On March 2, 2023, the Departments of Commerce, Justice and the Treasury issued a joint Compliance Note cautioning financial institutions and multinational companies subject to U.S. jurisdiction to “be vigilant against efforts by individuals or entities to evade sanctions and export control laws.” The Compliance Note emphasizes the “unprecedented scope and scale” of sanctions against Russia following its invasion of Ukraine and indicates that “malign actors” continue efforts to evade Russia-related sanctions and export controls, stating that “One of the most common tactics is the use of third-party intermediaries or transshipment points to circumvent restrictions, disguise the involvement of Specially Designated Nationals and Blocked Persons (SDNs) or parties on the Entity List in transactions, and obscure the true identities of Russian end users.” The joint Compliance Note highlights some of these evasive tactics in order to assist efforts to identify warning signs and to implement appropriate compliance procedures.

The Compliance Note provides guidance on certain methods and tools to identify evasive tactics, including having an updated, risk-based compliance program involving management commitment, risk assessment, internal controls, testing, auditing and training. It also provides a list of common red flag indicators for evasion (see also BIS’s Red Flag Indicators and Know Your Customer Guidance), and recommends that companies refer to BIS and OFAC enforcement action summaries to review tactics that may be used to evade detection.

The Compliance Note concludes with a reminder that the three agencies will continue to undertake both civil and criminal enforcement actions against those entities and individuals who engage in efforts to evade Russian-related sanctions and export control laws. Finally, the Compliance Note provides examples of such actions, and describes some of the tactics that have been used and states that the U.S. government “will not hesitate to pursue criminal prosecutions, administrative enforcement actions, or additional designations where the circumstances so warrant.”

Aluminum

On the one-year anniversary of Russia’s invasion of Ukraine, President Joseph Biden on February 24, 2023, issued a Proclamation on Adjusting Imports of Aluminum Into the United States to implement: (1) effective March 10, 2023, a 200% import tariff on aluminum articles and derivative aluminum articles that are the products of Russia, and (2) effective April 10, 2023, a 200% import tariff on (a) aluminum articles from other countries that use any primary aluminum smelted in Russia in the manufacture process or aluminum articles cast in Russia, and (b) derivative aluminum articles from other countries that use primary aluminum smelted in Russia in the manufacture process or derivative aluminum articles cast in Russia. Any country imposing a 200% tariff or more on its imports of aluminum articles that are products of Russia may be exempt from the tariffs under this proclamation

The Proclamation declares that due to Russia’s war against Ukraine, the Russian aluminum industry in particular must be held responsible as “a key part of Russia’s defense industrial base [that] has played a major role in supplying Russia with weapons and ammunition used in the war.” The Proclamation, issued pursuant to section 232 of the Trade Expansion Act of 1962, also justifies the tariff increases as “a significant step toward ensuring the viability of the domestic aluminum industry.” 

This Proclamation follows the original Section 232 aluminum investigation and proclamation issued by former President Donald Trump that imposed a 10% import tariff on aluminum articles from various countries (see Update of March 8, 2018).

In a separate Proclamation, and pursuant to the Suspending Normal Trade Relations with Russia and Belarus Act enacted in April 2022 (see Update of April 11, 2022), President Biden increased tariffs on additional Russian products imported into the United States. The proclamation increases tariffs “on more than 100 Russian metals, minerals, and chemical products worth approximately $2.8 billion to Russia” according to a White House Fact Sheet. This proclamation imposes ad valorem duty rates to 35% on certain Russian products and 70% for other products. These increases will become effective on April 1, 2023 for goods entered for consumption, or withdrawn from warehouse for consumption, and will continue in effect, unless expressly reduced, modified, or terminated.

