On 30 July 2015, the United States Department of the Treasury added numerous individuals and entities to its Specially Designated Nationals (“SDN”) and Sectoral Sanctions Identifications (“SSI”) lists under its programme of sanctions related to Russia and Ukraine. The Wall Street Journal has quoted a US official as saying that the new listings are “not intended to be an escalation or a de-escalation of sanctions” but merely to maintain the strength of existing sanctions by preventing evasion.
According to a Treasury Department press release, the new SDN listings target individuals and entities involved in sanctions evasion related to Russia and Ukraine, as well as individuals associated with the former Ukrainian government, and port and ferry operators based in Crimea. The new SSI listings consist of banks, financial institutions and other companies that the US has determined are 50% or more owned by the Russian bank Vnesheconombank (“VEB”) and the Russian energy company OJSC Rosneft Oil Company (“Rosneft”), which were previously placed on the SSI list. A complete list of the newly designated individuals and entities can be found in the announcement of the designations on the website of the Treasury Department’s Office of Foreign Assets Control (“OFAC”).
The property of individuals or entities on the SDN list is “blocked”, and US persons are prohibited from dealing with those individuals and entities or their property. The SSI list involves lesser sanctions, consisting of restrictions on transactions by US persons involving the debt or equity of the listed companies.
The additions to the SDN list include a number of companies and individuals said to have assisted in sanctions evasion by Russian businessmen Gennady Timchenko and Boris Rotenberg and Russian defence company Kalashnikov Concern, all of which were previously added to the SDN list. The new designees include a number of companies linked to Timchenko with addresses in Russia, Finland, Cyprus, Romania, Switzerland and the British Virgin Islands, together with some of their principals; a Finnish company linked to Rotenberg; Rotenberg’s son Roman Rotenberg; and several Russian companies and individuals linked to Kalashnikov.
The US also has added to the SDN list a number of individuals associated with the government of former Ukrainian premier Viktor Yanukovich, including Yanukovich’s son Oleksandr. The US also has designated the company PJSC Mako Holding, based in the Donetsk region of Eastern Ukraine, on the ground that it is owned by Oleksandr Yanukovich. The remaining SDN designations are of five port operators and three ferry operators based in Crimea. The US has a comprehensive embargo of Crimea, and three of the five port operators are also subject to asset freezes by the EU.
The SSI additions consist of Russian banks, energy companies and other companies that the US has determined are 50% or more owned by VEB or Rosneft. All of the newly added entities are based in Russia except for Bank BelVEB OJSC, which is based in Belarus. The VEB-linked entities are subject to SSI Directive 1, which prohibits US persons from transactions involving the companies’ newly issued equity securities or debt having a maturity of 30 days or more. The Rosneft-linked entities are subject to Directive 2, which prohibits US persons from transactions involving the companies’ newly issued equity securities or debt having a maturity of 90 days or more, and Directive 4, which prohibits US persons from supplying goods and services for certain oil exploration and production activities.