On August 2, 2017, President Trump signed into law the Countering America’s Adversaries Through Sanctions Act (CAATSA), which strengthened U.S. sanctions on Russia, North Korea and Iran. CAATSA had been passed by overwhelming “veto-proof” majorities of Congress and President Trump signed the bill while expressing reservations concerning the limitations it placed on the President’s authority.
On June 15, 2017, the Senate passed the Countering Iran’s Destabilizing Activities Act of 2017 (S.722) by a vote of 98-2. Included with the bill is a significant Russia sanctions amendment, the Countering Russian Influence in Europe and Eurasia Act of 2017, which would expand U.S. primary and secondary sanctions for Russia and limit the President’s ability to ease existing sanctions.
The bill represents a bi-partisan compromise among key legislators to advance Iran and Russia sanctions measures together. The House of Representatives is now beginning to consider its own Iran and Russia sanctions measure, with the potential for final legislation this fall. Continue reading →
Donald Trump’s victory in the 2016 Presidential election put the Republican Party in charge of the White House and Congress for the first time in a decade. President-elect Trump ran as an anti-establishment candidate who departed from many traditional Republican positions and promised bold and in some respects controversial reforms. How his administration will govern and the extent to which its policies will be supported in Congress are key questions facing companies and investors.
This report comments on aspects of international trade, sanctions and export control policies that are currently at the forefront of discussion.
Pillsbury and Goltsblat BLP are pleased to announce that Evgeny Shumilov, Economic Attaché, Embassy of the Russian Federation, will be participating in the October 21 luncheon and roundtable discussion on doing business in Russia. Mr. Shumilov will open the event by discussing the state of U.S.-Russia trade and opportunities for U.S. companies in the Russian market.
Please join us for Mr. Shumilov’s remarks and for presentations from top legal minds from Pillsbury and Goltsblat BLP regarding the key developments under Russian, U.S. and EU laws and regulations for U.S. companies doing business in Russia today.
- Russian Legal Developments: Major recent Russian legislative developments and initiatives, including changes to employment, real estate, commercial, anti-trust, corporate and tax laws.
- U.S. and EU Sanctions Update: Current compliance considerations for U.S. companies and their subsidiaries and affiliates doing or seeking to do business in Russia.
- News from Capitol Hill: Outlook for U.S.-Russia relations through the November 2016 elections.
Evgeny Shumilov, Economic Attaché, Embassy of the Russian Federation
Andrey Goltsblat, Managing Partner, Goltsblat BLP
Nancy Fischer, Partner, Pillsbury
The Honorable Gregory H. Laughlin, Senior Counsel, Pillsbury
Elina Teplinsky, Partner, Pillsbury
For questions or to register, please contact Julie Merkin at firstname.lastname@example.org.
On 19 June, the European Council extended EU sanctions against Russia pursuant to Council Decision (CFSP 2015/959). This follows a series of increasingly coordinated actions by the US and EU, such as the joint statement produced at the G7 meeting two weeks ago, to show a united front against continued Russian activity related to Ukraine. With this extension, EU sanctions will remain in place until January 31, 2016 unless there is a complete implementation of the Minsk Agreements before then.
However, looking forward, US and EU policymakers recently leaked to the media that they are pre-planning a series of coordinated sanctions against Russia should the situation deteriorate. These new measures could include new travel bans on Russian government officials and business leaders, but could escalate significantly to more broad-based sanctions against the Russian energy and financial sectors. In particular, these sanctions could target the sale of petroleum products from Russia and Russia-related financial transactions. Some western leaders are also supportive of utilizing these new sanctions should the status quo remain unchanged for much longer. Continue reading →
The leaders of the G7 met for two days of discussions in Elmau, Southern Germany on 7 and 8 June 2015.
High on the agenda was the issue of Russian targeted EU and US sanctions over Moscow’s role in support of Ukrainian rebels.
Russia has already been excluded from what was formerly known as G8 following its annexation of Crimea in 2014.
