Sanctions updates / 24 Sep 2014

SANCTIONS UPDATE – The US Treasury and the US Department of Commerce (DOC) Introduced New Sanctions

On September 12, 2014, the US Treasury and the US Department of Commerce (DOC) introduced new sanctions under the sanctions program related to the situation in Ukraine. The latest sanctions expanded the scope of industries subject to restrictions and further limited access to capital for banks and energy companies controlled by or close to the Russian state.

The restrictions under new sectoral sanctions have been strengthened significantly. Entities previously on the sectoral sanctions list (SSI) – mainly banks with substantial state involvement – have been further limited in acquiring financing for new debt of longer than 30 days’ maturity (down from 90 days). Sberbank, the largest and most widespread bank in Russia, also became subject to this restriction. Additionally, a prohibition on dealing in debt of longer than 90 days’ maturity or new equity was applied to large state-controlled energy companies, including Transneft, Gazpromneft, Gazprom, as well as two key private companies in the energy sector – Lukoil and Surgutneftegaz.

Further, added to the list of entities with which U.S. persons (i.e. natural persons and legal entities) are prohibited from engaging in any transactions and which are subject to a freeze of assets for any property in the United States (SDN list) were the defense enterprises Almaz-Antey, Tikhomirov Research Institute of Instrument Design, Kalinin Machine Plant, Mytishchinski Machine-Building Plant, and Dolgoprudny Research Production Enterprise.

These five entities were also added to the DOC Entity List. Any attempted export of certain goods and technologies to entities on this list may not be performed without a license, to which the DOC imposes a presumption of denial. The restrictions apply to any technologies that have the potential to be used for oil or gas exploration or production in Russian deepwater, Arctic, or shale projects.

Additional information

Jarno Vanto (New York)
Ulla von Weissenberg (Finland)
Andrei Gusev (Russia)

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