Crimea Region Sanctions

Sanctions Related to Crimea Region

The U.S. sanctions imposed “country-based” sanctions on the Crimea region of Ukraine. Sanctions against Russia Crimea began with a series of executive orders issued by President Obama in 2014. The first of these, Executive Order 13660, was signed on March 6, 2014, authorizing Crimea sanctions on individuals and entities responsible for violating Ukraine’s sovereignty and territorial integrity. This was followed by Executive Order 13661 and Executive Order 13662, which expanded the scope of the sanctions to include additional individuals and entities contributing to the situation in Ukraine.

On December 19, 2014, President Obama issued Executive Order 13685, imposing comprehensive sanctions on Crimea region of Ukraine.

Section 589.201 of the Reissued Regulations has been significantly expanded to incorporate key legislative provisions aimed at strengthening the U.S. sanctions framework against Russia. This section now includes elements from the Ukraine Freedom Support Act of 2014, the Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014, and sections of Title II of the Countering America’s Adversaries Through Sanctions Act (CAATSA). These provisions grant the Office of Foreign Assets Control (OFAC) the authority to impose secondary sanctions, which can include designating individuals or entities as “Specially Designated Nationals” (SDNs). Such designations can severely restrict the ability of those listed to engage in financial transactions with U.S. persons and entities, thereby increasing the pressure on Russia to comply with international norms.

Section 589.209 outlines the prohibitions and conditions that OFAC can impose on U.S. correspondent or payable-through accounts held by foreign financial institutions (FFIs). These restrictions are targeted at FFIs that engage in significant transactions or activities on behalf of certain SDNs. If OFAC determines that an FFI is involved in such activities, it can impose strict conditions or outright prohibitions on the FFI’s access to U.S. financial systems. The affected FFI will be added to the List of FFIs subject to the Correspondent Account or Payable-Through Account Sanctions (CAPTA List) on OFAC’s website, and its name will be published in the Federal Register along with the specific prohibitions or conditions imposed.

Sections 589.206 to 589.208 incorporate the prohibitions established by Executive Order 13685, which targets the Crimea region with comprehensive U.S. sanctions. These sections outline the restrictions on transactions involving Crimea, including prohibitions on new investments, imports, and exports related to the region. The Reissued Regulations also integrate several General Licenses (GLs) that authorize specific activities otherwise restricted under Crimes sanctions. These GLs allow for the exportation or reexportation of agricultural commodities, medicine, medical supplies, and replacement parts; noncommercial, personal remittances; operation of certain bank accounts; transactions related to telecommunications and mail; and exportation of certain services and software incident to internet-based communications. Additionally, new GLs authorize transactions necessary for publishing, emergency landings and air ambulance services, and support for nongovernmental organizations’ activities. These licenses aim to mitigate the humanitarian impact of the sanctions on Crimea while maintaining pressure on the Russian government to respect Ukraine’s sovereignty.

New Russia-Related General Licenses

OFAC has recently issued four new General Licenses related to Russia, which do not signify a major shift in U.S. foreign policy but provide necessary exceptions to the existing sanctions framework. 

• General License 83: Authorizes transactions related to the import of certain categories of fish, seafood, and preparations thereof, which were previously prohibited by Executive Order 14068. This license aims to mitigate the impact on U.S. businesses involved in the seafood industry;

• General License 84: Allows the closure of correspondent or payable-through accounts, facilitating the orderly winding down of financial relationships that may involve sanctioned entities. This license ensures that financial institutions can comply with Crimea sanctions without disrupting legitimate financial activities;

• General License 85: Permits the wind down of transactions and closure of accounts involving Expobank Joint Stock Company. This license provides a structured approach for U.S. persons and entities to disengage from financial dealings with the bank, ensuring compliance with sanctions against Crimea;

• General License 76A: Authorizes transactions necessary for the wind down of activities involving Sistema, Saint Petersburg Exchange, Limited Liability Company Arctic LNG 2, or any entity they own 50% or more of. This license allows for the divestment or transfer of interests in these entities, ensuring that U.S. persons can exit these investments in compliance with the sanctions on Russia for annexing Crimea.

Our team of experienced OFAC license lawyers know how to obtain general licenses related to Russia sanctions. We provide expert guidance on the specific conditions and requirements of each license, ensuring that your transactions are compliant with U.S. regulations.