top of page

New Sanctions against Russia

Updated: Apr 20, 2021

Today (April 15, 2021) was marked by a series of new sanctions against Russia. The United States, among other things, added a new sanction authority to the already-complex set of sanctions against Russia. As a result, put this short note together to introduce the new measures followed by a brief analysis about whether these new sanctions changed the situation drastically or not.

Presidential Action

The President issued an Executive Order on Blocking Property with Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation (The New E.O.) laying the ground for two types of sanctions to be imposed against a range of targets:

  • Financial Sanctions

  • Travel Ban

Financial Sanctions

The President granted the power mainly to the Secretary of the Treasury, in consultation of other officials, to impose asset freezing sanctions against a wide range of individuals whose characteristics are listed on The New E.O. It is to be kept in mind that the actual sanctions will come into effect when the Secretary of the Treasury identifies an individual or entity. (OFAC already used the new authority for six entities, three of which were added solely pursuant to The New E.O.) Also, keep in mind that the U.S. person will be generally prohibited to engage in transactions with those targeted under The New E.O..

The grounds provided for designation are diverse and broad. I just mention a few of them that I found interesting:

  • Any person who is or has been a leader, official, senior executive officer, or member of the board of directors of the Government of the Russian Federation;

  • Any political subdivision, agency, or instrumentality of the Government of the Russian Federation;

  • Any person to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, a government whose property and interests in property are blocked pursuant to chapter V of title 31 of the Code of Federal Regulations or another Executive Order, and is a Russian person or resident.

  • Any person determined by the Secretary of State, in consultation with the Secretary of the Treasury, to be responsible for or complicit in, or to have directly or indirectly engaged in or attempted to engage in, cutting or disrupting gas or energy supplies to Europe, the Caucasus, or Asia, and to be:

(i) an individual who is a citizen or national of the Russian Federation; or

(ii) an entity organized under the laws of the Russian Federation or any jurisdiction within the Russian Federation (including foreign branches).

Travel Bans

The entry to the United States of those determined to fall under one of the categories listed in §1 of The New E.O. would be restricted.

The rest of The New E.O. is mainly the boilerplate language that could be found in many executive orders in which the President declares a national emergency in order to impose sanctions.

OFAC Actions

OFAC issued a new Directive pursuant to The New E.O. which in turn targeted certain sovereign bonds issued by a number of instrumentalities of the Russian Government as well as certain loans to those instrumentalities. You might notice that The New E.O. provides authority for asset freezing sanctions against such instrumentalities, yet here we have less restrictive sanctions. Such a less restrictive approach was anticipated and authorized per §1(d) of The New E.O. which reads as follows:

"(d) The prohibitions in subsections (a), (b), and (c) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the date of this order."

Separately, OFAC added 19 individuals and 25 entities to the SDN list pursuant to various authorities ranging from CAATSA to E.O. related to Foreign Interference in a United States Election. OFAC also amended the tags for some already listed entities. (Here)

OFAC also issued a number of FAQs (886, 887, 888, 889, 890, 891), and updated some (673, 674, 675, 676).

Drastic expansion or not

There is no doubt that The New E.O. expanded the grounds for designation largely. So, in that regard, one can say the new actions dramatically expanded the existing authorities and thus, today's actions expanded sanctions against Russia. To the contrary of this view, one can argue that there are no restrictions as long as there is no actual designation by the Treasury and since only three entities were added to the SDN list solely pursuant to The New E.O., today's actions did not expand the previously existing sanctions against Russia in a considerable manner. So depending on how you define "new sanctions" you could argue either way.

With respect to the new Directive issued by OFAC today, it is to be noted that OFAC, in August of 2019, had issued a similar but less restrictive directive pursuant to Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW Directive).

The former Directive prohibited U.S. banks from:

  1. participation in the primary market for non-ruble denominated bonds issued by any ministry, agency, or sovereign fund of the Russian Federation, including the Central Bank of Russia, the National Wealth Fund, and the Ministry of Finance of the Russian Federation, after August 26, 2019; and

  2. lending non-ruble denominated funds to any ministry, agency, or sovereign fund of the Russian Federation, including the Central Bank of Russia, the National Wealth Fund, and the Ministry of Finance of the Russian Federation after August 26, 2019.

Today's directive, however, prohibited the U.S. Financial Institutions from:

  1. participation in the primary market for ruble or non-ruble denominated bonds issued after June 14, 2021 by the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation; and

  2. lending ruble or non-ruble denominated funds to the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation.

Regarding today's designations, it is to be noted that all but three of the new entries were added pursuant to previously-existing or a mix of the new and previous authorities. An interesting point in today's designations was that OFAC listed several crypto-wallet addresses.

Finally, if you want to know more about today's action you can check this client alert by Dechert LLP. (Here)


Please note that this update is not intended to provide any legal advice with respect to the new sanctions against Russia.

Recent Posts

See All

List of Locations in Donetsk and Luhansk

Following the imposition of comprehensive sanctions by the United States and the EU (see here) against Donetsk People’s Republic (DNR) or Luhansk People’s Republic (LNR) regions of Ukraine, many finan

What are the new sanctions against Turkey?

Section 231 of Countering America’s Adversaries Through Sanctions Act ("CAATSA") required the President to impose five or more of the 12 options afforded to her/him as stated in the section 235 of the


bottom of page