or technology in support of exploration or production for deep-water, Arctic offshore, or shale projects that:
- have the potential to produce oil in or offshore of Russia; and
- involve any of 5 major Russian energy companies: Gazprom, Gazprom Neft, Lukoil, Rosneft, or Surgutneftegas.
A copy of an OFAC Announcement published on 12 September 2014 which sets out in details these new mesures can be downloaded from the links set out below.
Separately, OFAC also added 5 Russian defence-technology companies, to the SDN List of persons designated for asset freeze.
