President Obama announced Thursday the imposition of sanctions on additional senior Russian officials and a Russian bank over the annexation of Crimea. On the same day, the President also issued a new Executive Order that provides authority for blocking of companies in Russia’s financial services, energy, metals and mining, engineering and defense sectors.
Specifically, the Executive Order, “Blocking Property of Additional Persons Contributing to the Situation in Ukraine,” provides authority for the Secretary of the Treasury, in consultation with the Secretary of State, to block any person or entity that is determined “to operate in such sectors of the Russian Federation economy as may be determined ..., such as financial services, energy, metals and mining, engineering, and defense and related materiel.” No persons or entities were immediately designated pursuant to Thursday’s Executive Order.
The following additional individuals and Russian bank were designated today as blocked parties by the Office of Foreign Assets Control (“OFAC”) pursuant to Executive Order 13661:
- Evgeni Viktorovich Bushmin (Deputy Speaker of the Federation Council of the Russian Federation; Chairman of the Council of the Federation Budget and Financial Markets Committee);
- Vladimir Michailovich Dzhabarov (First Deputy Chairman of the International Affairs Committee of the Federation Council of the Russian Federation);
- Andrei Alexandrovich Fursenko (Aide to the President of the Russian Federation);
- Alexei Gromov (First Deputy Chief of Staff of the Presidential Executive Office; First Deputy Head of Presidential Administration; First Deputy Presidential Chief of Staff);
- Sergei Ivanov (Chief of Staff of the Presidential Executive Office);
- Victor Petrovich Ivanov;
- Vladimir Igorevich Kohzin;
- Yuri Valentinovich Kovalchuk;
- Sergei Mikhailovich Mironov (Member of the Council of the State Duma; Leader of A Just Russia Party; Member of the State Duma Committee on Housing Policy and Housing and Communal Services);
- Sergey Yevgenyevich Naryshkin;
- Viktor Alekseevich Ozerov (Chairman of the Security and Defense Federation Council of the Russian Federation);
- Oleg Evgenevich Panteleev (First Deputy Chairman of the Committee on Parliamentary Issues);
- Arkady Rotenberg;
- Boris Rotenberg;
- Nikolai Ivanovich Ryzhkov (Senator in the Russian Upper House of Parliament; Member of the Committee for Federal Issues, Regional Politics and the North of the Federation Council of the Russian Federation);
- Igor Dmitrievich Sergun; (Lieutenant General; Chief of the Main Directorate of the General Staff (GRU);Deputy Chief of the General Staff);
- Gennady Timchenko;
- Aleksandr Borisovich Totoonov (Member of the Committee on Culture, Science, and Information, Federation Council of the Russian Federation);
- Vladimir Yakunin;
- Sergei Vladimirovich Zheleznyak (Deputy Speaker of the State Duma of the Russian Federation); and
- Bank Rossiya (f.k.a. Aktsionerny Bank Russian Federation).
Under OFAC’s general guidance, a person whose property and interests in property are blocked pursuant to an Executive Order is considered to have an interest in all property of an entity in which it owns, directly or indirectly, a 50% or greater interest. The property and interests in property of such an entity are also generally blocked regardless of whether the entity itself is listed in the annex to an Executive Order or otherwise placed on OFAC’s Specially Designated Nationals and Blocked Persons List (the “SDN List”). However, such “automatic” blocking is only triggered when a designated party has a 50% or greater ownership interest. In other words, an entity is not automatically blocked solely because a designated party exercises control over it, such as by serving as an officer or director of the entity, although OFAC may choose to specifically designate an entity as a result of such control being exercised by a blocked party.