Biden announces additional import and export restrictions from Russia
United States: Biden announces additional import and export restrictions on Russia
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On March 11, 2022, President Joseph Biden issued a Executive Decree (EO) announcing new bans on imports, exports and new investments linked to Russia. The announcement was made alongside the President and other G7 leaders from Canada, France, Germany, Italy, Japan and the United Kingdom, as well as the European Union, announced new economic measures that will revoke the “Most Favored Nation” of Russia. ” status (to see Updated March 12, 2022) and efforts to deny borrowing privileges from multilateral financial institutions. The EO prohibits the following:
- the importation into the United States of the following Russian products: fish, seafood and their preparations; alcoholic beverages; non-industrial diamonds;
- the export, re-export, sale or supply, directly or indirectly, from the United States or by a US person, of luxury goods;
- new investment in any sector of the economy of the Russian Federation;
- the export, re-export, sale or supply, directly or indirectly, from the United States or by a United States person, of banknotes denominated in United States dollars to the Government of the Russian Federation or to any person located in Russia ; and
- any approval, financing, facilitation or guarantee by a US person of a transaction by a foreign person where the transaction by such foreign person would be prohibited by the above prohibitions if conducted by a US person or in the United States.
The EO authorizes the Departments of Commerce, State, and Treasury to impose additional import and export restrictions and new investment prohibitions, as appropriate. In addition, the Treasury Department has issued initial guidance, in the form of frequently asked questions (Frequently Asked Questions 1,021), on the scope of these sanctions to clarify that all U.S. persons must comply with sanctions regulations “whether a transaction is denominated in traditional fiat currency or virtual currency”.
Relevant OFAC Actions
To implement certain aspects of the EO import prohibitions, the Treasury Department’s Office of Foreign Assets Control (OFAC) has issued several General Permits (GLs). GL 17 authorizes the import of existing purchases of prohibited Russian products covered by the EO under written contracts entered into before March 11 through March 25, 2022. OFAC has also issued GL 18 authorizing certain activities regarding personal non-commercial remittances denominated in US dollars from the United States or from a US person to an individual in Russia. GL 19 authorizes persons who are U.S. persons located in the Russian Federation to engage in all transactions that are ordinarily incidental to and necessary for their personal maintenance in Russia, including payments such as housing costs, personal-use property , payment of taxes or fees, etc.
OFAC also stated that the EO does not prohibit U.S. persons from complying with the ban on importing transactions such as the settlement of contracts or other business-related activities, nor does it prohibit U.S. persons Americans to engage in transactions to sell or redirect shipments. outside the United States of prohibited imports previously destined for the United States. New EO March 11 FAQs are available here.
OFAC named other “Russian and Kremlin elites, oligarchs, and Russian political and national security officials who supported Russian President Vladimir Putin’s invasion of Ukraine.” These individuals have been placed on OFAC’s Specially Designated Nationals (SDN) list and include members of the Russian State Duma; another Russian billionaire (and his plane and his yacht); and the entire board of directors of VTB Banks. Detailed information on these SDN lists is available here.
In view of the recently tightened sanctions in the so-called Donetsk People’s Republic (DPR) and Lugansk People’s Republic (LPR) regions of Ukraine, OFAC has also released GL 23 authorizing various transactions in support of the activities of non-governmental organizations (NGOs) in these regions, including the support of projects and humanitarian needs.
Relevant BRI actions
To implement some aspects of the OE export restrictions, the Bureau of Industry and Security (BIS) of the Ministry of Commerce issued a Final rule effective March 11, 2022, amending the Export Administration Regulations (EAR) to restrict the export, re-export or transfer (in-country) to or within Russia or Belarus of following categories of “luxury goods”:
- tobacco and tobacco products;
- luxury watches;
- luxury clothing and high-end fashion items, cosmetics, perfumes and branded clothing;
- miscellaneous decorative items, such as rugs, fine china and tableware, crystal, works of art, antiques and collectibles;
- jewelery with pearls, precious stones, precious and semi-precious stones or precious metals;
- electronic items such as televisions, video monitors, DVD players, personal digital assistants, music players and laptop computers;
- luxury transportation items, including yachts, automobiles, racing cars, snowmobiles, motorcycles;
- certain recreational items, such as musical instruments, recreational sports equipment; and
- alcoholic beverages, including wine, beer, ales and spirits.
The final rule provides a detailed list of numbers and descriptions from Schedule B of the 2022 Census Bureau Schedule B Export Concordance. Two new licensing requirements have been implemented to enforce these restrictions: EAR which are intended for Russia or Belarus, regardless of their end use, and another which applies to those articles “which are intended for Russian and Belarusian oligarchs and malicious actors, regardless of their geographical location, who have been designated by OFAC under certain Russian Rules or Executive Orders related to Ukraine.” BIS said very few license exceptions will be available for these restrictions (and none will be available to OFAC designees) and that where an export license is required, they will be subject to a ” opt-out policy”.
Although in force since March 11, 2022, the BIS said that exports of items covered by the rules that were en route on board a carrier to a port of export, re-export or transfer (in the country) on March 11, 2022, in accordance with actual re-export or transfer (in-country) orders to or into a foreign destination may be routed to that destination under any prior eligibility for license exception or re-export or a transfer (within the country) without a license (NLR).
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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