Sanctions Update

On December 19, 2014, President Obama issued a new Executive Order ("E.O.") "blocking property of certain persons and prohibiting certain transactions with respect to the Crimea region of Ukraine." Specifically, the E.O. prohibits new investments in Crimea and the trade of goods, technology or services with Crimea. (See White House Press Release.) Additionally, the E.O. authorizes the Department of Treasury to impose sanctions on: 1) individuals and entities operating in Crimea; 2) the leaders of entities operating in Crimea; 3) entities owned or controlled by persons operating in Crimea; and 4) individuals and entities providing material support to persons designated under the E.O. The Office of Foreign Assets Control ("OFAC") also issued a General License to authorize the sale of agricultural commodities, medicine, and medical supplies to Crimea.

Also on December 19, the Department of Treasury's Specially Designated National ("SDN") list (described further below), was amended to include an additional "24 Ukrainian and Russian separatist leaders, a financier, and the militias or entities they lead" pursuant to E.O. 13660. (See Treasury Press Release and SDN Amendments.) Of the 24 designated persons, 16 have previously been sanctioned by the EU, UK and/or Canada between March and September 2014. Notable individuals on the designation list include Igor Plotnitsky (an ex-Soviet army officer, "elected" head of the so-called Luhansk People's Republic); Konstantin Malofeyev (owner of Marshall Capital Fund and financier for separatist activities in eastern Ukraine); and Igor Bezler (a former Russian military officer who has actively coordinated subversion activities in Ukrainian territory). While the United States continues to implement measures designed to impose costs on Russia's perceived meddling in Ukraine, Treasury also expressed that if Russia "implements its commitments and abides by international law, sanctions could be rolled back." (See Treasury Press Release.)

Both actions taken on December 19 were designed to complement similar measures adopted by the European Union, which took effect on December 20. Specifically, European Council Regulation No. 1351/2014 broadens the investment restrictions in Crimea and Sevastopol. It also introduces new product controls and a ban on certain services meant to target tourism activities, sectors of the economy and key sector infrastructure.

Finally, also on December 19, Canada imposed a new round of sanctions against the Russian oil and extractive sector and designated 20 Russian and Ukrainian individuals. A complete list of individuals and entities subject to U.S., EU, UK and Canadian Ukraine- and Russia-related sanctions is available here.