Although many of the U.S. sanctions against Russia have been in place for months, companies are still dealing with a range of compliance challenges, Crowell & Moring trade lawyers said this week, especially involving Russia-related service restrictions. They also said they don’t expect the pace of sanctions to slow anytime soon, especially as the U.S. ramps up enforcement efforts this year.
Danish multinational mineral wool product manufacturer Rockwool International confirmed a Global Investigations Review report that the Danish Business Authority is investigating the company for its Russia-related business activities. Rockwool said the agency had requested "general information, for example, regarding ownership structures as well as regarding potential sanctioned sales and sales involving the Russian military."
The EU General Court in a March 1 opinion granted "interim measures" allowing Russian national Nikita Mazepin, sanctioned in September, to enter the EU to "negotiate his recruitment" as a Formula 1 driver racing under a neutral flag. The opinion marks the first time the court suspended sanctions on a person pending the main hearing of the case, according to the European Sanctions blog.
Shipments of export-controlled technologies from the U.S. and its allies to Russia have dropped nearly 50% by value since Russia’s invasion of Ukraine last year, said Thea Kendler, the Bureau of Industry and Security’s assistant secretary for export administration. Kendler, speaking during a conference last week hosted by the Association of Women in International Trade, touted the impact of export restrictions imposed by Japan, the U.K., South Korea and other nations she said are part of the Global Export Control Coalition (GECC), adding that the controls have led to the “severe deterioration” of Russia’s ability to sustain its military.
The European Commission recently updated its frequently asked questions page on specialized financial messaging services and how they intersect with sanctions. The commission updated the answer to the first FAQ -- "What are the banks subject to the prohibition to provide specialized financial messaging services?" -- and amended the answer to the second FAQ, which deals with Russian banks using "other means of communication" to "compensate" for restrictions placed on their ability to use financial messaging services, such as SWIFT.
Two U.S. citizens were arrested March 2 for their role in a yearslong scheme to avoid U.S. export controls on aviation-related technology headed for Russia, DOJ announced.
The U.S. last week sanctioned five Russian officials and one "expert witness" involved in the arrest and imprisonment of Russian opposition politician Vladimir Kara-Murza. The designations came after lawmakers, including Sens. Bob Menendez, D-N.J., and Jim Risch, R-Idaho, asked the administration to impose Magnitsky human rights sanctions against Russia for the arrest of Kara-Murza, who has spoken against the war in Ukraine (see 2209270021 and 2301260046).
Russia is using the United Arab Emirates as a major transhipment hub to import controlled goods, a Treasury Department official said last week. UAE companies exported more than $18 million worth of goods to sanctioned Russian entities between July and November, said Elizabeth Rosenberg, assistant secretary for terrorist financing and financial crimes. They also exported more than $5 million worth of U.S.-origin and export controlled goods to Russia June to November. Those items included “semiconductor devices” used by Russia to fight its war in Ukraine.
The Bureau of Industry and Security will increase the number of penalties it issues against corporations for export violations this year, an effort it hopes will lead to improved industry compliance, the top export BIS enforcement official said last week. DOJ also will concentrate more resources on targeting export violators, a top agency official said, and plans to significantly expand its Export Control Section.
Russia could run out of money in 2024 and need funds from "friendly" nations to continue to weather the sanctions storm, billionaire Oleg Deripaska said March 2 at the Krasnoyarsk Economic Forum in Serbia, Bloomberg reported. "There will be no money already next year," Deripaska, founder of aluminum giant Rusal International, said. "We will need foreign investors." Russian authorities are already planning to hike budget revenue with changes to how it taxes oil companies, and is considering a one-time levy on commodity producers, the report said.