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New Russia Sanctions: 7 Insights on the Latest Measures

Today, the Biden Administration issued major new sanctions against Russia to commemorate the two-year anniversary of Russia’s invasion of Ukraine, and in response to Russian opposition leader Alexei Navalny’s death in prison. Here are seven insights regarding this action.

1. Altogether, the U.S. Treasury, State, and Commerce Departments targeted over 600 individuals and entities identified as supporting Russia’s war effort and defense industrial base, one of the broadest single-day U.S. sanctions actions ever.
2. The sanctions targets included certain strategically significant operators at the apex of Russia’s economy, including Sovcomflot (Russia’s state-owned shipping company) and National Payment Card System (the operator of Russia’s Mir payments system), as well as many sectors of Russia’s economy.
3. Altogether, the designations target various entities in Russia’s financial infrastructure; individuals and entities involved in sanctions evasion and diversion of products; players in Russia’s procurement network for UAVs in coordination with Iran; Russia’s Arctic LNG 2 and other energy projects; Russia’s metals and mining sector; parties supporting Russia’s defense industrial base (including suppliers and logistics providers); and individuals involved in Navalny’s death.
4. The geographical reach of the designations is particularly notable, targeting not only Russian individuals and entities, but also parties based in China, Turkey, the UAE, India, South Korea, Germany, Liechtenstein, and Kyrgyzstan.
5. Export controls: The Commerce Department designated over 90 entities on the Entity List—thereby cutting them off from all U.S. items and a range of non-U.S. items—and coordinated with the EU, the UK, and Japan to update the “common high priority items” list to highlight diversion risks associated with exports of machine tools.
6. The targeting of National Payment Card System (the operator of Russia’s Mir payments system) is particularly notable, as it will exert significant pressure on Russia’s payment cards system, a measure intended to blunt Russia’s ability to evade sanctions.
7. Overall, today’s sanctions actions are intended to hit a wide range of pressure points in order to inflict costs for Russia’s invasion of Ukraine and, more recently, Navalny’s death. This is especially notable for companies with direct or indirect Russia exposure, including in jurisdictions that may not be aligned with U.S.-led sanctions.

Read the press release: On Second Anniversary of Russia’s Further Invasion of Ukraine and Following the Death of Aleksey Navalny, Treasury Sanctions Hundreds of Targets in Russia and Globally | U.S. Department of the Treasury

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