Following talks between President Obama and German Chancellor Merkel in Elmau, reportedly over a traditional Bavarian meal of sausages and beer, the White House issued a statement confirming: “The duration of sanctions should be clearly linked to Russia’s full implementation of the Minsk agreements and respect for Ukraine’s sovereignty”. Continue reading →
U.S., EU and other sanctions and export control regimes continue to target the Russian defense and energy sectors, restricting access to both military and dual use items. This creates demand pressure on the Russia side and as a result potential added compliance risk for exporters. Companies often ask “what are we expected to do try and prevent our exports from going inadvertently to prohibited end users and end uses?”
On May 18, 2015, the U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) released guidance on due diligence practices for exporters to prevent unauthorized exports to Russia, amidst express concerns of front companies and intermediaries making transshipments to Russia in violation of the Export Administration Regulations (“EAR”). In particular, the guidance focuses on exports of (a) National Security or “NS”-controlled items and (b) military end-use or end-user controlled items–which both require a license for Russia–to countries with less restrictive licensing requirements.
The 17th EU-Ukraine summit took place in Kyiv, Ukraine on 27 April 2015, being the first summit taking place under the framework of the Association Agreement, the treaty between the EU and Ukraine that establishes a political and economic association between the parties.
The summit was an opportunity for the EU and Ukraine to discuss: (i) the implementation of the Association Agreement and the political and economic reforms in Ukraine including EU financial and other assistance; (ii) the crisis in Eastern Ukraine and the application of the Minsk agreements; and (iii) regional issues and the preparations for the upcoming Eastern Partnership summit in Riga.
During the summit, EU and Ukrainian leaders are reported to have agreed that the full implementation of the Minsk agreements, the ceasefire deal struck between Ukraine and pro-Russian rebels, remains the best chance to move towards a political solution, taking note of the European Council Conclusions of 19 March 2015 which called both for the swift and full implementation of the Minsk agreements, and for the duration of the restrictive measures against Russia to be linked to such implementation.
It has been reported that Russia has proposed the sale of S-300 surface-to-air missile defense systems to Iran. According to the Russian News Agency TASS, Russian Foreign Minister Sergey Lavrov said that Russia’s previous voluntary embargo of sales of military equipment to Iran is no longer needed due to the progress in the negotiations regarding Iran’s nuclear program.
On May 1, 2015, Ed Royce (R-Calif.), the Chairman of the House Foreign Affairs Committee, and ranking member Eliot Engel (D-N.Y.) sent a letter to President Obama stating that the White House should consider using sanctions to deter the delivery of the missile defense system to Iran. The letter calls on the President to determine whether the proposed sale would advance Iran’s efforts to acquire or develop destabilizing numbers and types of advanced conventional weapons.
On January 29, 2015, the Bureau of Industry and Security (BIS) issued a rule amending the Export Administration Regulations (EAR), consistent with the prohibitions contained in Executive Order 13685 that broadly prohibited new investments in, imports from and exports to the Crimea region. Specifically, the Executive Order prohibited “the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any goods, services, or technology to the Crimea region of Ukraine.”
A license is now required for exports and reexports to, and transfers within, the Crimea region of Ukraine for all items subject to the EAR, other than food and medicine designated as EAR99. There will be a presumption of denial for all such license applications, with the exception of certain agricultural commodities, medicine, medical supplies, and replacement parts authorized under the Department of the Treasury’s Office of Foreign Assets Control General License No. 4. For those items, BIS will review the license applications on a case-by-case basis.
Shipments of items that did not previously require a license that were on the dock for loading, or loaded on January 29, 2015, were allowed to proceed without a license, provided that they were exported/reexported by February 1, 2015.
Certain license exceptions are available for exports and reexports to, and transfers within, the Crimea region of Ukraine. These include the following, subject to the specific requirements in each exception:
- TMP for items for use by the news media
- GOV for items for personal or official use by personnel and agencies of the U.S. Government, the International Atomic Energy Agency (IAEA), or the European Atomic Energy Community (Euratom)
- GFT for gift parcels and humanitarian donations
- TSU for certain operation technology and software for lawfully exported commodities, and certain sales technology
- BAG for exports of items by individuals leaving the United States as personal baggage
- AVS for civil aircraft and vessels
For guidance on legal issues involving Ukraine-Russia sanctions, contact any of the above authors, or any of the professionals in Pillsbury’s International Trade Group.