In response to the deteriorating political and military situation on the Ukraine border, last night the Biden administration issued an initial set of sanctions targeting activities involving the Donetsk and Luhansk regions of Ukraine.

Pursuant to President Biden’s Executive Order, any new investment in, importation from or exportation to the so-called Donetsk People’s Republic (DNR) or Luhansk People’s Republic (LNR) regions of Ukraine by a U.S. person or to or from the United States is prohibited. U.S. persons also are prohibited from approving, financing, facilitating or guaranteeing transactions by a non-U.S. person that would be prohibited if performed by a U.S. person or from the United States. These restrictions are similar to those imposed on the Crimea region of Ukraine following its annexation by Russia in 2014, which resulted in Crimea becoming functionally off limits to United States’ commerce. That trade embargo now has been extended to Donetsk and Luhansk.

In addition to the prohibitions noted above, the Executive Order authorizes designation and blocking of the property and property interests of individuals operating in the DNR or LNR, or who are owned, controlled, acting on behalf of or otherwise supporting such persons. No individuals or entities were designated pursuant to this authorization on Feb. 21, 2022.

The Executive Order was issued along with six general licenses authorizing the wind-down of transactions involving the DNR and LNR; agricultural and medical exports; transactions relating to telecommunications and mail; the business of international organizations; noncommercial personal remittances; and certain exports incident to internet-based communications.

These DNR- and LNR-focused sanctions are considered an initial salvo in the rising geopolitical hostilities between the White House and the Kremlin. According to White House Press Secretary Jen Psaki, “these measures are separate from and would be in addition to the swift and severe economic measures we have been preparing in coordination with Allies and partners should Russia further invade Ukraine.” The White House also said on Monday night that additional sanctions would be announced on Feb. 22, 2022, and that the United States was coordinating with its European partners on the Tuesday announcement.

Should Russia take further steps to invade Ukraine, a more robust portfolio of Russia-focused economic and trade sanctions are expected to be imposed, as discussed in this previous posting.