Feds Crack Down on Dealing With Russia

As a result of sanctions, Americans now have limited ability to do business with certain sectors of the Russian economy, which include Russia’s largest bank, Sberbank. With more than $1.2 billion dollars in civil penalties assessed in 2014, it’s clear the Department of Treasury’s Office of Foreign Assets Control takes these sanction programs seriously.

President Obama initiated sanctions in retaliation for Russia’s involvement in Ukraine through Executive Orders that blocked (froze) property of persons who have taken certain actions that undermine Ukraine, and certain Russian government officials and individuals who operate in Russia’s arms or materiel sector. Executive Order 13662 grants the Secretary of the Treasury, in consultation with the Secretary of State, the right to block certain persons who operate in whole sectors of the Russian economy, including financial services, energy, metals and mining, engineering, and defense.

President Obama expanded the sanctions related to the Ukrainian crisis in December of 2014 by issuing another executive order, extending sanctions to persons or companies doing business in Crimea. In addition to transactional prohibitions, the authority granted to the Secretary of State to name persons to the Specially Designated Nationals List is broad, and may result in a significant increase in the number of persons with whom U.S. persons cannot conduct business. Given the evolving nature of the sanctions, it is imperative that U.S. citizens, residents and companies conducting business internationally or with foreign nationals keep abreast of further developments.