New sanctions increase uncertainty of shipments to Russia
In a continuing rise of sanctions against Russia, the US Commerce Department’s Bureau of Industry and Security (BIS) issued a final rule, effective 6 August 2014, amending the Export Administration Regulations (EAR) and imposing further export controls against Russia’s energy sector. These trade-focused sanctions add to the several rounds of primarily financial sanctions already imposed by the US Treasury Department’s Office of Foreign Assets Control (OFAC).
The new export control sanctions: expand licence requirements, and restrictions, on commodities for use in Russia’s energy sector — particularly for exploration or production from deepwater (greater than 500ft) Arctic offshore or shale projects; add a Russian state-owned company (United Shipbuilding Corporation) to the BIS Entity List, effectively prohibiting this company from receiving any US-origin commodities, even from non-US sources; and revoke Russia’s favourable licensing policy for items controlled for National Security reasons.
On 24 March 2014, in Executive Order 13662, the president announced his intention to expand sanctions to certain sectors of the Russian economy, including the financial services, energy, metals and mining, engineering and defence and related materiel sectors. While sanctions have been imposed on individuals, companies and financial transactions carried out by specific institutions, these new sanctions are the first to target a sector (in this case the energy sector) of the Russian economy…
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