On 2 September 2015, the U.S. Commerce Department’s Bureau of Industry and Security ("BIS") amended the Export Administration Regulations ("EAR") to add 29 parties to the Entity List for violating international law and fueling the conflict in eastern Ukraine. The additions were made to ensure the efficacy of existing U.S. sanctions on Russia. The 29 parties are located in the Crimea region of Ukraine, Cyprus, Finland, Romania, Romania, Russia, Switzerland, Ukraine, and the United Kingdom (British Virgin Islands). The Federal Register notice is available here: http://www.gpo.gov/fdsys/pkg/FR-2015-09-02/pdf/2015-21682.pdf.

The licensing requirements imposed by BIS on the 29 parties are as follows:

  • License requirement for all items subject to the EAR

BIS has imposed a license requirement on the export, reexport, or transfer (in-country) of all items subject to the EAR on 14 of the 29 parties added to the Entity List, with a presumption of denial. No license exceptions are available for exports, reexports, or transfers (in-country) to these 14 parties. All 14 parties were already designated by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) as Specially Designated Nationals (“SDNs”), meaning that U.S. persons generally are prohibited from dealing with such parties and must block their property and interests in property if it comes within the United States or within the possession or control of a U.S. person.

The 14 parties subject to this license requirement are:

  1. Private Joint-Stock Company Mako Holding;
  2. Airfix Aviation Oy
  3. IPP Oil Products (Cyprus) Limited
  4. Open Joint Stock Company Kontsern Izhmash
  5. Izhevsky Mekhanichesky Zavod JSC
  6. Set Petrochemicals Oy
  7. Southeast Trading Oy
  8. Southport Management Services Limited
  9. State Enterprise Evpatoria Sea Commercial Port
  10. State Enterprise Feodosia Sea Trading Port
  11. State Shipping Company Kerch Sea Ferry
  12. State Enterprise Kerch Sea Commercial Port
  13. State Enterprise Sevastopol Sea Trading Port
  14. State Enterprise Yalta Sea Trading Port
  • License requirement for all items subject to the EAR when used in projects specified in EAR Part 746.5 (i.e., the Russian Industry Sector Sanctions)

15 subsidiaries of Rosneft were also added to the Entity List. Rosneft is already on the Entity List and is an entity identified on OFAC’s Sectoral Sanctions Identifications List. Because the 15 subsidiaries are owned by 50% or more by Rosneft, they are also subject to OFAC’s sectoral sanctions same as Rosneft. The Entity List imposes a license requirement for the export, reexport, or transfer (in-country) of all items subject to the EAR to the 15 Rosneft subsidiaries when the exporter/reexporter, or transferor knows that the item will be used directly or indirectly in exploration for, or production of, oil or gas in Russian deepwater, Arctic offshore locations, or shale formations in Russia, or is unable to determine whether the item will be used in such projects. Note that the license requirement applies to all items subject to the EAR and not only to the items specified in Part 746.5(a). A presumption of denial will apply when the item is for use directly or indirectly for exploration of production from deepwater, Arctic offshore, or shale projects in Russia that have the potential to produce oil.

The 15 parties subject to this license requirement are:

  1. CJSC Vankorneft
  2. Neft-Aktiv LLC
  3. OJSC Achinsk Refinery
  4. OJSC Angarsk Petrochemical Company
  5. OJSC Kuybyshev Refinery
  6. OJSC Novokuybyshev Refinery
  7. OJSC Orenburgneft
  8. OJSC RN Holding
  9. OJSC Samotlorneftegaz
  10. OJSC Syzran Refinery
  11. PJSC Verkhnechonskneftegaz
  12. Rosneft Trade Limited
  13. Rosneft Trading S.A.
  14. RN-Komsomolsky Refinery LLC
  15. RN-Yuganskneftegaz LLC