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Beginning Feb. 21, 2022, the U.S. government began to issue sanctions on Russian officials in its continued response to the Russian invasion of Ukraine. In its latest round of designations, the U.S. Department of Treasury, Office of Foreign Assets Control (OFAC)  designated President Vladimir Putin, along with several members of his cabinet and inner circle. These latest sanctions packages and other measures come on the heels of multiple prior waves of U.S. sanctions announced over the past week.

In addition to these sanctions, the United States and other allies agreed to cut off Russia from SWIFT banking communication system. The move is part of escalating, coordinated efforts by the United States and European countries to target the Russian financial sector, which include sanctions from the United Kingdom, European Union, and Switzerland.

Third Wave of Sanctions

On Feb. 25, 2022, OFAC added the President of the Russian Federation, Vladimir Putin to the Specially Designated Nationals (SDN) List. In addition to President Putin, OFAC designated Russia’s Minister of Foreign Affairs, Sergei Viktorovich Lavrov, Russia’s Minister of Defense, Sergei Shoigu, and Chief of the General Staff of the Russian Armed Forces and First Deputy Minister of Defense, General Valery Gerasimov as SDNs. These measures follow an initial sanctions package announced Feb. 22, 2022,  which was targeted at the so-called Donetsk People’s Republic and the Luhansk People’s Republic (collectively, the Covered Regions). The sanctions relating to Nord Stream 2 were issued Feb. 23, 2022, and the banking sanctions and export controls were announced Feb. 24, 2022.

As a result of the sanctions measures, U.S. persons will effectively be prohibited from all dealings with President Putin and the other designated Russian officials direct or indirect. All property and assets of President Putin (as well as the other designated Russian officials) that are located in the United States, or in U.S. persons’ possession or control, are now deemed frozen and must be disclosed to OFAC. Further, any entity that is owned (directly or indirectly) 50% or more by any restricted person is also prohibited. The designation of Putin and Lavrov is seen as largely symbolic as Putin and Lavrov do not maintain significant assets in the United States, and from a compliance standpoint, there are significant challenges determining whether Putin and Lavrov are ultimate beneficial owners in entities comprised of opaque shell companies and other vehicles for obfuscating ultimate beneficial ownership around the world. All transactions by U.S. persons or within (or transiting) the United States that pertain to any property or any property interests of a restricted person are prohibited unless authorized by a general license or specific license granted by OFAC. Lastly, U.S. persons are prohibited from receiving or contributing assets, goods, products, or services for the benefit of restricted persons.

Read the full GT Alert.

Tags: Cyril T. Brennan, Export Controls & Economic Sanctions, Francisco J. Vélez, GT Washington D.C., International Trade Government, Kara M. Bombach, Law & Policy, Sonali Dohale
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Photo of Kara M. Bombach Kara M. Bombach

Kara Bombach assists companies and organizations to lawfully export goods, technology and services around the globe. She places emphasis on helping clients achieve practical, workable solutions to complex regulatory situations arising under anti-corruption and anti-bribery measures (U.S. Foreign Corrupt Practices Act (FCPA) and

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Kara Bombach assists companies and organizations to lawfully export goods, technology and services around the globe. She places emphasis on helping clients achieve practical, workable solutions to complex regulatory situations arising under anti-corruption and anti-bribery measures (U.S. Foreign Corrupt Practices Act (FCPA) and OECD Convention), export control laws (EAR and ITAR), anti-boycott laws, and special sanctions (embargoes) maintained by the U.S. government (OFAC and other agencies) against various countries (including Iran, Cuba and Russia), entities and individuals. In cases of foreign investment in the United States, Kara advises on the Exon-Florio provisions relating to U.S. national security concerns. She represents companies before the Committee on Foreign Investment in the United States (CFIUS), and also assists clients in mitigating foreign ownership, control or influence (FOCI) as may be required by CFIUS or U.S. national industrial security regulations.

Kara regularly represents clients in matters before U.S. government agencies, including the U.S. Departments of Commerce, State, Treasury and Defense. Kara has significant experience representing individuals and entities before OFAC in delisting matters and challenges to OFAC sanctions designations.

She advises national and multi-national companies (including Fortune® 5) on best practices in the development and delivery of compliance policies and procedures, training, and risk assessments, as well as executing cross-border export, sanctions and anti-corruption due diligence in mergers and acquisitions, targeted internal risk assessments, and compliance investigations.

Kara also counsels international not-for-profit and relief/aid organizations on best practices in economic sanctions, trade, and anti-corruption compliance issues that arise in their global operations, frequently in challenging and austere environments. She has provided legal services to organizations such as Save the Children (US), ONE Campaign, Mercy Corps, the International Committee of the Red Cross, Not on Our Watch/The Sentry, and The Enough Project.

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Photo of Cyril T. Brennan Cyril T. Brennan

Cyril (Cy) Brennan focuses his practice on international trade regulation and compliance, with an emphasis on U.S. export controls and economic sanctions. Cy handles matters regarding the International Traffic in Arms Regulations (ITAR), the Export Administration Regulations (EAR), U.S. sanctions programs administered by…

Cyril (Cy) Brennan focuses his practice on international trade regulation and compliance, with an emphasis on U.S. export controls and economic sanctions. Cy handles matters regarding the International Traffic in Arms Regulations (ITAR), the Export Administration Regulations (EAR), U.S. sanctions programs administered by the Treasury Department’s Office of Foreign Assets Control (OFAC) and the Department of Commerce’s anti-boycott regulations. In addition, he represents clients before the Committee on Foreign Investment in the United States (CFIUS), and advises clients on the Foreign Corrupt Practices Act (FCPA), the foreign direct investment reporting requirements of the Bureau of Economic Analysis (BEA), and other trade and investment-related regulations in the context of mergers and acquisitions.

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Photo of Sonali Dohale Sonali Dohale

Sonali Dohale assists companies engaged in international business navigate U.S. international trade laws and regulations. She counsels clients on a range of economic sanctions and export controls issues, including those arising under sanctions programs administered by the U.S. Department of the Treasury’s Office…

Sonali Dohale assists companies engaged in international business navigate U.S. international trade laws and regulations. She counsels clients on a range of economic sanctions and export controls issues, including those arising under sanctions programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), the International Traffic in Arms Regulations (ITAR), and the Export Administration Regulations (EAR). Sonali also represents companies engaged in cross-border mergers and acquisitions before the Committee on Foreign Investment in the United States (CFIUS). Her practice also involves assisting companies with internal investigations and compliance programs under various anti-corruption regimes (including the U.S. Foreign Corrupt Practices Act (FCPA) and World Bank’s Integrity Compliance Guidelines).

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Photo of Francisco J. Vélez ‡ Francisco J. Vélez ‡

Francisco J. Vélez focuses his practice on international trade regulation with an emphasis on U.S. export controls and economic sanctions. He counsels clients on a range of economic sanctions and export controls issues, including those arising under sanctions programs administered by the U.S.

Francisco J. Vélez focuses his practice on international trade regulation with an emphasis on U.S. export controls and economic sanctions. He counsels clients on a range of economic sanctions and export controls issues, including those arising under sanctions programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), the International Traffic in Arms Regulations (ITAR), and the Export Administration Regulations (EAR).

‡ Admitted to practice in Florida. Practice in District of Columbia limited to federal courts and agencies.

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