UPDATE: On March 2, 2023, the Presidential Proclamations were formally published in the Federal Register and now include the Annexes that clearly identify the scope of Russian articles and specific rates of duty covered under each proclamation:
– Proclamation 10522 of February 24, 2023, Adjusting Imports of Aluminum Into the United States
– Proclamation 10523 of February 24, 2023, Increasing Duties on Certain Articles From the Russian Federation

On March 2, 2023, the Department of Commerce’s Bureau of Industry and Security (BIS) issued a Final Rule adding 37 entities to the Entity List for contributing to Russia’s military/defense industrial base, supporting China’s military modernization, and facilitating or engaging in human rights abuses in Burma and China, including the following:

  • Three entities in Russia, Belarus and Taiwan have been added for significantly contributing to Russia’s military and/or defense industrial base;
  • Eighteen Chinese entities have been added for acquiring and attempting to acquire U.S.- origin items in support of China’s military modernization efforts, and for supplying or attempting to supply a sanctioned entity in Iran;
  • Six entities based in China and Burma have been added for violations of human rights; and
  • Fourteen entities based in China and Pakistan have been added for contributing to ballistic missile programs of concern, including Pakistan’s missile program, and for involvement in unsafeguarded nuclear activities.

Specific details on each entity, including names and addresses, and BIS’ license review policy are available in the Final Rule. These additions to the Entity List are effective as of March 2, 2023. However, shipments to any of the new designees on the Entity List that were en route aboard a carrier on March 2, 2023, pursuant to actual orders for export, reexport, or transfer (in-country) to or within a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR). 

On February 23, 2023, U.S. Customs and Border Protection (CBP) issued new guidance for importers on the agency’s Uyghur Forced Labor Prevention Act (UFLPA) enforcement web page. This includes additional guidance in the form of frequently asked questions (FAQs), guidance setting forth best practices for submitting documentation to prove that detained goods are not subject to the UFLPA, and guidance on executive summaries and sample tables of content for importer applicability review submissions. CBP’s new guidance contains important information regarding the documentation that will be expected from importers in their “applicability review” submissions, which is CBP’s term for an importer submission that seeks to demonstrate that a shipment is not subject to the UFLPA because the merchandise was not produced in whole or in part in the Xinjiang Uyghur Autonomous Region (XUAR) or by an entity on the UFLPA Entity List.

CBP’s FAQs advise importers who wish to submit a request for “applicability review” to provide the following documentation (translated into English, if necessary) to CBP:

  • Transaction and supply chain records, including full records of transactions and supply chain documentation that demonstrate the country of origin of the components – e.g., packing lists, bills of lading, manifests;
  • Documents demonstrating the parties participating in the transactions, including all parties involved in the manufacture, manipulation, or export of a particular good – e.g., summarize the roles of parties involved, as substantiated by other documentation, provide a flow chart of supply chain; and
  • Documents relating to the payment and transportation of raw materials, including documentation showing the origin of the material and that these business transactions (e.g., invoices, contracts, and purchase orders) have occurred financially and physically – e.g., proof of payments, documentation showing the transfer of goods.

In addition, when appropriate, importers should identify that the supply chain is identical to a previously reviewed supply chain for which the goods were found admissible. Importers should provide summary tracing reports to the assigned Center of Excellence to enable CBP to verify that the new product came from the identical supply chain. The summary tracing report should include the suppliers/producers for all production stages and a business record — such as an invoice number, contract number, or purchase order number — involved in the production of the merchandise being imported. According to CBP, using this approach has lessened the detention period for detained shipments to an average of 10 to 14 days.

Similarly, importers of products from supply chains that rely on inputs commingled during the production process with materials suspected of being manufactured using forced labor should provide summary tracing reports with their submission package if they are from a supply chain that is identical to a previously reviewed supply chain for which the goods were found admissible.

