EU Designates Viktor Yanukovych and His Son: On August 2, 2022, the EU designated the former president of Ukraine, Viktor Yanukovych. Viktor Yanukovych was pro-Russia when he was president, and a Ukrainian court later found him guilty of treason. He currently resides in Russia, and the EU alleged him to be involved in a Russian special operation to re-install him as the president of Ukraine. The EU also designated Viktor Yanukovych’s son, Oleksandr Yanukovych. Oleksandr Yanukovych amassed wealth and business interests during his father’s presidency, and as a result of his close ties to the pro-Russian separatists in eastern Ukraine.
UK Designates Two Rosneft Board Members and Delisted One Individual: On August 2, 2022, the UK designated Didier Casimiro and Zeljko Runje, two members of the Management Board of Public Joint Stock Company Rosneft Oil Company (“Rosneft”). The UK also published amendments for 18 previously-designated individuals, which describe the basis of their designations, and delisted Olga Ayziman.
UK Extends General License for Wind Down with Rosbank: On July 29, 2022, the UK extended license INT/2022/1968500 two months. The general license was set to expire on July 30, 2022, but now expires on September 30, 2022 instead. INT/2022/1968500 allows a person, other than Rosbank or a Rosbank subsidiary, to wind down “any transaction to which it is a party” that involve Rosbank or its subsidiaries.
U.S. Designates Numerous Individuals and Entities: On July 29, 2022, the Office of Foreign Assets Control (“OFAC”) designated two Russian individuals and four entities that support Russia’s influence operations and election interference activities. These include English-language website STOP-Imperialism, Aleksandr Viktorovich Ionov, and two organizations Mr. Ionov founded that have targeted the U.S., Iran, Venezuela and Lebanon. OFAC also added the Center for Support and Development of Public Initiative Creative Diplomacy and its founder to its List of Specially Designated Nationals And Blocked Persons (“SDN List”) for working on behalf of the Russian government.
OFAC published another round of SDN designations on August 2, 2022, targeting Russian elites, and companies that operate in sectors that generate substantial revenue for Russia. The new designees included Andrey Grigoryevich Guryev, the founder of Russian chemical company PhosAgro, Viktor Filippovich Rashnikov, majority owner of a sanctioned steel company (described below), and the heads of a pro-Kremlin media group and technology company. OFAC also sanctioned Publichnoe Aktsionernoe Obschestvo Magnitogorskiy Metallurgicheskiy Kombinat (“MMK”), one of the world’s largest steel producers, and two of its subsidiaries in Russia and Turkey.
The designations also included eight Russian companies and research organizations involved in the production or design of microchips or semiconductors, and twelve institutions involved in the research and manufacture of digital circuits, microelectronics, and other high-end technologies. These organizations included the Moscow Institute of Physics and Technology, and Skolkovo Institute of Science and Technology.
U.S. Issues Five General Licenses and Three FAQs: On August 2 and 3, 2022, OFAC issued five new general licenses (“GLs”) and two new “Frequently Asked Questions” (“FAQs”), clarifying whether certain entities are blocked based on the designated of affiliated individuals.
- GL 40B: permits the provision, exportation, or reexportation of goods, technology, or services to ensure the safety of civil aviation. The revision added Joint Stock Company State Transportation Leasing Company to the list of entities that may receive certain goods, technologies, and services, as specified in the license.
- GL 43A: permits the divestment or transfer of the debt or equity of Public Joint Stock Company Severstal and Nord Gas PLC. The revision now also: (1) authorizes the “facilitation of the divestment or transfer” of debt or equity of these entities and of entities in which they hold 50 percent or more ownership interests; and (2) explicitly permits U.S. financial institutions to unblock covered debt or equity that was blocked on or after June 2, 2022, but before June 28, 2022, for transactions authorized by GL 43A.
- GL 47A: permits the wind down of any transaction involving: (1) Skolkovo Foundation; (2) Skolkovo Institute of Technology; (3) Technopark Skolkovo Limited Liability Company; (4) Federal State Institution of Higher Vocational Education Moscow Institute of Physics and Technology; (5) Publichnoe Aktsionernoe Obschestvo Magnitogorskiy Metallurgicheskiy Kombinat; (6) Joint Stock Company State Transportation Leasing Company; or (7) any entity owned 50 percent or more by one or more of the foregoing, provided that any payment must to a blocked person must be made into a blocked account. The transactions are authorized through 12:01 a.m. eastern time, September 1, 2022.
- GL 48A: permits the divestment or transfer, or facilitation of the divestment or transfer, of debt or equity of: (1) Publichnoe Aktsionernoe Obschestvo Magnitogorskiy Metallurgicheskiy Kombinat; (2) Joint Stock Company State Transportation Leasing Company; or (3) any entity owned 50 percent or more by one or more of those parties, to a non-U.S. person, through 12:01 a.m. eastern time, October 3, 2022.
- GL 49: permits the wind down of any transaction involving: (1) MMK Metalurji Sanayi Ticaret Ve Liman Isletmeciligi Anonim Sirketi; or (2) any entity it owns 50 percent or more of. The transactions are authorized through 12:01 a.m. eastern time, January 31, 2023, provided that any payment is made into a blocked account.
- OFAC issued FAQ 1073, explaining that Sheremetyevo International Airport is not blocked as a result of the designation of Alexander Anatolevich Ponomarenko.
- OFAC issued FAQ 1074, explaining that EuroChem Group AG is not blocked as a result of the designation of Andrey Igorevich Melnichenko.
- OFAC issued FAQ 1075, explaining that PhosAgro PJSC is not blocked as a result of the designation of Andrey Grigoryevich Guryev and Andrey Andreevich Guryev
U.S. Adds 25 Foreign-Produced Aircraft to Restricted List: On August 2, 2022, the Bureau of Industry and Security (“BIS”) updated the list of aircraft that have flown into Russia or Belarus in apparent violation of the Export Administration Regulations (“EAR”). In adding the first 25 foreign-produced aircraft, there are now a total of 183 aircraft listed for apparent violations of U.S. export controls. Any subsequent actions taken with regard to any of the listed aircraft, including, but not limited to, refueling, maintenance, repair, or the provision of spare parts or services, are subject to General Prohibition Ten of the EAR. General Prohibition Ten prohibits various activities relating to an item subject to the EAR where there is knowledge that a violation has occurred or is about to occur in connection with that item. “Today’s identification of 25 foreign-produced aircraft further degrades Russian airlines’ ability to operate their fleets of both U.S. and EU airplanes,” said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod.
General U.S. Export Update: On August 1, 2022, BIS announced its first non-monetary administrative resolution under new settlement policies announced last month. In situations involving a lower threat to national security, BIS will seek to resolve administrative enforcement actions with non-monetary penalties such as suspended denials of export privileges. To be eligible, respondents must accept responsibility, including by admitting to the underlying conduct, and also agree to other remediation-oriented measures such as participation in training programs and compliance audits. While BIS is focused on aggressive enforcement of export controls as they relate to Russia, this resolution may provide another enforcement outcome for Russia-related violations where BIS views the conduct as less serious from a national security perspective.