On July 30, 2015, the US made a number of significant designations under its Ukraine/Russia-related sanctions program. Eleven individuals and 15 entities were designated as Specially Designated Nationals (SDNs) under three different Ukraine/Russia-related executive orders.
Thirty-five entities were separately designated on the US Sectoral Sanctions List (SSI List) under a fourth Ukraine/Russia-related executive order. In addition, the US issued a Crimea Sanctions Advisory to highlight practices being taken to circumvent or evade US sanctions that apply to Crimea.
The New Designations
The new SDNs include:
- 13 individuals and entities designated for their links to sanctions evasions by Gennady Timchenko, Boris Rotenberg and Kalishnikov Concern, previously designated SDNs;
- 2 entities designated for operating in the arms or related materiel sector in the Russian Federation;
- 4 former officials or close associates of the regime of Viktor Yanukovych, designated for destabilizing activities in Ukraine;
- 1 entity for its dealings with Oleksandr Yanukovych, a previously designated SDN; and
- 5 Crimean port operators and 1 Crimean sea ferry operator, designated because they operate in the Crimea region of Ukraine.
As a result of these designations, all property and interests in property of the designees that is in the US or in the possession or control of a US Person (meaning, primarily, a US citizen or US-incorporated company) are blocked and cannot be transferred without the approval of the Office of Foreign Assets Control (OFAC).
The SSI List designees consist of 18 entities determined to be owned 50% or more by Vnesheconombank, and 17 entities determined to be owned 50% or more by Rosneft Oil Company. US Persons are prohibited from dealing in certain debt or equity of SSI List designees.
The Crimea Sanctions Advisory
This Crimea Sanctions Advisory (the Advisory) relates to sanctions issued under Executive Order 13685 (the EO), which generally prohibits US Persons from involvement in Crimea-related transactions. The Advisory was issued "to highlight some of the practices that have been used to circumvent or evade" sanctions under the EO. It notes that "evasive practices identified by OFAC include the omission or obfuscation of references to Crimea and locations within Crimea in documentation underlying transactions involving" the US or US Persons.
In the financial transactions context, the Advisory notes a practice of omitting originator or beneficiary address information from SWIFT messages to obscure the connection to Crimea. In the international trade context, the Advisory states that references to Crimea have been obscured in trade transactions and documentation. The Advisory alerts readers to the possibility that a third-country distributor of US goods to "Russia" might not realize that the US does not recognize Crimea as a part of Russia.