On May 8, 2022, the United States increased pressure on Russia to de-escalate its conflict in Ukraine through new sanctions targeting individuals and entities critical to Russia’s war efforts, as well as broad sanctions against the provision of accounting, trust and corporate formation, and management consulting services to Russia. These latter sanctions were imposed through a new determination under the Executive Order 14071, “Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression.”[1] The Biden Administration explained that its objective in issuing this new determination was to “cut off” Russia’s access to U.S. services “which Russian Federation companies and Russian elites use to build wealth, generating revenue for Putin’s war machine, and evade sanctions.”[2]

Concurrent with this action, OFAC issued another determination authorizing the imposition of sanctions against any person determined to operate or have operated in Russia’s accounting, trust and corporate formation services, and management consulting sectors.[3] OFAC also designated an additional Russian state-owned financial institution and several financial institution executives, a weapons manufacturer, three state-controlled television stations, and eight maritime industry companies and 69 vessels.

Below we provide more detail on the U.S. government’s actions targeting Russia and their implications.

New Prohibitions on Accounting, Trust and Corporate Formation, and Management Consulting Services

On April 6, 2022, the Biden Administration issued E.O. 14071, prohibiting, in part, the “exportation, reexportation, sale or supply, directly or indirectly,” from the United States or by U.S. persons wherever located of certain categories of services to be determined by the Secretary of the Treasury, in consultation with the Secretary of State.[4] The scope of this prohibition was unclear because the executive order did not identify what any U.S. services that were covered.[5]

OFAC, in consultation with the State Department, has now issued a May 8, 2022 determination identifying those services to include the provision of accounting, trust, and corporate formation, as well as management consulting activities, effective June 7, 2022.[6] OFAC issued guidance clarifying the scope of the prohibited services and noted that:

  • “Accounting services” includes any “services related to the measurement, processing, and transfer of financial data about economic entities;”
  • “Trust and corporate formation services” includes “services related to assisting persons in forming or structuring legal persons, such as trusts and corporations; acting or arranging for other persons to act as directors, secretaries, administrative trustees, trust fiduciaries, registered agents, or nominee shareholders of legal persons; providing a registered office, business address, correspondence address, or administrative address for legal persons; and providing administrative services for trusts;” and
  • “Management consulting services” includes “services related to strategic business advice; organizational and systems planning, evaluation, and selection; development or evaluation of marketing programs or implementation; mergers, acquisitions, and organizational structure; staff augmentation and human resources policies and practices; and brand management.”

OFAC issued guidance outlining two narrow exceptions from the scope of the determination:

  • First, any services provided to U.S.-owned or controlled entities located in the Russian Federation are not prohibited; and
  • Second, any services provided in connection with the wind down or divestiture of an entity located in Russia that is not owned or controlled, directly or indirectly, by a Russian person are not prohibited. For purposes of the determination, OFAC anticipates defining “Russian person” as an individual who is a citizen or national of the Russian Federation, or an entity organized under the laws of the Russian Federation.

In connection with the determination, OFAC issued General License 34, which authorizes certain wind-down transactions related to the export of accounting, trust and corporate formation, and management consulting services through July 7, 2022. Additionally, OFAC issued General License 35, which authorizes certain transactions ordinarily incident and necessary to the export of credit rating or auditing services to any person located in Russia until August 20, 2022. OFAC clarified in new FAQ 1035 that the term “credit rating services” means services related to assessments of a borrower’s ability to meet financial commitments, including analysis of general creditworthiness or with respect to a specific debt or financial obligation, and the term “auditing services” means examination or inspection of business records by an auditor, including checking and verifying accounts, statements, or other representation of the financial position or regulatory compliance of the auditee.

In parallel, OFAC published a determination pursuant to E.O. 14024 that authorizes the imposition of sanctions against any person that operates the accounting, trust and corporate formation services, or management consulting sectors in Russia. This enables OFAC to add individuals or entities that provide such services in Russia to OFAC’s SDN List pursuant to EO 14024. OFAC has not yet made any designations pursuant to this new authority.

Additional SDN List Designations Targeting Russia

Designations of Financial Executives from Sberbank and Gazprombank. In a further escalation of sanctions targeting Russia’s financial sector, OFAC designated executives from two of Russia’s most important financial institutions. The banks themselves, along with dozens of their subsidiaries and a handful of their most senior executives, were already designated by OFAC earlier this year. OFAC designated eight board members from Russia’s largest bank, Sberbank, and 27 board members from its third-largest bank, Gazprombank’s (“GPB”), reasoning that Sberbank is “uniquely important to the Russian economy” because it holds a third of all bank assets in Russia and that GPB was “created to serve the financial needs” of Russia’s Gazprom, which is currently among the largest global natural gas exporters.

Designation of Joint Stock Company Moscow Industrial Bank (“MIB”) and Subsidiaries. State-owned MIB was also added to the SDN list, along with 10 MIB subsidiaries. OFAC clarified in its Frequently Asked Questions that transactions involving certain of MIB’s newly designated subsidiaries that are ordinarily incident and necessary to the exportation or reexportation of agricultural commodities to, from or transiting the Russian Federation are still authorized under General License 6A.

Designation of Weapons Manufacturer Promtekhnologiya. Citing Russia’s defense sector as a “key driver of Russia’s unprovoked invasion of Ukraine,” OFAC designated Promtekhnologiya, a state-supported private defense company that supplies Russia’s military and intelligence services and that has produced rifles used in Russia’s military operations in Eastern Ukraine.

Designation of State-Controlled Television Stations. Finally, OFAC designated three Russian state-owned television stations with the highest viewership, including Joint Stock Company Channel One Russia, Television Station Russia-1, and Joint Stock Company NTV Broadcasting Company. As part of this action, OFAC issued a new general license permitting wind-down transactions with these sanctioned entities and their subsidiaries through 12:01 am eastern daylight time on June 7, 2022. OFAC also amended General License 25, which authorizes all transactions ordinarily incident and necessary to the receipt or transmissions of telecommunications involving the Russian Federation, to exclude from this authorization transactions involving these three sanctioned television stations.


These new sanctions targeting Russia are the latest round of what has been a flurry of sanctions targeting Russia over the last two and a half months. U.S. companies and other entities engaged in accounting, trust and corporate formation, or management consulting services—whether or not such services are their primary business—should carefully assess the potential implications of these recent actions on their business in terms of the enforcement risks associated with providing such services to Russia. Non-U.S. companies conducting business with a nexus to the U.S. will have to make similar assessments, as well as consider the designation risks associated with provision of such services to Russia.

As U.S. and non-U.S. companies consider the evolving risks of conducting business in Russia, they should be aware that OFAC may make more determinations prohibiting additional categories of services from being exported to Russia under E.O. 14071. In addition, we can expect that the imposition of sanctions will be authorized against persons operating in additional sectors of Russia’s economy under E.O. 14024. Together with the sanctions imposed against Russia to date, including the designation of many, if not most, large Russian financial institutions as well as a number of state-owned entities in other sectors, country-wide restrictive U.S. export controls for many types of higher technology U.S. items (including software and technology), and the ban on new investment in Russia by U.S. persons, Russia is becoming a quasi-comprehensively sanctioned country for U.S. persons. U.S. sanctions against Russia will also be important for many entities and individuals who are not U.S. persons, as will the sanctions targeting Russia that allied nations of the United States have imposed.

We will continue to monitor sanctions that the U.S. government imposes on Russia and provide further updates as appropriate.