To confront recent Russian cyber activity, last week the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) designated five Russian entities and 19 individuals under the Countering America’s Adversaries Through Sanctions Act (CAATSA) and Executive Order (E.O.) 13694, ‘Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities’. This announcement comes as the United States joined Britain, France and Germany in condemning Russia for its presumed role in the nerve-gas attack on a Russian spy and his daughter on British soil. (See client alert 2018-066 for a discussion on the UK government’s response).

The new designations aim to hold accountable those Russian government officials and oligarchs responsible for targeting U.S. government entities and critical infrastructure sectors. The new designations also represent the Trump administration’s attempt to discourage Russia from: 1) continuing its efforts to destabilise Ukraine; 2) occupying Crimea; 3) interfering in U.S. elections; and 4) continuing its alleged corruption and human rights abuses.

The entities designated under CAATSA include the Federal Security Service (FSB) and the Main Intelligence Directorate (GRU), each of which, the Trump administration has concluded, “knowingly engages in significant activities that undermine cybersecurity on behalf of the Russian Government”.1 OFAC designated the Internet Research Agency LLC (IRA) and a number of its employees under E.O. 13694. According to OFAC, this troll farm “tampered with or altered information in order to interfere with the 2016 U.S. election”.2

The new sanctions will block all property and interests in property of the designated persons subject to U.S. jurisdiction, while also prohibiting U.S. persons from engaging in transactions with the designees. The sanctions also bar the designated individuals from travelling to the United States.

One day after the new sanctions were announced, Russia announced that it will expand its own ‘blacklist’ of Americans. According to Russian Deputy Foreign Minister Sergei Ryabkov, Russia will use “the principle of parity” to respond, but has not ruled out additional measures. At the same time, Russia said it would expel British diplomats in response to Britain’s recent expulsion of 23 Russian diplomats as discussed in our recent client alert. Today, the UK Foreign Secretary Boris Johnson met with EU foreign ministers in Brussels. The EU Foreign Affairs Council has now released a Statement in which it strongly condemned the attack and confirmed it took “extremely seriously the UK Government’s assessment that it [was] highly likely that the Russia Federation [was] responsible.” It also called on Russia urgently to address “the questions raised by the UK and the international community and to provide immediate, full and complete disclose of its Novichok programme to the [Organisation for the Prohibition of Chemical Weapons (OPWC)].” It expressed “its unqualified solidarity with the UK and its support, including for the UK’s efforts to bring those responsible for this crime to justice.” Later today, Mr Johnson will also meet Jens Stoltenberg, the NATO secretary-general, to discuss joint action. A joint statement is anticipated at 17:00 hours.