U.S. companies doing business with Russia should take precautions following the imposition of economic sanctions against certain Russian persons and interests. Over the past two weeks, President Obama issued three executive orders responding to Russia's military and political intervention in the Ukraine. Although the U.S. sanctions on Russia currently target specific Russian parties and are fairly narrow in scope, they open the door to more expansive measures if tensions mount and U.S.-Russian relations continue to sour.

President Obama issued Executive Order 13660 on March 6, 2014, establishing a general framework for imposing sanctions on Russia. That executive order blocked the property of and prohibited U.S. companies from doing business with certain persons, but it did not specify who those persons were. That ambiguity was intentional as the U.S. sought to resolve the Ukrainian conflict through diplomatic channels. However, Russia's moves to annex Crimea following the March 16 referendum signaled an escalation in the crisis, and Obama responded by issuing Executive Order 13661 on March 17. This second executive order blocks the property of and prohibits U.S. companies and their foreign branches from transacting with seven Russian government officials and any entities owned or controlled by them. The U.S. Treasury Department expanded that list by adding several other Russian and Ukrainian individuals, as well as a Russian bank that finances many Russian government officials, to the Specially Designated Nationals List.

On March 20, the president issued a third executive order opening the door to economic sanctions against Russia's financial services, energy, metals and mining, engineering and defense industries. Although these sectors are not currently restricted, the new executive order lays the groundwork for further sanctions in the event the crisis worsens. Following these unilateral actions, Obama is in Europe this week for meetings with the Group of 7 industrial nations to propose a coordinated effort to increase pressure on Russia.

So where does this leave U.S. companies? For now, U.S. companies should screen Russian parties against the U.S. prohibited parties lists and assess the impact of any positive hits. American companies should also review any contracts or other agreements to determine the remedies available in the event of breach by Russian or Ukrainian parties or adverse government action. U.S. companies with operations in Russia should consider strategic options in the event the political situation deteriorates in the coming days or weeks. Companies operating in the financial services, energy, metals and mining, engineering and defense industries are especially vulnerable and should anticipate possible business interruptions in Russia and the Ukraine.

For its part, Russia responded to the U.S. sanctions by issuing sanctions of its own, but those have so far only targeted specific U.S. lawmakers, not U.S. businesses. U.S. companies are strongly advised to monitor political developments and changes to both the U.S. and Russian sanctions programs.