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

We previously discussed Russia-related sanctions measures imposed by the United States on March 25, March 15, March 14, March 9, March 8, March 3, February 28, February 25, February 23, and February 4. We also discussed recent sanctions measures related to the Russian energy sector in a podcast episode.

This post provides an update regarding further Russia-related sanctions measures in the United States.

Designation of Alrosa as an SDN

On April 7, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated Public Joint Stock Company Alrosa (“Alrosa”) on its Specially Designated Nationals and Blocked Persons (“SDN”) List.

This means that all property and interests in property of Alrosa that are in the U.S. or in the possession or control of U.S. persons are blocked.  In addition, any entities that are owned, directly or indirectly, 50% or more by Alrosa are also blocked.  Furthermore, all transactions by U.S. persons or within (or transiting) the U.S. that involve any property or interests in property of Alrosa are prohibited unless authorized by a general or specific license issued by OFAC.

New General Licenses

On the same day, OFAC issued the following General Licenses (“GLs”):

• GL 9C supersedes and replaces the prior version of GL 9, and authorizes certain transactions in debt or equity of Alrosa (or any entity owned 50% or more by it) issued prior to April 6, 2022, until July 1, 2022. However, any divestment or transfer of, or facilitation of divestment or transfer of, Alrosa debt or equity must be to a non-U.S. person.
• GL 10C supersedes and replaces the prior version of GL 10, and authorizes certain transactions related to derivative contracts involving Alrosa, or any entity owned 50% or more by it, until July 1, 2022.
• GL 21A supersedes and replaces the prior version of GL 21, and authorizes a wind-down period for U.S. persons to engage in transactions involving Alrosa USA, Inc., or any entity owned 50% or more by it, until June 7, 2022.
• GL 24 authorizes a wind-down period for certain transactions involving Alrosa, or any entity owned 50% or more by it, until May 7, 2022.
• GL 25 authorizes certain transactions concerning the receipt or transmission of telecommunications involving Russia. It also authorizes the exportation or reexportation, sale, or supply, directly or indirectly, from the United States or by U.S. persons, wherever located, to Russia of services, software, hardware, or technology incident to the exchange of communications over the internet.

Additional SDN Designations

In addition to Alrosa, OFAC also redesignated Joint Stock Company United Shipbuilding Corporation (“USC”), as well as its subsidiaries and board members.  OFAC explained in its press release that “USC is a Russian SOE that develops and constructs the majority of the Russian military’s warships, likely including many of those used to bombard Ukraine’s cities and harm Ukraine’s citizens.”

According to the press release, the designations of Alrosa and USC are intended to “cut[] off additional sources of support and revenue for the Government of the Russian Federation . . . to wage its unprovoked war against Ukraine.”  The OFAC press release is available here.

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We will continue to monitor developments in this area and encourage you to subscribe to be kept informed of latest developments.  Please contact the authors or your usual Herbert Smith Freehills contacts for more information.