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US Issues New Russia-Related Entity Listings, Sanctions

April 13, 2023 by Ian Cohen|Top News

The U.S. this week announced new Russia-related trade restrictions, adding 28 entities to the Commerce Department’s Entity List and more than 100 entries to the Treasury Department’s Specially Designated Nationals List. The measures target people and companies either operating in Russia, aiding the country’s war against Ukraine or helping Moscow evade sanctions.

The Entity List additions, effective April 12, include companies in China, Armenia, Malta, Russia, Singapore, Spain, Syria, Turkey, the United Arab Emirates and Uzbekistan, all of which have supported Russia’s military or defense industrial base, the Bureau of Industry and Security said. The entities, which include semiconductor companies and other technology firms, will be subject to a license requirement for all items subject to the Export Administration Regulations and a license review policy of denial or a presumption of denial. Some license applications for food and medicine designated as EAR99 will be reviewed on a case-by-case basis.

BIS designated several entities as Russian or Belarusian military end users -- including Russia-based Avtex Semiconductor, China-based 3HC Semiconductors (HK) and Turkey-based Dexias Industrial Products -- subjecting them to additional license requirements outlined in the Russia/Belarus-Military End User Foreign Direct Product rule. Those entities either procure items for sanctioned or entity-listed Russian entities or “significantly” contribute to Russia’s defense industrial base, the agency said. Other entities located in Malta, the UAE, Spain and Syria helped to coordinate flights that “assisted in the transfer” of Iranian unmanned drones, personnel and related equipment to Russia (see 2303220037).

All exports that now require a license as a result of the Entity List additions that were aboard a carrier to a port as of April 12 may proceed to their destinations under the previous eligibility as long as the items have been exported before May 12, BIS said. Any items not exported before midnight May 12 will require a license.

“When we identify parties attempting to circumvent our rules, we will not hesitate to add them to the Entity List and scrutinize further transactions,” said Thea Kendler, BIS assistant secretary for export administration. Undersecretary Alan Estevez said the agency will “continue to impede the efforts of those who disrupt peaceful trade by seeking to evade our controls.”

In addition to new export controls, the U.S. sanctioned more than 100 people and companies across at least 20 jurisdictions, including people helping Russia import “critical” technologies and a “facilitation network” led by previously sanctioned Russian billionaire Alisher Usmanov (see 2203030073). Those designations, imposed by Treasury’s Office of Foreign Assets Control and the State Department, target people working for Usmanov and his “wide network of businesses in financial safe havens,” including entities based in Switzerland, Cyprus, the Cayman Islands, France and Slovakia.

OFAC also revoked Russia-related General License 15, which had authorized transactions involving entities owned 50% or more by Usmanov that were not listed on OFAC’s SDN List.

The agency issued several other new general licenses:

OFAC also issued a new frequently asked question to provide guidance on previously issued GL 25C, which authorizes certain telecommunications-related transactions involving Russia. The agency warned that companies may not be able to use GL 25C to conduct certain transactions with Megafon PAO or Digital Invest, and may have to use GL 65 instead.

Secretary of State Antony Blinken said the U.S. will “continue to take action against Russia and those supporting its war in Ukraine,” including by “further implementing the G7’s commitment to impose severe consequences on third country actors who support Russia’s war.” G-7 members and the EU in February committed to expanding sanctions against Russia and picking up enforcement efforts to counter Moscow’s sanctions evasion tactics (see 2302240054).

The 28 new Entity List additions, added under 32 entries because some are listed under multiple countries, are:

Armenia

China

Malta

Russia

Singapore

Spain

Syria

Turkey

United Arab Emirates

Uzbekistan