Biden Administration Imposes Broad Sanctions and Export Controls in Response to Russia’s Invasion of Ukraine
Summary
• Sergei Sergeevich Ivanov, current CEO of Russian state-owned diamond mining company Alrosa and a board member of Gazprombank, and his father Sergei Borisovich Ivanov, Special Presidential Representative for Environmental Protection, Ecology, and Transport and reportedly one of Putin’s closest allies • Andrey Patrushev, who served in leadership roles at Gazprom Neft and is employed in Russia’s energy sector, and his father Nikolai Platonovich Patrushev, Secretary of the Russian Federation Security Council and a longtime close associate of Putin • Ivan Igorevich Sechin, reportedly a deputy head of a department at Rosneft, and his father Igor Ivanovich Sechin, CEO, Chairman of the Management Board, and Deputy Chairman of the Board of Directors of Rosneft • Alexander Aleksandrovich Vedyakhin, First Deputy Chairman of the Executive Board of Sberbank • Andrey Sergeyevich Puchkov, high-ranking VTB Bank executive with interests beyond VTB, including Moscow-based real estate companies LLC Atlant S and LLC Inspira Invest A, which have been designated for their ties to Puchkov • Yuriy Alekseyevich Soloviev, high-ranking VTB Bank executive, and his wife Galina Olegovna Ulyutina, who was designated for being the spouse of Soloviev BIS issued a rule that includes major new restrictions in the Export Administration Regulations (EAR), which the White House says will cut off more than half of Russia’s high-tech imports. The goal of these new restrictions is to deny Russia access to “high-tech imports, restricting Russia’s access to vital technological inputs, atrophying its industrial base, and undercutting Russia’s strategic ambitions to exert influence on the world stage.” First, the rule imposes a new license requirement for all exports, reexports, and transfers (in-country) of items covered by Export Control Classification Numbers (ECCNs) in Categories 3-9 of the Commerce Control List (CCL), including new controls on microelectronics, telecommunications items, sensors, navigation equipment, avionics, marine equipment, and civil aircraft components. Exports, reexports, and transfers of items for flight and maritime safety, humanitarian needs, government space cooperation, specified Western subsidiaries and joint ventures, companies headquartered in Country Groups A:5 and A:6 to support civil telecommunications infrastructure, and government-to-government activities will be subject to a case-by-case review to “minimize unintended consequences.” Third, the rule expands existing restrictions on Russian military end uses and military end users (MEU) to cover all items subject to the EAR, except for food and medicine designated as EAR99 and mass market items, as long as they are not for the Russian government end users or state-owned enterprises. The new measures provide an exception to the Russia and Russia-MEU FDP rules, along with the de minimus calculation rules, to certain partner countries that have adopted or plan to adopt similar measures (currently, Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, New Zealand, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom). Seventh, the rule makes changes to the EAR to implement the new embargo (with limited exceptions for food and medicine and certain software for Internet-based personal communications) on Russia’s Donetsk and Luhansk’s regions.