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US Sanctions Russia’s Energy Sector: What You Need to Know
In a bid to further disrupt Russia’s economy and financial infrastructure, the US Treasury Department has announced new sanctions measures aimed at crippling Russia’s energy sector.
New Authorizations and Clarifications
The latest developments include the authorization of general licenses (GLs) that permit certain transactions related to telecommunications and internet-based communications with Russia. The GLs also allow for the limited exportation, reexportation, sale, or supply of software, hardware, or technology incident to the exchange of communications over the internet.
Additionally, OFAC has issued eight new FAQs and 10 amended FAQs addressing questions arising from the new designations and general licenses. These clarifications cover topics such as:
- “Foreign financial institution”
- “Russia’s military-industrial base”
- “Significant transactions”
New Sanctions Risks
The expanded definition of Russia’s military-industrial base now includes all persons blocked pursuant to Executive Order 14024, which means that foreign financial institutions risk being sanctioned for conducting or facilitating significant transactions involving any person on the list. This includes designated Russian banks such as VTB Bank Public Joint Stock Company and Public Joint Stock Company Sberbank of Russia.
Key Takeaways
- The new sanctions measures represent an effort to further disrupt Russia’s economy and financial infrastructure.
- Companies engaging in Russia-related transactions should revisit these dealings to confirm whether they remain permissible.
- Non-US persons conducting business with Russia also face risks, as the designations on non-Russian entities indicate the risks of doing business with Russia.
- Companies should continue to screen all non-US counterparties and international customers against all applicable US and non-US sanctions lists.
What’s Next?
The sanctions landscape is likely to remain complex in the coming months. As companies navigate this challenging environment, it is essential to stay informed about developments and adapt compliance strategies accordingly.