Sanctions Tracker – US Russia Sanctions Designations and Gold Transactions Guidance

On March 24, the United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) made a number of new Russia-related sanctions designations, including the designation as SDNs of several hundred members of the State Duma of the Federal Assembly of the Russian Federation (the “Duma”) who voted in favor of authorizing the commencement of the war in Ukraine, the designation of the Duma itself as an institution, and the designation of additional entities in the Russian defense sector.  A list of the newly designated entities is available here.  These designations coincide with President Biden’s diplomatic meetings in Europe and form part of a further set of Russia sanctions actions coordinated between the United States and its allies.

OFAC also released new guidance, in the form of a Frequently Asked Question 1,029, noting the sanctions risks of gold-related transactions involving the Russian Federation.  The guidance notes that existing US secondary sanctions authorize the Treasury Department to designate, as themselves sanctioned, persons who engage in deceptive or structured transactions to circumvent US sanctions, or who operate in the “financial services sector” of the Russian economy, or who conduct significant transactions with persons sanctioned under OFAC’s Russia sanctions authorities.  These provisions, the FAQ indicates, apply with full force to transactions involving gold or precious metals, as well as transactions involving US dollars or other currency.  US persons, the FAQ notes, are required to comply fully with US sanctions whether conducting business in dollars, gold, or other forms of value.

Consistent with recent statements of regulators on both sides of the Atlantic, US and European sanctions authorities are likely to devote significantly increased enforcement resources to Russia-related sanctions violations in the near and medium term; given the extensive nature of the recent Russia sanctions imposed by numerous jurisdictions, any company involved in Russia-related business should carefully review the sanctions compliance of its current and envisioned activities.

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