UNITED STATES
On 20 March 2014 President Barak Obama signed a third Executive Order imposing potentially far reaching Ukraine / Russian sanctions against both US and non-US persons. The Order provides that US authorities reserve their rights to impose sanctions against any company that is determined to:
(i) operate in such sectors of the Russian Federation economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, such as financial services, energy, metals and mining, engineering, and defense and related materiel;
(ii) have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to this order; or
(iii) be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order.
The Order can be retrieved here.
The rationale is that US may identify any sector of the Russian economy as contributing towards the instability of the Ukraine and may then designate individual companies within that sector on the SDN list. This list can be found at https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx.
Previous US Executive Orders were issued on 6 and 17 March. Individuals targeted by US sanctions pursuant to these Orders can be found at https://www.whitehouse.gov/the-press-office/2014/03/17/fact-sheet-ukraine-related-sanctions.
Several Russian companies are now designed on the SDN list. A Russian bank, Bank Rossiya, has already been named, meaning that no US person can transact business with that bank, and that any foreign entity which does so must be concerned over whether that transaction will be deemed to be support of that bank. Gennady Timchenko, who reportedly controls the Gunvor Group, a major crude oil trader, has been designated, as have Arkady and Boris Rotenberg, reportedly co-owners of SGM Group, which provides construction services.
EUROPEAN UNION
On 24 March, EU added 12 persons on the sanction list pursuant to Council Implementing Regulation 381/2014. Names already appearing on EUs sanctions list can be found in Council Regulation No 208/2014 and 269/2014.
Members transacting business with companies in the Russian economic sector are encouraged to monitor developments closely and exercise due care to ensure the sanctions legislation is not violated. In particular, changes to the US SDN list should be monitored.
Member Alert is published by The Swedish Club as a service to members. While the information is believed correct, the Club cannot assume responsibility for completeness or accuracy.