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US Issues Hundreds of New Russia-Related Sanctions, Entity Listings

February 26, 2024 by Ian Cohen|Top News

The U.S. announced a new set of sweeping Russia-related export controls and sanctions last week to mark the two-year anniversary of Moscow’s invasion of Ukraine and to respond to Russian opposition figure Alexei Navalny's death in prison. The measures include nearly 100 additions to the Commerce Department’s Entity List, more than 500 sanctions designations by the Treasury and State departments and new government guidance, including a new business advisory to warn companies about Russia-related compliance risks.

The Biden administration said the measures represent the largest single tranche of designations since Russia began the war in 2022. The U.S. must “stand strong with Ukraine and stand united with our allies and partners,” President Joe Biden said. “If [President Vladimir] Putin does not pay the price for his death and destruction, he will keep going.”

The Entity List additions, effective Feb. 23, target entities in Russia, China, India, Kyrgyzstan, South Korea, Turkey and the United Arab Emirates for supporting Russia’s defense industrial base, including by illegally shipping U.S. goods to Russia. The Bureau of Industry and Security designated more than 50 of the entities as Russian-Belarusian military end users, and the new entities will be subject to a license requirement for all items subject to the Export Administration Regulations. Licenses will be reviewed either under a policy of denial or presumption of denial, while some applications for food and medicine designated as EAR99 will be reviewed on a case-by-case basis.

BIS has now placed more than 900 parties on the Entity List for supporting Russia’s war, said Matthew Axelrod, the agency’s top export enforcement official. “Two years in, our work is far from done,” he said. “So we continue in our unceasing efforts to hold accountable both Russia and those who support its brutal war.”

The new financial sanctions target Russian government officials connected to Navalny’s death; more than two dozen sanctions evaders in Europe, East Asia, Central Asia and the Middle East; hundreds of companies with ties to Russia’s military-industrial base; parties helping Russia earn revenue from energy sales, and more. The Office of Foreign Assets Control also issued several new general licenses to authorize certain transactions with newly blocked entities and vessels.

Along with the new restrictions, the U.S., the EU, the U.K. and Japan expanded their list of common high-priority items Russia is seeking to import to now include several new goods, including certain “computer numerically controlled” machine tools. A joint statement from the four allies said they continue to share trade data to counter Russia sanctions evasion and “have built lasting relationships that will shape the future of export controls.”

“While export controls have not stopped Russia from its determination to subjugate its neighbor,” BIS said, “they have slowed its progress and emphasized the collective belief that our most sensitive technologies must only be focused on peaceful endeavors.”

BIS added 93 entities to its Entity List, with 63 based in Russia. Many of the additions are technology companies or businesses working in industrial, logistics, electronics and aviation sectors or involved in scientific research. The agency said some entities illegally sent export-controlled U.S. technology and other items to Russia, including “radiation-hardened parts,” microelectronics, machine tools, electronics test equipment, machine tool spare parts and other “sensitive electronic components.” Others were added for trying to transship U.S. goods to Iran as well as Russia.

All exports that now require a license as a result of the Entity List rule but were aboard a carrier to a port as of Feb. 23 may proceed to their destinations under the previous eligibility as long as the items are exported before March 25, BIS said. Any items not exported before midnight March 25 will require a license.

BIS Undersecretary Alan Estevez said the agency will continue working with allies to “tighten and enforce our restrictions, which will continue to limit Putin’s military options by imposing substantial costs on his ability to repair, replenish, and rearm with high-tech, high-quality equipment.”

The hundreds of new financial sanctions issued by the Treasury and State departments target people and companies both within Russia and around the world for supporting the country’s government and military and helping it evade Western trade controls. Among those designated are prison officials connected to the death of Navalny; more than 250 people and entities trying to circumvent sanctions and boost Russia’s metals and mining production; people responsible for deporting Ukrainian children and various Russian state-owned companies.

One set of sanctions targets a network of companies and officials helping to finance and transfer Iranian-made drones to Russia, while others target Russia-based weapons producers, 3-D printing companies, industrial equipment manufacturers, investment firms, software development businesses, aircraft parts suppliers, logistics companies and more. Treasury notably sanctioned at least six China-based companies for illegally shipping microelectronics, optical laboratory accessories and other technology equipment to Russia.

OFAC issued four new general licenses:

A new business advisory published by the State Department stresses that companies risk “severe civil and criminal penalties” by continuing to do business in Russia and “navigating the raft of economic sanctions, export controls, and import restrictions.” Although those risks can be “mitigated by rigorous due diligence,” the agency said “substantial risk is likely to remain.”

The advisory includes an overview of the various export controls and sanctions that businesses need to comply with and encourages companies to regularly audit or investigate their counterparties' “legitimacy and compliance with applicable laws and regulations.” It also warned that companies operating in Russia are subject to Russian laws that may violate U.S. trade restrictions, including requirements to seek approvals from the country’s government for certain business activities and investments.

The sanctions were announced the same day a delegation of U.S. senators traveled to Ukraine to meet with President Volodymyr Zelenskyy. One member of the delegation, Richard Blumenthal, D-Conn., said sanctions are "key" to the U.S. strategy against Russia, including "more effective enforcement of existing measures & new ones." In a post on social media platform X, Blumenthal said Zelenskyy is "ready & willing to help my Permanent Subcommittee on Investigations in exposing how American parts & components reach Russian weapons manufacturers."

Senate Majority Leader Chuck Schumer of New York, who was also part of the delegation, used the trip to advocate for more military aid for Ukraine. "We have come here to tell the Ukrainian people: We are with you. The United States is with you," he said during a Feb. 23 news conference. "We will fight and fight and fight to get this needed aid to you and to your brave soldiers."

Zelenskyy said in a Feb. 23 post on X that he is "grateful to the United States for imposing the largest single package of sanctions against Russia," suggesting more should be done. "Putin does not value human lives, but he does value money," he said. "And the only thing he fears is the free world’s bold decisions. We must deprive Putin’s Russia of all means and maximize the sanctions pressure so that Moscow can no longer finance its war."

Senate Banking Committee Chairman Sherrod Brown, D-Ohio, said “the United States and the West must continue to hold the lawless Russian regime accountable. We must use every tool to protect U.S. national security and stand with our allies.”

Sen. Lindsey Graham, R-S.C., said the new sanctions don't go far enough. “The strongest way to send a signal to the world that Russia is a pariah is to designate Russia as a state sponsor of terrorism under U.S. law, like Iran, Cuba, Syria, and North Korea,” he said in a post on X. “This designation is something Russia detests, Ukraine supports, and would make a difference.” It “would allow victims of Putin’s Russia to use U.S. courts to seek justice.”