Today, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) sent a clear message to Putin: cease hostilities in eastern Ukraine in compliance with the Minsk Agreements, and withdraw from the Crimea region of Ukraine. The designations and identifications sent an equally clear message to U.S. and international businesses: OFAC will facilitate compliance with these sanctions, but do not anticipate a lifting of the Crimea embargo in the near future.

In the press release announcing the designation and identification of 34 individuals and entities under various Ukraine/Russia sanctions authorities, OFAC warns that the targeted sanctions will remain until Russia withdraws to its internationally recognized border, and the embargo on the Crimea region of Ukraine will remain until “Russia ends its occupation of the peninsula.” Businesses should therefore not take steps to re-engage in prohibited trade with the Crimea region or designated Ukrainian/Russian individuals or companies. In fact, U.S. businesses should expect the embargo to last for the foreseeable future.

In addition to the certainty of continued sanctions, today’s actions also signal that OFAC will assist compliance efforts by maintaining alignment with sanctions imposed by the European Union. Although there are notable differences between the sanctions regimes, (including the European imposition of restrictive measures as a matter of law on entities controlled by listed persons) compliance efforts by international businesses are greatly simplified when the U.S. and EU lists are in harmony.

OFAC’s identification of several subsidiaries of VTB Bank, Sberbank, and Rostec also demonstrates the agency’s desire to aid compliance efforts.  Financing restrictions were placed on these entities as a matter of law pursuant to the 50 Percent Rule prior to their inclusion on the Sectoral Sanctions Identification (SSI) List. Their placement on the list clarifies any possible ambiguity regarding their ownership.