CBP also released a guidance that sets forth “best practices” for importers in applicability reviews. CBP’s guidance advises importers to be prepared for detention, including having a clear plan for responding to a detention under the UFLPA. In addition, CBP advises importers to communicate with the appropriate CBP Center of Excellence and Expertise regarding a high-risk import before it arrives at a U.S. port of entry, and to provide a thorough package of documentation in advance of arrival. Importers should also notify CBP when the supply chain for a particular import is identical to one previously reviewed by CBP, if appropriate. CBP expects that as “an importer gains experience with submitting applicability packages and CBP becomes familiarized with consistent supply chains, the processing time for the importer’s applicability reviews generally will decrease.” CBP’s guidance also contains two brief examples of “properly prepared applicability review packages,” one from a solar panel importer and the other from an apparel importer. 

Finally, CBP released another guidance document on executive summaries and sample tables of contents for importer applicability review submissions. CBP advised that each package of documents should be well organized and include an executive summary explaining the documents contained in the package. In addition, CBP requires importers to add a table of contents in their applicability review submissions. CBP’s guidance document also provides for two sample tables of contents – one generic sample and one specific to solar panels. The sample table of contents for a solar panel importer includes documentation importers should get from the module producers, solar cell suppliers, wafer suppliers, ingot suppliers, polysilicon suppliers, metallurgical grad silicon suppliers and quartzite suppliers.

CBP’s UFLPA Implementation web page is available here.

On February 24, 2023, the Department of Commerce’s Bureau of Industry and Security (BIS) issued a Final Rule amending the Export Administrations Regulations (EAR) to impose new export control measures on Iran. These measures address the use of Iranian Unmanned Aerial Vehicles (UAVs) (aka, Unmanned Aircraft System (UAS), aka drones) by Russia in its ongoing war against Ukraine. The Final Rule has been implemented “in order to degrade Iran’s ability to support Russia’s military aggression in Ukraine.” Specifically, BIS has taken the following actions targeting Iranian UAVs.

  • BIS has imposed license requirements for a subset of generally low-technology (EAR99) items when destined for Iran, Russia or Belarus, regardless of whether a U.S. person is involved in the transaction. Accordingly, BIS has established a new list (Supplement no. 7 to part 746 of the EAR) identifying these EAR99 items by their six-digit Harmonized Tariff Schedule (HTS) subheading and description to allow BIS and other U.S. government agencies to track and quantify these exports. This rule adds 12 entries to the new supplement. BIS notes that these HTS codes cover a greater range of items than those described in existing Export Control Classification Numbers (ECCNs) on the Commerce Control List (CCL), and “will consequently capture items that are designated EAR99 (i.e., not specifically described on the CCL).” The items will be subject to the license requirements under both the new Iranian FDP rule and revised Russia/Belarus FDP Rule, as described below. BIS has indicated that an HTS description under supplement no. 7 is only intended to assist exporters with their Automated Export System (AES) filing responsibilities and, importantly, adds that if an item is classified under any 10-digit Schedule B, or 8-digit HTS code beginning with the six-digit HTS code identified in supplement no. 7 to part 746, then it is subject to the license requirements.
  • BIS has created a new “Iran Foreign Direct Product (FDP) Rule” (Iran FDP rule) specific to Iran for items in certain categories of the CCL and EAR99 items identified in the new supplement no. 7. The Iran FDP rule is modeled after the Russia/Belarus FDP rule, but with slight differences to make the Iran FDP rule more narrowly targeted at Iran’s UAV activities of concern. The Iran FDP rule establishes jurisdiction over foreign-produced items that are the direct product of U.S.-origin software or technology and classified in Categories 3 through 5 and Category 7 of the CCL or are produced by a plant or major component of a plant which itself is the “direct product” of such software or technology.  The new rule also includes in its product scope foreign-produced items identified in supplement no. 7 to part 746, including items designated EAR99. 
  • BIS has revised and expanded the existing Russia/Belarus FDP rule to include items identified in the new supplement no. 7 list to part 746, even when such items are designated as EAR99. Such foreign-produced items have been found in UAVs containing parts and components branded U.S. or U.S.-origin (although they may not actually be U.S. branded or U.S.-origin). This revision is intended to ensure that U.S. products exported abroad are not available for shipment to Iran for use in the manufacture of UAVs being used by Russia in Ukraine. For additional background on the Russia/Belarus FDP rule see Update of February 25 2022 and Update of March 4, 2022.

