For any companies with interests in Russia or Ukraine, the events of the past several weeks and sanctions imposed by the United States, the European Union (EU), Switzerland, Canada and others may impact their business. McDermott’s International Trade Group is actively monitoring developments and advising clients on these fast-evolving trade sanctions. Following is a brief summary of the sanctions imposed to date.
Last month, the U.S. Department of State issued a visa ban for several Ukrainian government officials. On March 6, President Obama issued an executive order (EO) authorizing financial sanctions and travel bans against Russian and Ukrainian government officials (EO 13660). On March 17, he issued another EO extending the sanctions authority to apply to Russian government officials, those involved in the Russian arms industry and those providing material support to the Russian government (EO 13661). Under that authority, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) added 11 individuals (Russian and Ukrainian nationals) to OFAC’s Specially Designated Nationals (SDN) list (Ukraine Sanctions March 17).
On March 20, OFAC added 20 more individuals, including senior Russian government officials, business leaders and a Russian bank (Bank Rossiya in St. Petersburg) to the SDN list (Ukraine Sanctions March 20). Additionally, President Obama issued another new EO on March 20, expanding the authority for the U.S. government to impose sanctions on key Russian business sectors, including energy, financial services, mining and metals, engineering, defense and related material (EO March 20).
In parallel with the imposition of U.S. sanctions, the EU on March 5 (EU Ukraine Sanctions March 5) and March 17 (EU Ukraine Sanctions March 17) designated 39 Ukrainian and Russian individuals for sanctions under EU rules. Canada and Switzerland have followed suit and designated many of the same individuals for sanctions under Canadian and Swiss laws.
On March 21, the EU imposed additional sanctions (asset freezes and travel bans) on 12 senior Russian and Crimean government officials (EU Ukraine Sanctions March 21).
On March 20, Russia imposed retaliatory sanctions on nine U.S. government officials, including Deputy National Security Advisor for International Economic Affairs Caroline Atkinson; Assistant to the President and Senior Advisor Daniel Pfeiffer; Deputy National Security Advisor for Strategic Communications Benjamin Rhodes; House Speaker John Boehner; Senate Majority Leader Harry Reid; Senate Foreign Relations Committee Chairman Robert Menendez; and Senators John McCain, Mary Landrieu and Dan Coats.
EU and Ukraine Sign Association Agreement
Coincident with these developments, on March 21, the EU and Ukraine signed a bilateral Association Agreement that will encourage closer political, economic and trade ties. The trade commitments of the Association Agreement will be finalized after Ukraine’s elections in May.