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Ukraine: U.S. and EU expand the list of persons subject to sanctions

24 March 2014

This E-Alert provides an update on the U.S. and E.U. sanctions discussed in the Allen & Overy E-Alerts dated March 13, 2014, titled “United States and European Union authorize sanctions relating to situation in Ukraine” and March 18, 2014, titled “U.S. and EU expand sanctions relating to the Ukraine,” (available here) (the March 13 E-Alert and March 18 E-Alert).

In response to the ongoing situation in Crimea and the Ukraine, on March 20, 2014 U.S. President Barack Obama issued a new Executive Order authorizing the U.S. government to impose sanctions (namely visa restrictions and the freezing of U.S. property and assets) on persons operating in key Russian business sectors, including financial services, energy, metals and mining, engineering, and defense and related material (EO 13662).

Additionally, on March 20, 2014 the U.S. government designated 20 individuals and one entity for sanctions under the Executive Order issued on March 17, 2014 (EO 13661). Those designated for sanctions include Bank Rossiya, as well as 16 senior Russian government officials and 4 individuals deemed to be part of the Russian leadership’s inner circle. Several of the designated individuals had already been sanctioned by the European Union.

On March 21, 2014, the European Council agreed to take further action against certain individuals “in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine”. The European Council adopted Implementing Decision 2014/151/CFSP1 (the Implementing Decision) and Implementing Regulation (EU) No 284/20142 (the Implementing Regulation), which expand the list of individuals targeted with a travel ban and a freeze of their assets within the EU. This brings the total number of persons subject to sanctions in the EU in connection with the crisis in Ukraine to 51.

The expansion of U.S. and EU sanctions lists relating to the situation in Ukraine may pose challenges to companies and financial institutions with business dealings involving individuals or entities targeted by these measures. Such challenges may be heightened if the U.S. and EU continue to expand the number of persons designated for sanctions.

New EO 13662 and the designation of sanctioned persons under EO 13661

EXECUTIVE ORDER 13662
EO 13662 authorizes the imposition of sanctions on any person (individual or entity) determined by the U.S. government to:

1. operate in such sectors of the Russian Federation economy as may be determined by the U.S. Secretary of the Treasury, in consultation with the U.S. Secretary of State, including financial services, energy, metals and mining, engineering, and defense and related material;

2. have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to EO 13662; or

3. be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to EO 13662 (all such persons described in (a) through (c), Blocked Persons).
All property and interests in property that are in the U.S. or that are, or come within the possession or control of, any Unites States person3 or Blocked Persons must be blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in. Additionally, the immigrant and nonimmigrant entry into the United States of Blocked Persons is suspended.

EO 13662 prohibits the making of humanitarian donations normally permitted under U.S. law (such as for food, clothing and medicine) by, to, or for the benefit of any Blocked Person, as such donations would “seriously impair (President Obama’s) ability to deal with the national emergency declared in Executive Order 13660, and expanded in Executive Order 13661 and (EO 13662).”
EO 13662 further authorizes the U.S. Secretary of the Treasury, in consultation with the U.S. Secretary of State, to take such actions (including the promulgation of rules and regulations) as may be necessary to carry out the purposes of the Executive Order.