This Final Rule is effective on February 24, 2023. However, shipments of items subject to the Final Rule that were en route aboard a carrier to a port of export, reexport, or transfer (in-country), on February 24, 2023, pursuant to actual orders for export, reexport, or transfer (in-country) to or within a foreign destination, may proceed to that destination under such previous eligibility, provided the export, reexport, or transfer (in-country) is completed no later than March 27, 2023.

On February 24, 2023, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued its latest Russia-related determination expanding its use of sanctions authorities to the metals and mining sector of the Russian Federation economy pursuant to section 1(a)(i) of Executive Order (E.O.) 14024. Section 1(a)(i) of E.O. 14024 allows for the blocking of any person determined by the Treasury Secretary to “operate or have operated in the technology sector or the defense and related materiel sector of the Russian Federation economy, or any other sector of the Russian Federation economy as may be determined by the Secretary of the Treasury.” 

This new determination exposes persons in Russia’s metals and mining sector to U.S. sanctions risk and allows for sanctions to be imposed on any individual or entity that may subsequently be determined and designated by OFAC to operate or have operated in this sector. The determination does not automatically impose sanctions on all persons who operate or have operated in the sector. Pursuant to this determination, OFAC did proceed to immediately designate and place on its Specially Designated Nationals (SDN) List four entities involved in Russia’s metals and mining sector. Additional information on these entities is available here. 

In addition, OFAC issued five new FAQs to address implementation of the determination. Importantly, and while OFAC states that it anticipates publishing regulations defining the term “metals and mining sector of the Russian Federation economy,” one FAQ (FAQ 1115) states that the term includes “any act, process, or industry of extracting, at the surface or underground, ores, coal, precious stones, or any other minerals or geological materials in the Russian Federation, or any act of procuring, processing, manufacturing, or refining such geological materials, or transporting them to, from, or within the Russian Federation.” Another FAQ (FAQ 1117) provides information on activities and provision of goods or services to the metals and mining sector that will not be targeted under this determination.

This determination and action complements existing provisions for sanctions against those that operate or have operated in the quantum computing (see Update of September 16, 2022), accounting, trust and corporate formation, management consulting (see Update of May 13, 2022), aerospace, marine, electronics (see Update of March 31, 2022), and defense and related materiel (see Update of March 7, 2022) sectors of the Russian Federation economy.

On February 24, 2023, the Department of Commerce’s Bureau of Industry and Security (BIS) issued three Final Rules addressing Russia’s continued war against Ukraine. One rule expands existing industry sector sanctions and export controls already in place toward Russia and Belarus. The other two rules add Russian and third country entities to the Entity List due to actions “contrary to the national security or foreign policy interests of the United States,” sanctions evasion, and in support of Russia’s defense sector. A White House Fact Sheet notes that these listings “will prohibit the targeted companies from purchasing items, such as semiconductors, whether made in the U.S. or with certain U.S. technology or software abroad. Commerce will also take action alongside G7 partners and allies to align measures on industrial machinery, luxury goods, and other items, as well as issue new restrictions to prevent components found in Iranian drones from making their way onto the battlefield in Ukraine.”

The first Final Rule revises the Export Administration Regulations (EAR) to expand the scope of the existing industry sector sanctions and luxury goods sanctions against Russia and Belarus under 15 C.F.R. Part 746. This rule expands significantly items requiring a license for export to Russia and Belarus and listed on Supplement No. 4 (industrial items designated by HTS codes and Schedule B numbers), Supplement No. 5 (Luxury Goods), and Supplement No. 6 (Various chemicals, biologics and related equipment and quantum computing and advanced manufacturing). These revisions also specify that license applications under these sections of part 746 will continue to be reviewed under a “policy of denial” but does clarify that certain types of license applications will be reviewed on a case-by-case basis to determine whether the transaction in question would benefit the Russian or Belarusian government or defense sector.

Importantly, this Final Rule attempts to address issues facing many U.S. and multinational companies that are curtailing or closing their operations in Russia or Belarus. This rule adds a new case-by-case license review policy for applications for the disposition of items by such companies. BIS states the following:

Companies deciding to curtail or close all operations in Russia puts further pressure on the Russian government and on the Russian and Belarusian defense industrial base, as their departure will hollow out both countries’ industrial capacity and economy, which may lead to further degradation of their defense industrial base. BIS encourages companies to exit the Russian and Belarusian markets and is making these changes to facilitate such decisions. In curtailing or closing operations in Russia or Belarus, many companies and other entities have encountered difficulties, such as issues related to the disposition of items subject to the EAR that may be too large or cost-prohibitive to remove from Russia. The new case-by-case license review policy added by this rule will facilitate the orderly exit of companies and entities from Russia and Belarus in a manner consistent with U.S. national security and foreign policy interests. As discussed above, BIS will review such license application to determine whether the disposition of these items will benefit the Russian or Belarusian government or military.

In the second Final Rule, BIS adds 10 entities (under 13 entries) to the Entity List for acting contrary to the national security or foreign policy interests of the United States. These entities are listed on the Entity List under the destinations of Canada (2), China (5), France (1), Luxembourg (1), Netherlands (1), and Russia (3). These additions are based on information that these companies significantly contribute to Russia’s military and/or defense industrial base. For these entities, BIS has imposed a license requirement for all items subject to the EAR and will review license applications under a “presumption of denial.” In addition, each of these entities are also being placed under Footnote 3 of the Entity List. A footnote 3 designation subjects these entities to the Russia/Belarus-Military End User Foreign Direct Product (FDP) rule.

In the third Final Rule, BIS adds 76 new entities that are being designated as “Russian/Belarusian Military End Users,” which imposes some of BIS’s most severe export restrictions, and effectively prevents them from obtaining items subject to the Export Administration Regulations (EAR), including certain foreign-produced items. These companies have been added due to their support of Russian efforts in occupied areas of Ukraine, for acquiring and attempting to acquire U.S.-origin items in support of Russia’s military, and for other activities contrary to U.S. national security. For these entities, BIS has imposed a license requirement for all items subject to the EAR and will review license applications under a “presumption of denial.” In addition, 66 of the Russian entities qualify as military end users and are also being placed under Footnote 3 of the Entity List. A footnote 3 designation subjects these entities to the Russia/Belarus-Military End User Foreign Direct Product (FDP) rule.

All of these Final Rules are effective on February 24, 2023. However, shipments to any of the new designees on the Entity List that were en route aboard a carrier on February 24, 2023, pursuant to actual orders for export, reexport, or transfer (in-country) to or within a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR). 

For items newly added to the industry sector sanctions and controls, shipments that were en route aboard a carrier on February 24, 2023 may proceed so long as the transaction is completed no later than March 27, 2023.

On February 24, 2023, the first anniversary of Russia’s invasion of Ukraine, the Departments of the Treasury and State implemented further economic sanctions against key industry sectors “in order to further degrade Russia’s economy and diminish its ability to wage war against Ukraine.” These sanctions are being imposed on over 200 individuals and entities, “including both Russian and third-country actors across Europe, Asia, and the Middle East that are supporting Russia’s war effort.” According to a White House Fact Sheet, this effort targets “a dozen Russian financial institutions, in alignment with allies and partners, as well as Russian officials and proxy authorities illegitimately operating in Ukraine. We will sanction additional actors tied to Russia’s defense and technology industry, including those responsible for backfilling Russian stocks of sanctioned items or enabling Russian sanctions evasion. It also includes the targeting of Russia’s future energy capabilities in a manner that does not impact current production to minimize market disruption.”

The additions to the SDN List include:

  • Additional Russian Ministers, officials, senior executive officers and members of the board of directors of the government of the Russian Federation, including Russian Federation governors who have participated in the conscription of Russian citizens to fight in Ukraine.
  • Additional entities and individuals for their roles in operating or having operated in the financial services sector of the Russian Federation economy.
  • Entities and individuals facilitating grain theft and waging war or administering occupied territory on behalf of the Russian Federation.
  • Additional entities operating or having operated in the defense and related materiel sector of the Russian Federation economy, including several nuclear weapons and nuclear power entities.
  • Entities involved in expanding Russia’s future energy production and export capacity, as well as individuals and entities in Russia’s advanced technology sector.
  • Additional companies and Russian vessels operating in the maritime sector of the Russian Federation economy.
  • Multiple individuals and entities associated with the manufacturing of hardware and development of software for Russia’s System for Operational-search Measures (SORM) capabilities, for operating or for having operated in the technology sector of the Russian Federation economy. SORM enables Russia’s domestic and foreign intelligence collection efforts by monitoring and suppression of dissent, and has been installed on infrastructure in occupied parts of Ukraine to further aid Russia’s attempts to integrate Ukraine’s territory into Russia.
  • Entities that produce carbon filter and related advanced materials for Russia’s military-industrial complex.
  • Additional entities operating in the aerospace sector of the Russian Federation economy.
  • Additional entities and individuals operating in the technology and electronics sectors of the Russian Federation economy.

OFAC’s addition of multiple Russian financial institutions is intended to impede “the ability of President Vladimir Putin’s regime to raise capital in support of the war against Ukraine and further isolates Russia from the global financial system.” While Russian banks representing over 80% of total Russian banking sector assets were already sanctioned, OFAC has designated additional financial institutions, including one of the top 10 largest banks by asset value. OFAC has also added several smaller Russian banks as well as wealth management firms, indicating that larger financial actors have relied on such entities “in an attempt to evade sanctions as Russia seeks new ways to access the international financial system.” With the addition of these financial institutions, OFAC has issued or revised several Russia-related General Licenses:

  • Amended Russia General License (GL) GL 8F: Adding certain financial institutions designated on February 24, 2023 to the authorization to process certain energy-related transactions through May 16, 2023.
  • Amended Russia General License GL 13D: Extending the authorization for certain administrative transactions (including the payment of taxes, fees, and receipt of permits, etc.) prohibited by Directive 4 under EO 14024 (which prohibits transactions with the Central Bank of the Russian Federation, the National Wealth Fund, and the Ministry of Finance) from March 7 through June 6, 2023.
  • Russia General License  GL 60: Authorizes the wind down and rejection of transactions involving certain financial institutions designated on February 24, 2023 through 12:01 a.m. EDT, May 25, 2023.
  • Russia General License GL 61: Authorizing the wind down of certain securities and derivatives transactions involving certain financial institutions designated on February 24, 2023 through 12:01 a.m. EDT, May 25, 2023.

Note that certain dealings are specifically not authorized under these general licenses, and therefore each requires close analysis.

The State Department is also imposing visa restrictions on 1,219 members of Russia’s military for actions that threaten or violate the sovereignty, territorial integrity, or political independence of Ukraine, and designating additional Russian military officers for “gross violations of human rights, namely extrajudicial killings. … torture and/or cruel, inhuman, or degrading treatment or punishment.”

Additional information and identifying details on these newly sanctioned entities and persons are available in a State Department Fact Sheet and on OFAC’s website.

As a result of these actions, all property and interests in property of the persons placed on OFAC’s SDN List above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50% or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.

UkraineRussiaFlags

On February 21, 2023, just a few days before February 24, which marks the one-year anniversary of Russia’s invasion of Ukraine, Deputy Secretary of the Treasury Wally Adeyemo spoke on the Biden administration’s “comprehensive strategy to support Ukraine” including ongoing efforts to deny Russia’s ability “to use the money they have to buy the weapons they need” and “to reduce the revenues that President Putin can use to fund his war of choice and prop up Russia’s economy.” Going forward, Deputy Secretary Adeyemo indicated that U.S. export controls and sanctions will continue to prevent Russia from accessing the equipment it needs and that sanctions “will make it harder for the Kremlin to use the remaining resources Russia can access to pay for the weapons they need.”

Adeyemo’s speech provides an overview of the multilateral sanctions and export control that have been put in place by the United States and a coalition of more than 30 nations, and continued efforts to isolate Russia. He stated that the coalition “will force those that fail to implement our sanctions and export controls to choose between their economic ties with our coalition of countries — representing more than half of the world’s GDP — or providing material support to Russia, an economy that is becoming more isolated every day.” While providing no specific actions or further sanctions, Adeyemo indicated that a next step would be countering Russia’s efforts to evade sanctions. These efforts will focus on three elements:

  • Continuing to work closely with allies and partners, especially in the G7 and EU, and using “all of our economic tools to give countries, companies, and individuals a choice: to do business with a coalition representing half of the global economy, or to provide material support to Russia.”
  • Identifying and eliminating “specific channels through which Russia attempts to equip and fund its military” by denying Russia access to dual-use goods being repurposed and used for the war and cutting off manufacturing facilities from inputs needed to fill Russia’s military production gaps. 
  • Pressuring companies and jurisdictions known to be allowing or facilitating evasion including “several of Russia’s neighbors” and other countries who have condemned the invasion of Ukraine but “are falling short of their obligations to enforce the sanctions” the U.S. and wider coalition have imposed.

Additional sanctions are expected as the anniversary date of Russia’s invasion approaches. Adeyemo closed his remarks by stating that the United States is “committed to continuing to support the people of Ukraine and to redoubling our efforts to hold Russia accountable—especially by countering efforts to evade our sanctions.”

On February 10, 2023, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Syria General License (GL) 23 that authorizes until August 8, 2023 all transactions related to earthquake relief efforts in Syria that would otherwise be prohibited by the Syrian Sanctions Regulations under 31 C.F.R. Part 542. The GL makes clear that it covers the processing or transfer of funds, and in a related press release, OFAC clearly states that, “U.S. and intermediary financial institutions should have what they need in GL23 to immediately process all earthquake relief transactions.”

While general authorizations already existed for most activities in support of humanitarian assistance in Syria, OFAC stated that GL 23 “provides the broad authorization necessary to support immediate disaster relief efforts in Syria.” The press release also notes that the Department of the Treasury “will continue to monitor the situation in Syria and engage with key humanitarian and disaster assistance stakeholders, including [nongovernmental organizations, international organizations], and key partners and allies, to understand emerging challenges they may face in delivery of services.”

It should be noted that while GL 23 does authorize transactions with the government of Syria, it otherwise continues to prohibit any transactions with persons or entities who are blocked and on OFAC’s Specially Designated Persons (SDN) List.

As a reminder, 31 C.F.R. Part 569 under the separate Syria-Related Sanctions Regulations at § 569.510 already authorizes the official business of certain international organizations and certain transactions in support of nongovernmental organizations‘ activities. 

UPDATE: On February 21, 2023, OFAC issued a Compliance Guidance with FAQs on how to provide legitimate humanitarian assistance related to earthquake relief to Syria while complying with OFAC sanctions. The FAQs focus mainly on the provision of funds and remittances into Syria as well as providing services to Syria. The guidance also reminds the general public that the Department of Commerce’s Bureau of Industry and Security (BIS) has separate jurisdiction over the export or reexport of most physical items and software to Syria. On February 17, 2023, BIS announced that it would expedite it review of export license applications to both Turkey and Syria that are related to earthquake relief. See Update of February 21, 2023.