Sanctions Tracker – Further U.S. Responses to the Conflict in Ukraine

We previously discussed sanctions measures that have been enacted in several jurisdictions as a response to the conflict in Ukraine on February 4, February 23, February 25, February 28, March 3, March 7, and March 8. This post provides an update regarding further Russia-related sanctions measures in the United States.

Issuance of New Russia-Related Executive Order and General License

On March 8, 2022, President Biden issued an Executive Order (the “E.O. of March 8, 2022”) targeting the importation of Russian oil, liquefied natural gas, and coal to the United States. Specifically, the E.O. of March 8, 2022 prohibits the following activities:

• The importation into the United States of crude oil; petroleum; petroleum fuels, oils, and products of their distillation; liquefied natural gas; coal; and coal products of Russian origin;
• New investment in the Russian energy sector by a U.S. person, wherever located; and
• Any approval, financing, facilitation, or guarantee by a U.S. person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by the Executive Order, if performed by a U.S. person or within the United States.

In conjunction with the E.O. of March 8, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued General License (“GL”) 16, which authorizes all transactions prohibited by the E.O. of March 8, 2022 through April 22, 2022, that are ordinarily incident and necessary to the importation of crude oil; petroleum; petroleum fuels, oils, and products of their distillation; liquefied natural gas; coal; and coal products of Russian origin pursuant to written contracts or written agreements entered prior to March 8, 2022.

Additional Guidance and Clarifications Pertaining to the E.O. of March 8, 2022

OFAC also issued substantial guidance related to the sanctions measures imposed by the E.O. of March 8, 2022. In particular, OFAC updated two existing Frequently Asked Questions (“FAQs”), and issued the following new FAQs:

• FAQ 1,013 clarifies the activities prohibited by the E.O. of March 8, 2022.
• FAQ 1,014 clarifies that not all energy imports from Russia are prohibited by the E.O. of March 8, 2022. Rather, the only imports prohibited are crude oil; petroleum; petroleum fuels, oils, and products of their distillation; liquefied natural gas; coal; and coal products of Russian origin. The E.O. of March 8, 2022 does not prohibit imports of other forms of Russian origin energy, nor imports of non-Russian origin, even if such items transit through or depart from Russia.
• FAQ 1,015 clarifies the authorizations in GL 16. It also clarifies that the E.O. of March 8, 2022 does not prohibit transactions such as the unwinding of contracts or other business-related activities by U.S. persons to comply with the import ban, and does not prohibit U.S. persons from engaging in transactions to sell or re-direct shipments that were laden on or after March 8, 2022 and previously destined for the United States.
• FAQ 1,016 clarifies that if U.S. persons have a shipment of a product or products listed in the E.O. of March 8, 2022 en route to the United States that was contracted prior to March 8, 2022, the E.O. of March 8, 2022 does not prohibit U.S. persons from engaging in transactions to sell or re-direct shipments that were previously destined to the United States, and GL 16 authorizes the limited import of such items pursuant to pre-existing written contracts or written agreements through April 22, 2022.
• FAQ 1,017 clarifies that GL 8A, which authorizes certain transactions “related to energy” involving specified Russian financial institutions, remains in effect until June 24, 2022, unless renewed. However, GL 8A does not authorize any transactions prohibited by the E.O. of March 8, 2022.
• FAQ 1,018 clarifies that while the E.O. of March 8, 2022 prohibits the importation of specified products of Russian origin into the United States, to the extent the import of such products outside of the United States does not involve a sanctioned person or an otherwise prohibited transaction, non-U.S. persons are not exposed to sanctions under the E.O. of March 8, 2022.
• FAQ 1,019 clarifies the meaning of the terms “Russian Federation origin” and “new investment in the energy sector in the Russian Federation” as used in the E.O. of March 8, 2022.
• FAQ 1,020 clarifies that the E.O. of March 8, 2022 does not prohibit dealing in crude oil of the Caspian Pipeline Consortium (“CPC”) because distribution systems such as those within the CPC can segregate various sources of crude oil, allowing crude oil that is not of Russian Federation origin to be marketed and loaded separately.

OFAC described President Biden’s ban on the import of Russian oil, liquefied natural gas, and coal to the United States as “a significant action with widespread bipartisan support that will further deprive President Putin of the economic resources he uses to continue his needless war of choice.” The press release is available here.

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