Overview of United States’ sanctions on Russian individuals, entities, and vessels.

U.S. businesses should be aware that the United States imposed sanctions on Russian persons (individuals, entities, and vessels), citing Russia’s annexation of Crimea, the invasion of eastern Ukraine, election interference, malicious cyber-enabled activities, human rights abuses, use of a chemical weapon, weapons proliferation, illicit trade with North Korea, and support to Syria. While U.S. companies and individuals can lawfully engage in a broad range of business activities involving Russia that are not subject to sanctions, penalties for violating U.S. sanctions can be severe. Therefore, American companies are advised to familiarize themselves with potentially applicable sanctions and to conduct thorough due diligence to ascertain whether a particular type of business activity or particular customers, clients, suppliers or partners may be subject to sanctions.

The Consolidated Screening List can be a helpful tool for due diligence efforts. The Screening List is a web-based platform, which consolidates eleven separate export screening lists of the Departments of Commerce, State, and the Treasury into a single list of parties for which the U.S. government maintains restrictions on certain exports, reexports, sanctions, and transfers of items. Companies can search the list by entity name, country, and other criteria to help ascertain whether potential transaction parties might be subject to export restrictions or other sanctions. The U.S. Department of the Treasury maintains a resource center with comprehensive information regarding Russia-related sanctions, particularly those pertaining to Ukraine. Sanctions against Russian persons may include blocking of assets subject to U.S. jurisdiction; limits on access to the U.S. financial system, including limiting or prohibiting transactions involving U.S. individuals and businesses; and denial of entry into the United States. The United States also tightly controls exports to Russia’s energy and defense sectors.

Most of the current U.S. sanctions are in response to Russia’s 2014 invasion and annexation of Ukraine’s Crimea region and Russia’s fostering of conflict in eastern Ukraine. The basis for Ukraine-related sanctions is a series of Executive Orders (EOs 13660, 13661, 13662, and 13685) that were issued in 2014 and codified by the Countering Russian Influence in Europe and Eurasia Act of 2017 (CRIEEA), a part of the broader “Countering America’s Adversaries Through Sanctions Act” (CAATSA). These Executive Orders provide for sanctions against those that the President determines have undermined Ukraine’s security and stability, misappropriated Ukrainian state assets, or conducted business, trade, or investment in occupied Crimea. They also provide for sanctions against any Russian government officials and those who offer them support, persons who operate in the Russian arms sector, and persons who operate in key sectors of the Russian economy.

Sectoral sanctions apply to specific entities in Russia’s financial, energy, and defense sectors. U.S. persons are restricted from engaging in specific transactions with these entities. Restrictions apply to new equity investment and financing for entities in Russia’s financial sector; and new financing for identified entities in Russia’s energy and defense sectors. Sectoral sanctions also prohibit U.S. trade related to the development of Russian deep-water, Arctic offshore, or shale projects that have the potential to produce oil and, as amended by CRIEEA, such projects worldwide in which those entities have an ownership interest of at least 33 percent or a majority of voting interests.

In addition to Ukraine-related sanctions, the United States maintains certain sanctions in response to malicious cyber activities, under EO 13694, as amended by EO 13757 (and codified by CRIEEA). These measures target Russian individuals and entities that have engaged in cyberattacks against critical infrastructure, for financial or commercial gain, to significantly disrupt the availability of computers or networks, or for the purpose of interfering with U.S. election processes and institutions. CRIEEA, at Section 224, enlarged the scope of cyber-related activities subject to sanctions to include a range of activities conducted on behalf of the Russian government that undermine “cybersecurity against any person, including a democratic institution, or government.”

The Sergei Magnitsky Rule of Law Accountability Act of 2012 (22 U.S.C. 5811 note) requires the President to impose sanctions on persons he finds to have been involved in either a “criminal conspiracy” uncovered by the Russian lawyer Sergei Magnitsky or in his subsequent imprisonment and death. The act also requires the President to impose sanctions on those he finds to have committed human rights abuses against individuals who are fighting to expose the illegal activity of Russian government officials or seeking internationally recognized human rights and freedoms.

The Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014, as amended (SSIDES; 22 U.S.C. 8901 et seq.), requires sanctions on those responsible for serious human rights abuses in “any territory forcibly occupied or otherwise controlled” by the Russian government. In November 2018, the U.S. Administration designated three persons for human rights abuses in the Russian-occupied regions of Ukraine.

In August 2018, the United States determined that Russia used a chemical weapon in violation of international law in the March 2018 nerve agent attack on a British citizen and his daughter. This finding triggered the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW Act, 22 U.S.C. 5601 et seq.). The CBW Act requires the President to terminate most foreign aid, arms sales, export licenses for controlled goods and services, and government-backed financial assistance. A second round of CBW sanctions, announced in August 2019 entails prohibition on U.S. banks’ participation in the primary market for non-ruble denominated bonds issued by Russia and lending to the Russian government/sovereign; U.S. opposition to the extension of any loan or financial or technical assistance to Russia by international financial institutions; and the tightening of restrictions on the export of certain products subject to restrictions administered by the Department of Commerce’s Bureau of Industry and Security.

A number of Russian defense-industry entities, including state-owned arms exporter Rosoboronexport, are denied most U.S. government contracts, export licenses, and trade in U.S. Munitions List-controlled items pursuant to the Iran, North Korea, and Syria Nonproliferation Act, as amended (INKSNA, 50 U.S.C. 1701 note).