PERSONS DESIGNATED FOR U.S. SANCTIONS UNDER EXECUTIVE ORDER 13661
On March 20, 2014, the following persons were designated for sanctions under EO 13661 and added to the U.S. Department of the Treasury’s Office of Foreign Assets Control’s Specially Designated Nationals (SDN) List:
1. BUSHMIN, Evgeni Viktorovich; Deputy Speaker of the Federation Council of the Russian Federation; Chairman of the Council of the Federation Budget and Financial Markets Committee;
2. DZHABAROV, Vladimir Michailovich; First Deputy Chairman of the International Affairs Committee of the Federation Council of the Russian Federation;
3. FURSENKO, Andrei Alexandrovich; Aide to the President of the Russian Federation;
4. GROMOV, Alexei; First Deputy Chief of Staff of the Presidential Executive Office; First Deputy Head of Presidential Administration; First Deputy Presidential Chief of Staff;
5. IVANOV, Sergei; Chief of Staff of the Presidential Executive Office;
6. IVANOV, Victor Petrovich;
7. KOZHIN, Vladimir Igorevich;
8. KOVALCHUK, Yuri Valentinovich;
9. MIRONOV, Sergei Mikhailovich; Member of the Council of the State Duma; Leader of A Just Russia Party; Member of the State Duma Committee on Housing Policy and Housing and Communal Services;
10. NARYSHKIN, Sergey Yevgenyevich;
11. OZEROV, Viktor Alekseevich; Chairman of the Security and Defense Federation Council of the Russian Federation;
12. PANTELEEV, Oleg Evgenevich; First Deputy Chairman of the Committee on Parliamentary Issues;
13. ROTENBERG, Arkady;
14. ROTENBERG, Boris;
15. RYZHKOV, Nikolai Ivanovich; Senator in the Russian Upper House of Parliament; Member of the Committee for Federal Issues, Regional Politics and the North of the Federation Council of the Russian Federation;
16. SERGUN, Igor Dmitrievich; Lieutenant General; Chief of the Main Directorate of the General Staff (GRU); Deputy Chief of the General Staff;
17. TIMCHENKO, Gennady;
18. TOTOONOV, Aleksandr Borisovich; Member of the Committee on Culture, Science, and Information, Federation Council of the Russian Federation;
19. YAKUNIN, Vladimir;
20. ZHELEZNYAK, Sergei Vladimirovich; Deputy Speaker of the State Duma of the Russian Federation; and
21. BANK ROSSIYA (f.k.a. AKTSIONERNY BANK RUSSIAN FEDERATION).
The following individuals were previously designated under EO 13660 and EO 13660:
1. AKSYONOV, Sergey Valeryevich; acting Prime Minister of Crimea (designated under EO 13660);
2. GLAZYEV, Sergey; Presidential Advisor (designated under the March 17 EO);
3. KLISHAS, Andrei; Chairman of the Russian Federation Council Committee on Constitutional Law, Judicial and Legal Affairs and the Development of Civil Society (designated under the March 17 EO);
4. KONSTANTINOV, Vladimir Andreyevich; Speaker of the Supreme Council of Crimea(designated under EO 13660);
5. MATVIYENKO, Valentina Ivanovna; Federation Council Speaker; Chairman of the Russian Federation Council (designated under the March 17 EO);
6. MEDVEDCHUK, Viktor; leader of Ukrainian Choice (designated under EO 13660);
7. MIZULINA, Yelena; State Duma Deputy; Chairman of the State Duma Committee on Family, Women and Children (designated under the March 17 EO);
8. ROGOZIN, Dmitry Olegovich; Deputy Prime Minister of the Russian Federation (designated under the March 17 EO);
9. SLUTSKY, Leonid; State Duma Deputy; Chairman of the Committee on Affairs of the Commonwealth of Independent States (CIS); First Deputy Chairman of the Committee on International Affairs; Chairman of the Russian World Fund Administration (designated under the March 17 EO);
10. SURKOV, Vladislav Yurievich; Presidential Aide (designated under the March 17 EO); and
11. YANUKOVYCH, Viktor Fedorovych; Former President of Ukraine (designated under EO 13660).
All property and interests in property that are or come within the U.S. or that are or come within the possession or control of any U.S. person of these persons must be blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in. Additionally, the immigrant and nonimmigrant entry into the United States of these persons is suspended. For further discussion of the sanctions authorized by EOs 13660 and 13661, please see the March 13 E-Alert and the March 18 E-Alert.
The EU implementing decision and implementing regulation

