President Obama signs Second Executive Order Expanding Sanctions to Cover Wide Range of Potential Russian Targets; OFAC adds names to SDN List; Senate and House Propose Bills; EU Sanctions Also Keeping Pace

The United States has responded to the recent political crisis in Ukraine, the presence of Russian troops in the Ukrainian Crimea region, and the March 16, 2014 Crimean Referendum to join Russia, by taking actions targeting key Ukrainian and Russian figures, opening the door for potential wide-ranging sanctions against other Russian individuals and entities, and proposing loan guarantee bills for Ukraine.

The sequence of events over the past month is as follows:

  • February 19, 2014 -- Visa Sanctions: The US State Department announced a visa ban on 20 Ukrainian officials determined to be complicit in the Kiev violence.
  • March 6, 2014 -- Executive Order 13660 to designate as Specially Designated Nationals (“SDN”) individuals and entities involved in undermining security and territorial integrity of Ukraine: President Obama expanded the visa ban and signed an Executive Order authorizing the US Treasury Department to designate individuals and entities that have been involved in undermining the security and territorial integrity of Ukraine. View the Executive Order
    • The Executive Order blocks “all property and interests in property” of persons determined by the Treasury Department to be involved in the violence and political instability of Ukraine. Additionally, the Executive Order restricts the immigration and donations to or by the determined persons.
  • March 17, 2014 -- OFAC sanctions four individuals and puts their names on the SDN List under the first Executive Order, 13660 Their names appear with the designator “[UKRAINE]” and are listed below.
  • March 17, 2014 -- President issues Second, broader, Executive Order, authorizing blocking, visa and donations sanctions on designated Russian government officials and other persons View the Executive Order
    • Individuals and entities that can be sanctioned under the new Executive Order include persons determined by Treasury:
      • to be an official of the Government of the Russian Federation;
      • to operate in the arms or related materiel sector of the Russian Federation;
      • to be owned or controlled by, or to have acted or purported to act for or on behalf of:
        • a senior official of the Government of the Russian Federation;
        • a person whose property or interests in property are blocked pursuant to this order;
      • to have materially assisted, sponsored, or provided financial, material or technology support for, or goods or services to or in support of:
        • a senior official of the Government of the Russian Federation;
        • a person whose property or interests in property are blocked pursuant to this order.
    • Seven senior Russian officials were immediately sanctioned under the Executive Order, and added to the SDN list on the same day. Individuals added to the SDN List pursuant to this Executive Order are designated by “[UKRAINE2]”
    • The White House separately published a Fact Sheet explaining the reasons for the sanctions. View the Fact Sheet
    • The sanctioned officials, and the reasons for their sanctions, are provided in the chart below.

In the meantime, Congress has been equally busy. On March 6, 2014, the House passed a bill that backs $1 billion in Ukraine loan guarantees to help restore the country’s financial stability. On March 12, 2014, the Senate Committee on Foreign Relations passed a bill, 14-3, which would sanction Ukrainians and Russians responsible for the violence and would also guarantee loans up to $1 billion to Ukraine. Unlike the House bill, the proposed Senate legislation includes additional sanctions that complement the Executive Order. Specifically, the proposed sanctions target Ukrainians and Russians found to have committed violence against anti-government protesters and Russian officials responsible for freezing assets and revoking visas. Both bills await Senate body approval.

On the global stage, on March 17, 2014 the European Union sanctioned 13 individuals from Russia and 8 from Ukraine's Crimea region that are held associated with “undermin[ing] or threat[ing] the territorial integrity, sovereignty and independence of Ukraine.” The sanctions prevent entry or transit of these individuals to EU member states and authorizes freezing of their assets. This list adds to the EU’s March 5, 2014 list of sanctioned individuals. A complete list of these individuals appears in the chart below.

The breadth of the individuals and entities in the Russian government and Russian defense sector that could be sanctioned under the new U.S. Executive Order, the bills before the U.S. Congress, the span of international sanctions rolling out around the western world, and last but certainly not least, the likelihood of retaliatory Russian sanctions indicate deep troubles for some time to come. According to former US Congressman Philip English, "the President's new sanctions are the opening bid in a process likely to produce a much broader set of targeted economic restrictions against Russia by the United States and the European Union. From here, the international community can be expected to move from freezing the assets of prominent individuals to considering punitive financial, trade and currency sanctions, as a backdrop to Congress debating sweeping legislation. Lawmakers will move swiftly to react to the Crimean crisis and its aftermath, raising the stakes and potentially proposing draconian restrictions. "

The list of individuals, as sanctioned by each country, is provided below:

Click here to view table.