OFAC Sanctions Multiple Entities to Impede Russian Access to Battlefield Supplies and Target Revenue Generators

On July 20, 2023, the United States Department of the Treasury’s Office of Foreign Assets control (“OFAC”) sanctioned multiple entities and issued general licenses to further implement the commitments made by the G7 Leaders in February and May 2023 by inhibiting Russia’s access to products that support its military and war efforts, reducing Russia’s revenue from the metals and mining sector, undermining its future energy capabilities, degrading Russia’s access to the international financial system, and reducing Russia’s access to G7-produced technology needed for its technology, aerospace, and defense sectors.

International Financial System

OFAC imposed sanctions against multiple additional Russia-based financial institutions to further degrade the Russian Federation’s ability to maintain access to the global financial system. Pursant to E.O. 14024, OFAC designated Joint Stock Company Locko Bank, Joint Stock Company Petersburg Social Commercial Bank, Joint Stock Company Commercial Bank Solidarnost, JSC Tinkoff Bank, Unistream Commercial Bank JSC, and the Fund for Development of Energy Complex Energy. OFAC also designated multiple entities operating in Russia’s metal and mining industries as well as entities manufacturing equipment and chemicals for Russia’s energy industry.

Dual-Use Technology

OFAC highlighted the fact that Russian entities commonly import foreign-made electronics and technology through the use of third-parties intermediaries and transshipment points outside of Russia, and various Kyrgyz entities have been frequent exporters of controlled electronics components and other technology to Russia. OFAC designated multiple entities involved in both the importation of and the exportation of foreign dual-use technology as well as entities involved in trading foreign semiconductors in an effort to reduce Russia’s access to these foreign-made electronics and technology.

Entities Supporting Russia’s Defense Sector

OFAC further designated multiple entities that directly support Russia’s war against Ukraine under E.O. 14024 for operating or having operated in the defense and related materiel sector of the Russian Federation economy, along with multiple entities operating in the aerospace and technology sectors of the Russian Federal economy. OFAC also targeted entities in key industries including quantum technologies, advanced computing, and the research and development of high-technology goods.

General Licenses

Along with the designation of the above-mentioned entities, OFAC issued two new general licenses that authorize various transactions with certain newly-designated entities through 12:01 a.m. eastern daylight time, October 18, 2023. General License No. 70 authorizes the wind down of transactions involving Joint Stock Company Ural Mining and Metallurgical Company, and General License No. 71 authorizes the wind down and rejection of transactions involving Joint Stock Company Petersburg Social Commercial Bank, Joint Stock Company Locko Bank, Unistream Commercial Bank JSC, Joint Stock Company Commercial Bank Solidarnost, JSC Tinkoff Bank, or any entity in which one or more of these entities own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.

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