FURTHER INDIVIDUALS SANCTIONED
Under the Implementing Decision and the Implementing Regulation, 12 additional individuals are included on the lists of persons subject to a travel ban and a freezing of funds and economic resources set out in the Annex to Decision 2014/145/CFSP (the March 17 Decision) and in Annex I to Regulation (EU) No 269/2014 (the March 17 Regulation).
The inclusion of these 12 individuals brings the total number of persons subject to EU sanctions to 33. The individuals are listed below:
1. AKSYONOV, Sergey Valeryevich; acting Prime Minister of Crimea (designated in the March 17 Decision and Regulation);
2. KONSTANTINOV, Vladimir Andreevich; speaker of the Supreme Council of the Autonomous Republic of Crimea (designated in the March 17 Decision and Regulation);
3. TEMIRGALIEV, Rustam Ilmirovich; Deputy Chairman of the Council of Ministers of Crimea (designated in the March 17 Decision and Regulation);
4. BEREZOVSKIY, Deniz Valentinovich; appointed commander of the Ukrainian Navy on March 1, 2014 (designated in the March 17 Decision and Regulation);
5. CHALIY, Aleksei Mikhailovich; recently acclaimed Mayor of Sevastopol (on February 23, 2014) (designated in the March 17 Decision and Regulation);
6. ZIMA, Pyotr Anatoliyovych; appointed as the new head of the Crimean Security Service (designated in the March 17 Decision and Regulation);
7. ZHEREBTSOV, Yuriy; Counsellor of the Speaker of the Verkhovna Rada of Crimea (designated in the March 17 Decision and Regulation);
8. TSEKOV, Sergey Pavlovych; Vice Speaker of the Verkhovna Rada (designated in the March 17 Decision and Regulation);
9. OZEROV, Viktor Alekseevich; Chairman of the Security and Defense Committee of the Federation Council of the Russian Federation (designated in the March 17 Decision and Regulation);
10. DZHABAROV, Vladimir Michailovich; First Deputy Chairman of the International Affairs Committee of the Federation Council of the Russian Federation (designated in the March 17 Decision and Regulation);
11. KLISHAS, Andrei Aleksandrovich; Chairman of the Committee on Constitutional Law of the Federation Council of the Russian Federation (designated in the March 17 Decision and Regulation);
12. RYZHKOV, Nikolai Ivanovich; Member of the Committee for Federal Issues, Regional Politics and the North of the Federation Council of the Russian Federation (designated in the March 17 Decision and Regulation);
13. BUSHMIN, Evgeni Viktorovich; Deputy Speaker of the Federation Council of the Russian Federation (designated in the March 17 Decision and Regulation);
14. TOTOONOV, Aleksandr Borisovich; Member of the Committee on Culture, Science, and Information of the Federation Council of the Russian Federation (designated in the March 17 Decision and Regulation)
15. PANTELEEV, Oleg Evgenevich; First Deputy Chairman of the Committee on Parliamentary Issues (designated in the March 17 Decision and Regulation);
16. MIRONOV, Sergei Mikhailovich; Member of the Council of the State Duma (designated in the March 17 Decision and Regulation);
17. ZHELEZNYAK, Sergei Vladimirovich; Deputy Speaker of the State Duma of the Russian Federation (designated in the March 17 Decision and Regulation);
18. SLUTSKI, Leonid Eduardovich; Chairman of the Commonwealth of Independent States Committee of the State Duma of the Russian Federation (designated in the March 17 Decision and Regulation);
19. VITKO, Aleksandr Viktorovich; Commander of the Black Sea Fleet; Vice-Admiral (designated in the March 17 Decision and Regulation);
20. SIDOROV, Anatoliy Alekseevich; Commander of Russia’s Western Military District (designated in the March 17 Decision and Regulation);
21. GALKIN, Aleksandr; Commander of Russia’s Southern Military District (designated in the March 17 Decision and Regulation);
22. ROGOZIN, Dmitry Olegovich; Deputy Prime Minister of the Russian Federation (designated in the Implementing Decision and Regulation);
23. GLAZYEV, Sergey; Adviser to the President of the Russian Federation (designated in the Implementing Decision and Regulation);
