Sanctions and Embargoes

Special Alert - Russia Sanctions

Travel Advisory - Russia (March 7, 2022)

Immediate departure advised.

The State Department advised U.S. citizens to depart from Russia immediately in a travel advisory announced on Saturday. The announcement cited the invasion in Ukraine, the "potential for harassment against U.S. citizens by Russian government security officials" and the Embassy's limited ability to assist its citizens in the country.

State Department Travel Advisory on Russia (March 5, 2022)

Sanctions Fact Sheet (Updated April 11, 2022)

Washington, D.C.—The Department of Commerce, through the Bureau of Industry and Security (BIS), has issued a final rule that expands its highly restrictive controls on the export and reexport of U.S.-origin and certain foreign-produced commodities, software, and technologies to Russia and Belarus, further choking off access to inputs and products needed to sustain their military capabilities.

As a result of the rule, BIS has imposed highly restrictive license requirements on all categories of items on the Commerce Control List (CCL) to Russia and Belarus, which expands U.S. scrutiny of transactions to almost any sensitive dual-use technology, software, or commodities that could be used to support Russia's war effort. Furthermore, by applying a policy of denial to applications involving these items, the U.S. is effectively cutting off Russia and Belarus from access to a range of items. These restrictions should continue to severely degrade Russia's ability to sustain its aggression, as supported by Belarus.

Specifically, the new rule expands the license requirements on Russia and Belarus to all items designated on the CCL. This rule applies the additional restrictions established under previous Russia and Belarus rules to the three categories of unilaterally-controlled technology remaining on the Commerce Control List (CCL). These are Categories 0-2, which include materials and equipment relevant to nuclear, chemical, and materials processing. While the vast majority of items in Categories 0-2 already required a license for Russia and Belarus (or are subject to the licensing authorities of other agencies), this rule imposes new license requirements for items including certain composite materials, medical products containing certain toxins or genetically modified organisms, hydraulic fluids, pumps, valves, and lower-level machine tools.

In connection with this expansion in scope, the rule also applies the new Foreign Direct Product (FDP) Rules for Russia/Belarus and to Russian/Belarusian Military End Users (MEUs) to all items on the CCL. With limited exceptions, BIS will review applications involving all such CCL items under a policy of denial.

The rule took effect upon being released by the Federal Register on April 8, 2022 and is available here

Sanctions Fact Sheet (Revised March 5, 2022)

Russia, all LNR and DNR regions of Ukraine and Crimea, Belarus Sanctions
As of February 21, 2022, the United States and its allies released sanctions and export controls in response to Russia's invasion of Ukraine¹. This includes blocking sanctions on most major Russian banks including Russia's central bank, and removed certain banks from the SWIFT system, asset freezes on Russian elites, and a broad set of restrictions on exports of technology to Russia.

Export of Items or Financial Dealings:

Bureau of Industry and Security Controls: BIS significantly increased the license requirements on dual-use Items² (hardware, software, technical data), including microelectronics, telecommunications Items, sensors, navigation equipment, avionics, marine equipment, and civil aircraft, exported, reexported or transferred in-country to Russia. These license requirements do not apply to deemed exports or deemed reexports. (BIS has jurisdiction over dual-use Items. Dual-use Items have military and commercial applications and are controlled by the US and Wassenaar Arrangement Countries³ for national security concerns.)

The sanctions impose export, reexport and transfer restrictions on Russia, all Luhansk People's Republic (LNR) and Donetsk People's Republic (DNR) regions of the Ukraine and Crimea⁴. The US and their allies have avoided the energy sector, with the exception of sanctions related to Nord Stream 2. Depending on the region, this means that exports of certain Items subject to the Export Administration Regulations (EAR) to designated entities or countries are prohibited. This includes low level Items that are not typically export controlled. In addition, BIS transferred 49 end-users to the entity list imposing additional restrictions on transactions that normally can occur without licenses. The EAR also restricts the use of certain license exemptions for exports, reexports and retransfers to Russia. Although we can submit licenses, BIS has announced a presumption of denial with certain exemptions for humanitarian reasons.

What does this mean for you?

You will need to be aware that both financial dealings and physical imports and exports are subject to the new sanctions. Please contact our office or the Office of General Counsel if you have any questions, or anticipate engaging in any of these activities.

- Export/import to or from any of the sanctioned entities, countries or regions.

- Travel to these regions.

- Financial dealings with prohibited parties.

Please note that these sanctions are changing frequently.

Resources:

Ukraine: On February 21, 2022 a Presidential Executive Order was issued imposing sanctions on Donetsk People's Republic (DNR) and Luhansk People's Republic (LNR) regions of Ukraine⁴.

Russia: Seventy-five entities (and subsidiaries thereof) and 19 individuals (and their families) in Russia have been designated as blocked persons (i.e., Specially Designated Nationals or SDNs), prohibiting U.S. Persons from conducting any business with them and requiring U.S. Persons to block their property and interests in property^(5,6).

In addition, BIS moved 45 Russian entities that were on the Military-End-User List to the BIS Entity List, which enhances the export license requirements applicable to these entities. BIS imposed broad controls on 49 Russian entities that are similar to those imposed against Huawei Technologies Co. and its subsidiaries (collectively "Huawei"). These rules now control the export of all Items subject to the EAR with limited exceptions.

Belarus - Office of Foreign Assets Control: OFAC also added 16 companies (and their subsidiaries) and 8 individuals (and their families) to the restricted party list in Belarus in response to Belarus's support for the Government of Russia's invasion of Ukraine^(5,6). (OFAC controls financial dealings with sanctioned countries and parties. Prohibitions apply even when there is no transfer of export controlled Items between a US Person and the sanctioned entity or country.)

Useful links:

BIS
¹BIS Russia Rule Fact Sheet
²BIS Sanctions and Embargoes Part 746
Country Chart
Imposition of Sanctions Against Belarus Under the Export Administration Regulation
Wassenaar Arrangement
³Wassenaar Arrangement List
Executive Orders
⁴Executive Order
OFAC
⁵OFAC SDN Readable List
⁶Link to OFAC Directive 3 under E.O. 14024

Sanctioned Destinations

The Bureau of Industry and Security (BIS) implements U.S. Government sanctions against Cuba, Iran, North Korea, Sudan, and Syria pursuant to the Export Administration Regulations (EAR), either unilaterally or to implement United Nations Security Council Resolutions.

The license requirements, license exceptions, and licensing policy vary depending upon the particular sanctioned destination.

Also, other U.S. Government agencies administer regulations that could also impact export or reexport transactions. For example, the Department of the Treasury's Office of Foreign Assets Control (OFAC) also implements certain sanctions against Cuba, Iran, North Korea, Sudan, and Syria. Exporters and reexporters are responsible for complying with all applicable regulatory requirements.

Department of Commerce: Embargoed Countries

Department of Commerce: Country Groups

US State Dept: DDTC Country Policies and Embargoes

OFAC Country Sanctions

Department of State: ITAR 126.1 Countries

Recent regulatory changes within the last 12 months:

Restricted Party Screenings

Restricted Party Screening Guidance and Information

Restricted Party Screening Tool (Obtain password & user ID by emailing adilia.koch@caltech.edu.)

U.S. Government Consolidated List:

https://www.export.gov/article?id=Consolidated-Screening-List

U.S. Department of Treasury Sanctions:

https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx