OFAC sanctions four Ukrainian officials for acting on behalf of Russia; More Russia sanctions could follow
With tensions running high between Washington and Moscow over a possible imminent Russian invasion of Ukraine, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) today placed four (4) current and former Ukrainian officials under Executive Order ( “EO”) 14024 of April 15, 2021. In a press release Issued earlier this morning, OFAC claimed that Russia’s Federal Security Service (“FSB”) was “recruiting[s] Key Ukrainian citizens to gain access to sensitive information threaten Ukraine’s sovereignty and then use these Ukrainian officials to create instability in the run-up to a possible Russian invasion.” OFAC also noted that since at least 2016, Russian agents have been trying to influence the US elections.
In today’s action, OFAC added two (2) current Ukrainian MPs – Taras Kozak and Oleh Voloshyn – to the list of Specially Designated Nationals and Banned Persons (“SDN List”), designating them as FSB “pawns”. OFAC accused Kozak of amplifying false narratives about the 2020 US election and Voloshyn of undermining Ukrainian government officials and promoting Russian interests. OFAC has also added two (2) former Ukrainian officials to the SDN list – Volodymyr Oliynyk and Vladimir Sivkovich. OFAC alleges that Oliynyk collected information about Ukraine’s critical infrastructure for the FSB and that Sivkovich was involved in influence and disinformation campaigns targeting both Ukraine and the US
All four (4) SDN designations were made in accordance with EO14024, which authorizes OFAC to impose sanctions on persons who act or purport to act, directly or indirectly, for or on behalf of the Government of the Russian Federation. As a result of the designations, all assets and property of such persons in the US or under the control of US persons must be frozen and reported to OFAC. US persons are prohibited from sending or receiving any funds, goods or services to/from these newly designated SDNs. Under OFAC’s 50% Ownership Rule, these sanctions also extend to any company in which these SDNs, directly or indirectly, either individually or jointly with other SDNs, own 50% or more.
The US also recently signaled its willingness to impose additional sanctions if Russia proceeds with an invasion of Ukraine, but has not shared many details of its plans. on January 21, 2022, Deputy Finance Minister Wally Adeyemo, speaking with Ukraine’s Finance Minister Serhiy Marchenko, stressed “that the United States and its allies and partners are ready to impose significant costs on the Russian economy if Russia invades Ukraine further.” Some news reports have predicted that restrictions on semiconductor exports to Russia, sanctions on Russian financial institutions and controls on foreign-made goods going to Russia are among the options the White House is considering. However, any additional sanctions beyond the four (4) SDN designations reported in this post are purely speculative at this time.
Husch Blackwell’s Export Controls and Economic Sanctions Team continues to monitor US sanctions and export controls against Russia and will provide further updates as further developments arise.
grant leach is an Omaha-based partner of the law firm Husch Blackwell LLP with a focus on international trade, export controls, trade sanctions and anti-corruption compliance.