US beefs up Russia bans with ‘mandatory’ secondary sanctions
Insurer Sogaz, shipyard Zvezda, and Arctic LNG 2 among companies hit with additional measures
The US is ramping up the pressure on Russia with secondary sanctions on almost 100 previously sanctioned entities, increasing the risk to third parties transacting with them. The additional measures also require Congress to be notified and give consent to any removal, which could complicate potential attempts by the incoming administration to roll them back
THE US beefed up and entrenched its prohibitions on Russia on Wednesday, slapping secondary sanctions on almost 100 entities that were previously designated and adding over 150 new designations.
Among the entities now under secondary sanctions risk are insurer Sogaz, State Transport Leasing Co (GTLK), shipyard Zvezda, and Arctic LNG 2.
The entities, which were previously sanctioned pursuant to executive order 14024, are now also designated under EO 13662. Any person that facilitates “significant transactions” on or behalf of them could be subject to “mandatory secondary sanctions”, the US Treasury Department said.
“The additional designation of these entities under EO 13662 adds substantial risk to any party doing business with them,” explained Manuel Levitt, senior associate at Washington DC-based law firm Miller & Chavelier.
Tuesday’s announcement came just days after the Biden administration announced the largest shipping sanctions crackdown in years, targeting over 180 vessels and dozens of entities, including Russian oil and gas producers and traders.
While the Biden administration is using its final days to launch a flurry of sanctions on Russia, the future of US policy under president-elect Donald Trump is unclear, with some expecting the incoming administration will seek to curb down prohibitions on Moscow.
However, the additional designations under EO 13662 would make these harder to roll back because the Countering America’s Adversaries Through Sanctions Act, which passed in 2017, requires consent from both chambers of Congress for any removal.
In addition to targeting entities operating in Russia’s energy sector with the redesignations, the US also slapped the secondary sanctions on entities operating in Russia’s financial services sector and entities operating in Russia’s “defence and related material sector”.
The 150-plus individuals and entities sanctioned on Wednesday that were not previously designated include companies in Russia’s defence industry and those “supporting its military industrial base”, and “dozens of entities” helping Russia evade sanctions, the Treasury Department said.
“Today’s actions frustrate the Kremlin’s ability to circumvent our sanctions and get access to the goods they need to build weapons for their war of choice in Ukraine,” said deputy secretary of the treasury Wally Adeyemo.
“Today’s expansion of mandatory secondary sanctions will reduce Russia’s access to revenue and goods.”
