On December 31, 2019, the U.S. District Court for the Northern District of Texas overturned a $2 million fine imposed by the Department of the Treasury’s Office of Foreign Assets Control (OFAC) against ExxonMobil Corp., and its U.S. subsidiaries ExxonMobil Development Company and ExxonMobil Oil Corp. (collectively, “Exxon”). This marked a rare court decision overturning an OFAC sanctions penalty. The Court’s decision focused not on the subject of the sanctions but addressed whether OFAC had provided proper notice of its sanctions requirements.
On August 8, 2018, the State Department announced that it had concluded that Russia was responsible for poisoning former double agent Sergei Skripal and his daughter Yulia using the nerve agent Novichok and that it had sent a report to Congress pursuant to the Chemical and Biological Warfare Weapons Elimination Act of 1991.
The statute requires the President to report to Congress when there has been a determination that another country has used chemicals weapons. Thereafter, the statute requires the President to impose a number of sanctions relating to (i) foreign assistance, (ii) arms sales, (iii) arms sales financing, (iv) denial of U.S. credit assistance (e.g., Export-Import Bank loans) and (v) a prohibition on exports of any controlled goods.
- The Treasury Department has placed several prominent Russian individuals and companies on the Specially Designated Nationals and Blocked Persons lists (SDN list). Several of these parties are Russian billionaires previously identified in the Treasury Department’s so-called “Oligarch List” reported to Congress on January 29, 2018.
- Under the general licenses issued with the new listings, U.S. persons have until June 5, 2018 to wind down operations with specified listed companies and their subsidiaries, and until May 7, 2018 to divest debt, equity, or holdings owned by EN+ Group PLC, GAZ Group and United Company RUSAL PLC.
- General License 12, which allows wind down operations with several newly designated SDN companies, instructs that payments to the SDNs must be made into blocked accounts with U.S. banks. This deviates from previous general licenses which did not place conditions on how SDNs must be paid.
On April 6, 2018, the Treasury Department’s Office of Foreign Assets Control (OFAC), in consultation with the State Department, designated 7 Russian oligarchs, 12 companies that they own or control, 17 senior Russian government officials, and 1 state-owned Russian weapons trading company and its subsidiary, a Russian bank. (The list may be found here.)
This week, the U.S. government took several steps to implement sections of the Countering America’s Adversaries Through Sanctions Act of 2017 (CAATSA), with implications for Russia-related sanctions and their enforcement. On October 27, 2017, the Department of State (DoS) published guidance on sanctions with respect to Russia’s Defense and Intelligence Sectors under Section 231 of CAATSA. In addition, on October 31, 2017, DoS published guidance on how it would view secondary sanctions for investments in special Russian crude oil projects and energy export pipelines. Separately, the Department of Treasury’s Office of Foreign Assets Control (OFAC) amended Directive 4 of the Ukraine/Russia related sanctions and published updated FAQs relating to the amended Directive as well as new guidance on CAATSA sections 223(a), 226, 228, 233.
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 email@example.com.
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 →