It is reported that German Chancellor Angela Merkel and Finance Minister Olaf Scholz will meet members of the US administration later this month to seek exemptions for German companies from the recent US sanctions on Russia, in which a number of Russian oligarchs, government officials and entities were added to the SDN list (previous blog here). Non-US persons can be liable for knowingly facilitating “significant transactions” for or on behalf of the individuals and entities sanctioned.
In light of the US imposing sanctions on a number of Russian oligarchs, government officials and entities (previous blog), the Russian Parliament was presented last week (13 April) with Draft Bill No. 441399-7 “On Measures (Countermeasures) in Response to Unfriendly Actions of the USA and (or) other Foreign States” (foreign states being those that have followed the decisions of the US on the adoption of Russia-related financial sanctions). The Draft Bill provides for the following measures (inter alia):
1. Prohibition/restriction on the import into Russia of agricultural products, raw materials and food products, alcohol and tobacco products, and some medicinal products, originating from the US and/or other foreign states;
2. Termination/suspension of international cooperation between Russia and the US and/or other foreign states* in the sectors of nuclear power, rocket and propulsion, and aircraft production;
3. Travel bans on US and/or other foreign persons working on the development and implementation of policy and legal actions in respect of the Russian Federation;
4. Prohibition/restriction on US and/or other foreign technological equipment and software for Russian state and municipal needs;
5. Prohibition/restriction on the provision of consulting, audit and legal services by entities under the jurisdiction of the US and/or other foreign states* for Russian state and municipal needs;
6. Prohibition/restriction on the participation in privatisations for US persons and/or persons of other foreign states*;
7. Prohibition/restriction on the provision of services related to the sale of public property owned by Russia by entities under the jurisdiction of the US and/or other foreign states*;
8. Exhaustion of the exclusive right to trademarks owned by US and/or other foreign states* in respect of certain goods;
9. Prohibition/restriction on the employment in Russia of citizens of the US and/or other foreign states, including highly qualified experts; and
10. Prohibition/restriction on the import of any other goods originating from the US and/or other foreign states (relevant list to be drawn up by the Russian Government).
The Russian Parliament is due to consider the Draft Bill on 24 April.
*including entities that are more than 25% directly or indirectly owned by entities under the jurisdiction of the US and/or other foreign states
There were announcements last weekend that the US would impose further sanctions this week on Russians said to have assisted Syria with chemical weapons (see eg 15 April 2018 statement by the US ambassador to the UN, Nikki Haley). However, yesterday (16 April) the White House press briefing said new measures were currently being evaluated, but that there was “nothing to announce right now” and reports suggest that President Trump has told national security advisers that he is uncomfortable imposing the planned new sanctions without another “triggering event” by Russia.
Ukraine’s President Petro Poroshenko has announced that draft measures are currently being prepared to align sanctions “as much as possible” with the recent US decision to designate a number of Russian oligarchs, government officials and entities (asset freezes and travels bans imposed) (previous blog here).
President Poroshenko has also announced that “to change the behaviour of Russia, it is necessary to ensure the maximum effect on sanctions”, which “is only possible if the European Union follows the example of the United States and the whole world synchronizes sanctions with them, especially in the financial sphere”.
Russia’s Prime Minister Dmitry Medvedev has announced that his government will be considering a number of measures to support companies affected by the recent US sanctions imposed on a number of Russian oligarchs, government officials and entities for their alleged involvement in global “malign activity” (see previous blog here). He also announced that draft proposals for retaliatory measures would be drawn up.
Today, OFAC has designated a number of Russian individuals and entities (asset freezes and travel bans imposed) on the basis that they have been involved in a range of “malign activity around the globe”. The designations include:
- 7 Russian oligarchs – Vladimir Bogdanov, Oleg Deripaska, Suleiman Kerimov, Igor Rotenberg, Kirill Shamalov, Andrei Skoch, and Viktor Vekselberg – as well as 12 companies owned or controlled by them;
- 17 Russian government officials; and
- The Russian state-owned weapons trading company Rosoboroneksport, and its Russian subsidiary bank, Russian Financial Corporation Bank (Russia-Syria related designations).
The Russian oligarchs and government officials sanctioned today follow the US Treasury’s CAATSA Section 241 Report, issued in late January 2018 (see previous blog here). That Report identified 114 “senior foreign political figures” and 96 “oligarchs” in the Russian Federation (determined by their “closeness to the Russian regime and their net worth”).
Non-US persons may be liable for knowingly facilitating “significant transactions” for or on behalf of the individuals and entities sanctioned today.
OFAC has also issued 2 general licences to “minimize immediate disruptions to U.S. persons, partners, and allies”, see General Licences 12 and 13, as well as related FAQs. Links to the OFAC Notice and US Treasury press release.
We previously reported that in response to the recent nerve agent attack on Sergei and Yulia Skripal, the UK had expelled 23 “undeclared [Russian] intelligence officers” (here), and that Russia had responded by (inter alia) expelling 23 diplomats from the UK Embassy in Moscow (see blog here). Since then, over 150 Russian intelligence officers have been expelled from more than 20 countries (see blog here). The US expelled 60 Russian intelligence officers and closed the Russian consulate in Seattle.
In response, Russia has imposed a number of retaliatory measures. Russia announced that 58 diplomatic staff at the US Embassy in Moscow and 2 employees at the US Consulate General in Yekaterinburg have been declared ‘persona non grata’ for “activities incompatible with their diplomatic status”. The agreement to open the US Consulate General in St Petersburg has been revoked. The White House has issued a press release stating that “Russia’s response was not unanticipated, and [that the US] will deal with it”. Russia has announced that it has declared ‘persona non grata’ the diplomats from 23 other countries “in response to their unjustified expulsions of Russian diplomats”. It also announced that Britain “must equalise, within a month, the total number of employees at the UK embassy in Moscow and the UK consulates in Russia with the number of Russian diplomats and administrative and technical workers who are on long-term tours of duty to the UK by making relevant cuts in their staffs”.
The US is expelling 60 Russian intelligence officers in retaliation for the Salisbury poisoning, in order to reduce Russia’s ability to “spy on Americans” and show Russia that “its actions have consequences” (see White House statements here and here). 48 are based at the Russian mission to the USA and 12 at the UN mission in New York. The US has also closed the Russian consulate in Seattle. Russia has said it will retaliate.
The European Council has said that 14 EU member states had decided to expel Russian diplomats after the UK expelled 23. So far Germany, France and Poland have said they will expel 4, Lithuania & the Czech 3, and Denmark, Italy and the Netherlands 2. Ukraine will expel 13 Russian diplomats and Canada 4. The EU has said that “additional measures, including further expulsions within this common EU framework are not to be excluded in the coming days and weeks.”
New Zealand has announced that it will be imposing travel restrictions on all the individuals that are expelled by other countries (New Zealand made no actual expulsions, as its government had declared that there were no individuals who fell into the profile of ‘undeclared Russian intelligence agent’).
Meanwhile, the UK House of Commons Foreign Affairs Committee is to examine whether and how the UK can impose further financial sanctions on Russian money in British tax havens.