Latest US, UK Russian Sanctions Could Extend Blocking Measures to Hundreds More, Firm Says
Risk intelligence firm Kharon has found nearly 700 additional entities that may be subject to sanctions as a result of the more than 200 Russia-related designations announced by the U.S. and the U.K. earlier this month (see 2311020015 and 2311080031). The firm said the additional companies, located across more than 20 jurisdictions, are majority owned by the new U.S.- and U.K.-sanctioned targets but weren’t publicly named in the two governments’ announcements.
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The company’s findings highlight the importance of “looking beyond just those named actors” when doing sanctions due diligence on customers and suppliers, said Joshua Shrager, a senior vice president of Kharon. Speaking during a webinar hosted by the firm last week, he said this is especially important when trying to comply with the Treasury Department’s 50% rule, which extends blocking measures to any entity owned 50% or more by another sanctioned entity.
There is an “expansive and pervasive risk” associated with the majority-owned companies of sanctioned people that “now is incumbent on us to be aware of,” Shrager said.
Joe Barresi, a Kharon research manager, said the firm so far has identified 389 entities that are majority owned by the more than 200 sanctions targets included in the U.S announcement, which targeted various people and companies supplying Russia’s military, aiding its defense industrial complex or operating in various Russian financial, metals, government and procurement sectors (see 2311020015). Those entities are located across 14 jurisdictions, Barresi said, including China, Cyprus, Germany, the U.K. and even the U.S.
He pointed to Gleb Trotsenko, a person newly designated by the State Department for being part of a wealthy Russian family believed to be close to Russian President Vladimir Putin. Although the U.S. publicly named and sanctioned Trotsenko, it didn’t name several of the companies he owns, Barresi said, including U.K.-based Siberian Goldfields Limited, a company he acquired from his father, Roman Trotsenko, who has served as an adviser for at least one sanctioned Russian oligarch.
Earlier this year, Trotsenko also “established direct control” over NEO Metals Holding Limited, which “is the sole shareholder” of another company based in the Netherlands, Barresi said.
Barresi said Kharon also identified 270 entities that are majority owned by the 29 people and entities sanctioned by the U.K. Some of those entities, located across 22 jurisdictions, are in France, Germany, Cyprus, the Netherlands, the U.K. and the British Virgin Islands.
Among those designations was Francois Mauron, a Swiss national with ties to sanctioned energy company Paramount Energy and Commodities DMCC, which the U.K. said has illegally traded in Russian oil. Although the U.K. named that company in its sanctions announcement, it didn’t name other companies Mauron owns, Barresi said, including Singapore-based Interoil Trading Asia. He said Mauron also is the sole shareholder of Hong Kong-based Skyrich Trading and is “almost the sole shareholder” of Romania-based energy consulting company International Energy Personnel Consulting (IEPC).
All those companies have the potential of being subject to U.S. or U.K. sanctions requirements because of their ownership structure, Barresi and Shrager said.
“These are two [examples] of, you know, hundreds of more,” Shrager said of Trotsenko and Mauron. “Obviously, what we're all aware of is certainly the broad international risk associated with these entities.”