On June 20, 2017, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) sanctioned 38 Russian and Ukrainian individuals and entities as Specially Designated Nationals (SDNs). The newly sanctioned parties include Ukrainian separatists and their supporters, persons and entities operating in Crimea, and Russian governmental officials supportive of the Russian arms industry or the annexation of Crimea. OFAC also added 20 subsidiaries of Transneft to the sectoral sanctions identification list. This action is notable as one of the Trump Administration's first significant additions to the Russia sanctions, underscoring U.S. commitment to the sanctions program in response to the situation in Ukraine.

The new round of designations is based on previous Obama-era Executive Orders authorizing sanctions on persons threatening the territorial integrity of Ukraine, persons operating in Crimea, the Russian arms sector, and Russian governmental officials. U.S. persons are forbidden from engaging in transactions with SDNs, and they must freeze any SDN’s property or interests in property that are in their possession.

This action by OFAC comes at a time of political uncertainty regarding the Trump Administration’s position on Russian sanctions. However, the sanctions – which were issued the same day that President Trump met with Ukrainian President Petro Poroshenko – are a clear signal that the Trump Administration supports the continuation of the Russia sanctions program. A Treasury Department press release stated that “U.S. sanctions on Russia related to the situation in eastern Ukraine will remain in place until Russia fully honors its obligations under the Minsk Agreements. U.S. sanctions related to Crimea will not be lifted until Russia ends its occupation of the peninsula.” Treasury Secretary Steven Mnuchin stated that the Trump administration was “committed to a diplomatic process that guarantees Ukrainian sovereignty” and that “these designations will maintain pressure on Russia to work toward a diplomatic solution.”

Additionally, the Senate recently passed an Iran/Russia sanctions bill by a 97-2 vote. The bill contains new sanctions against Russia based on human rights violations and interference in the 2016 U.S. election. The Senate bill would also codify sanctions imposed by President Obama under Executive Order and greatly expand the restrictions to other industries, including stricter sanctions against the Russian energy sector. Certain of these sanctions provisions would be mandatory, preventing unilateral waiver, modification, or relaxation by the President. While Presidents generally do not prefer to have their hands tied on matters affecting national security and diplomacy, the significant bilateral support for the bill may influence President Trump to sign the bill if it passes the House of Representatives (or set up a potential Congressional override if he vetoes the bill). However, there are also reports that the White House is seeking to have the House weaken the Senate version of the bill, and just today the House Ways and Means Committee stopped consideration of the bill on procedural grounds. 

Despite Donald Trump’s apparent past interest in revising the Russia sanctions program, these actions by OFAC indicate that the Trump administration is currently planning to stay the course set by the Obama administration in enacting and maintaining tough sanctions on Russia in response to its actions in Ukraine and cyber-activities.

In the EU meanwhile, on June 19, 2017, the EU extended its current Crimea sanctions until June 23, 2018. The sanctions cover imports and exports, investment, and tourism services relating to Crimea and Sevastopol, and effectively restrict EU companies from engaging in trade there. It is widely expected that the EU sanctions against Russia, which are currently due to expire on July 31, 2017, will soon be extended as well.