On April 6, 2018, the U.S. Department of the Treasury’s (“Treasury”) Office of Foreign Assets Control (“OFAC”), in consultation with the U.S. Department of State, designated three dozen Russian “oligarchs,” government officials, and related entities as specially designated nationals (“SDNs”).
All were designated under pre-existing Ukraine/Russia-related authorities provided by Executive Order (“E.O.”) 13661, relating to (among others) senior officials of the Government of the Russian Federation and their supporters, and E.O. 13662, relating to persons and entities operating in specified sectors of the Russian economy. Effective today, the newly designated persons and entities are included on OFAC’s list of SDNs (the “SDN List”). Treasury also designated the Russian state-owned arms export monopoly and a related financial institution as SDNs because of their activities relating to the Syrian conflict.
OFAC simultaneously released two general licenses, General Licenses 12 (“GL 12”) and 13 (“GL 13”), that authorize a two-month wind-down period for operations involving many of the specified entities and a one-month period to dispose of holdings in three of the new SDNs that are publicly listed companies. OFAC also released new Frequently Asked Questions related to both the designations and the general licenses.
NEWLY DESIGNATED ENTITIES
The list of newly designated Russian persons and entities, provided here as Annex A, includes:
Although each of the designated oligarchs was included in the list of oligarchs in the report issued under Section 241 of CAATSA,1 that was not itself the basis for designation (nor is this action necessarily an indication that others listed in the report will be sanctioned). Each was designated under pre-existing authorities, either for being or being a supporter of a senior Russian government official under E.O. 13661 or for being active in the Russian energy sector under E.O. 13662. The Treasury press release announcing the designations focused on these links, as well as various ties to Russian officials and alleged misdeeds. Thus, as predicted, while there is political pressure to sanction “oligarchs,” as with previous designations the actual listing of individuals is driven by the underlying sanctions authority and political considerations, not mere inclusion on the massive list of individuals created under Section 241.