President Biden Bans Imports, Exports and New Investments in the Russian Federation
Commentary by Michael T. Gershberg
President Joseph R. Biden signed an Executive Order ("E.O.") prohibiting certain imports, exports and new investments between Russia and the United States. The new E.O. ("Executive Order on Prohibiting Certain Imports, Exports, and New Investment with Respect to Continued Russian Federation Aggression"), takes additional steps to expand the scope of the prohibitions contained in E.O. 14024 ("Blocking Property with Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation"), and E.O. 14039 ("Blocking Property With Respect to Certain Russian Energy Export Pipelines"), in response to continued Russian Federation aggression.
The new E.O. prohibits:
- the importation into the United States of fish, seafood, alcoholic beverages, non-industrial diamonds and other to-be-designated products of Russian Federation origin;
- the exportation, sale, or supply from the United States of luxury goods to any person located in the Russian Federation;
- new investments by any U.S. person in any sector of the Russian Federation economy to be designated by the U.S. Government;
- the exportation, sale or supply from the United States of U.S. dollar-denominated banknotes to the Government of the Russian Federation or any person located in the Russian Federation; and
- the approval, financing, or facilitation of a transaction by a foreign person that would be prohibited under this section if performed by a United States person.
Commentary
The Biden Administration continues to use a wide-range of economic tools to respond to Russia’s invasion of Ukraine, combining traditional sanctions with targeted import and export restrictions. The focus on exports of luxury items and U.S. banknotes suggests these measures are designed to exert additional pressure on Russian oligarchs, many of whom have already been sanctioned and seen their foreign assets frozen and their yachts seized. While the initial impact of this Executive Order is likely to be fairly limited, it leaves the door open for import/export restrictions on additional items in the future. As the web of trade restrictions on Russia becomes more complicated, U.S. exporters and importers should exercise caution and pay extra attention to legal compliance.
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