OFAC Sanctions Nearly 300 Persons for Supporting Russia’s Military-Industrial Base

On May 1, 2024, the Office of Foreign Assets Control of the United States Treasury Department (“OFAC”) designated nearly 300 individuals and entities on its Specially Designated National and Blocked Person (“SDN”) list for their role in assisting “Russia’s ability to sustain its war machine.” According to a press release, these designations targeted “Russia’s military-industrial base and chemical and biological weapons programs as well as companies and individuals in third countries that help Russia acquire key inputs for weapons or defense-related production.”

SDN Designations

Below is a summary of the designated individuals and entities.

• Facilitators of Sanctions Evasion. OFAC designated nearly 60 individuals and entities located in Azerbaijan, Belgium, China, Russia, Slovakia, Türkiye, and the United Arab Emirates, which “help facilitate Russia’s acquisition of technology and equipment for its war machine.” These entities include, inter alia, Russia-based “sanctioned goods” procurement agents, a Russian unmanned aerial vehicle procurement network, China- and Hong Kong-based technology suppliers, Chinese companies that provide support to Russian defense entities, Belgium- and Türkiye-based machine tool procurement networks, Hong Kong-, Slovakia-, and UAE-based electronics procurement networks, and a Türkiye-based electronics supplier. A description of each relevant individual and entity is available on Annex 1.
• Russian Military-Industrial Entities. OFAC designated more than 100 entities that operate in, or have operated in, the technology, defense and related materiel, manufacturing, or transportation sectors of the Russian economy. A description of each relevant entity is available on Annex 2.
• Suppliers of Explosives Precursors. OFAC designated 14 suppliers of cotton cellulose and its highly flammable byproduct, nitrocellulose. OFAC noted that these chemicals “are key explosives precursors that Russia needs to keep producing gunpowder, rocket propellants, and other explosives.” The designated entities include major Russian importers of cotton cellulose, nitrocellulose, and key inputs to nitrocellulose, as well as two China-based suppliers that send these substances to Russia. A description of each relevant entity is available on Annex 3.
• Russian Procurers of Chemical and Biological Weapons. OFAC designated three Russia-based entities and two individuals involved in procuring items for military institutes involved in Russia’s chemical and biological weapons programs. A description of each relevant entity is available on Annex 4. OFAC also noted that the Department of State separately designated three Russian government entities associated with Russia’s chemical and biological weapons programs and four Russian companies contributing to such entities, pursuant to the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991.
• Facilitators of Russian Natural Gas-Related Construction Projects. OFAC designed two Russia-based entities involved in natural gas-related construction projects. These entities were designated pursuant to E.O. 14024 for operating or having operated in the construction sector of the Russian economy.

Notably, OFAC emphasized that “[f]oreign financial institutions that conduct or facilitate significant transactions, or provide any service, involving Russia’s military-industrial base . . . run the risk of being sanctioned by OFAC.”

As a result of these designations, all property and interests in property of these SDNs that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50% or more by one or more of these SDNs are also blocked. Furthermore, non-U.S. persons could risk secondary sanctions liability by engaging in certain transactions with these SDNS.

General Licenses

On the same day, OFAC issued the following three general licenses (“GLs”).

• GL 95 authorizes certain civil aviation safety and wind-down transactions involving one SDN through July 30, 2024.
• GL 96 authorizes limited safety and environmental transactions involving certain sanctioned persons and/or vessels, through July 30, 2024.
• GL 97 authorizes a wind-down period for transactions involving certain SDNs through June 17, 2024.

Despite the substantial number of new designations, it is possible that a transaction involving one of the newly designated SDNs could be temporarily authorized by a GL. Accordingly, companies seeking to wind-down pre-existing activities with one or more of these newly designated SDNs should confirm whether such wind-down activities would be authorized by one of the aforementioned GLs or other OFAC authorization.

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