International Top 30 position: 4

New sectoral sanctions and new SDNs: US expands Ukraine-related sanctions

On 16 July 2014, the US Treasury Department’s Office of Foreign Assets Control (OFAC) unveiled new Ukraine-related sanctions. As a result of these sanctions, five individuals and 11 entities were added to OFAC’s list of specially designated nationals and blocked persons (the ‘SDN list’). US persons are prohibited from engaging in or facilitating virtually any commerce with any person on the SDN list, absent OFAC licensure.

In a significant expansion of the Ukraine-related sanctions, OFAC also established a new sectoral sanctions identification (SSI) list, and designated two major Russian banks and two large energy companies for immediate inclusion. US persons may not provide debt financing longer than 90 days to any person on the SSI list; and in the case of the two banks, US persons are also prohibited from providing them with new equity. Unlike the SDN list, however, US persons generally remain able to conduct business with persons on the SSI list, and the entities’ assets under US jurisdiction remain unblocked.

The new SSI list is significant for several reasons, including: the four entities added to the SSI list are among Russia’s largest financial and energy enterprises — banks Gazprombank and VEB (formerly Vneshecononombank) and petroleum companies Rosneft and Novatek; and this is the first time that the US has imposed ‘Ukraine-related’ sanctions on Russian firms that do not have a clear expressed link to the ongoing events in Ukraine and Crimea…

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