24. MATVIYENKO, Valentina Ivanova; Speaker of the Russian Federation Council (designated in the Implementing Decision and Regulation);
25. NARYSHKIN, Sergei Evgenevich; Speaker of the Russian Federation State Duma (designated in the Implementing Decision and Regulation);
26. KISELYOV, Dmitry Konstantinovich; Appointed as Head of the Russian Federal State News Agency "Rossiya Segodnya" (designated in the Implementing Decision and Regulation);
27. NOSATOV, Alexander Mihailovich; Deputy-Commander of the Black Sea Fleet, Rear-Admiral (designated in the Implementing Decision and Regulation);
28. KULIKOV, Valery Vladimirovich; Deputy-Commander of the Black Sea Fleet, Rear Admiral (designated in the Implementing Decision and Regulation);
29. SURKOV, Vladislav Yurievich; Aide to the President of the Russian Federation (designated in the Implementing Decision and Regulation);
30. MALYSHEV, Mikhail; Chair of the Crimea Electoral Commission (designated in the Implementing Decision and Regulation);
31. MEDVEDEV, Valery; Chair of Sevastopol Electoral Commission (designated in the Implementing Decision and Regulation);
32. TURCHENYUK, Lt. Gen. Igor; Commander of the Russian forces in Crimea (designated in the Implementing Decision and Regulation); and
33. MIZULIN, Elena Borisovna; Deputy in the Russian Federation State Duma (designated in the Implementing Decision and Regulation).
This is in addition to the original group of 18 individuals targeted by EU sanctions in early March (on the basis they were part of, or linked to, the deposed Ukrainian government). These are:
1. YANUKOVYCH, Viktor Fedorovych; former President of Ukraine;
2. ZAKHARCHENKO, Vitalii Yuriyovych; former Minister of Internal Affairs;
3. PSHONKA, Viktor Pavlovych; former Prosecutor General of Ukraine;
4. YAKYMENKO, Oleksandr Hryhorovych; former Head of Security Service of Ukraine;
5. PORTNOV, Andriy Volodymyrovych; former Adviser to the President of Ukraine;
6. LUKASH, Olena Leonidivna; former Minister of Justice of Ukraine;
7. KLIUIEV, Andrii Petrovych; former Head of Administration of President of Ukraine;
8. RATUSHNIAK, Viktor Ivanovych; former Deputy Minister of Internal Affairs of Ukraine;
9. YANUKOVYCH, Oleksandr Viktorovych; son of former President of Ukraine;
10. YANUKOVYCH, Viktor Viktorovych; son of former President of Ukraine;
11. PSHONKA, Artem Viktorovych; son of former Prosecutor General, Deputy Head of the faction of Party of Regions in the Verkhovna Rada of Ukraine;
12. KLIUIEV, Serhii Petrovych; businessman, brother of Mr. Andrii Kliuiev;
13. AZAROV, Mykola Yanovych; Prime Minister of Ukraine until January 2014;
14. AZAROV, Oleksii Mykolayovych; son of former Prime Minister Azarov;
15. KURCHENKO, Serhiy Vitaliyovych; businessman;
16. TABACHNYK, Dmytro Volodymyrovych; former Minister of Education and Science of Ukraine;
17. BOHATYRIOVA, Raisa Vasylivna; former Minister of Health of Ukraine; and
18. KALININ, Ihor Oleksandrovych; former Adviser to the President of Ukraine.

IMPACT OF THE LATEST CHANGES
The recent Implementing Decision does not provide for new sanctions. It simply adds to the list of individuals subject to the sanctions set out in the March 17 Decision, which consist of a travel ban and an asset freeze.
The Implementing Regulation follows a similar approach and simply adds further names to the list in the March 17 Regulation. These individuals are, therefore, subject to an asset freeze (the regulations do not impose travel bans).
The sanctions imposed by the March 17 Decision and Regulation are discussed in more detail in our March 18 E-Alert.

Further information

Our global sanctions team continues to track the situation closely and is advising clients across the globe, in the United States, Europe, Russia and elsewhere, on how best to manage their particular positions and be prepared to adjust as circumstances change. A more detailed discussion regarding the implications of U.S. and EU sanctions relating to the situation in Ukraine can be found in the March 13 E-Alert and the March 18 E-Alert. For further information, or to discuss how U.S. or EU sanctions relating to the situation in Ukraine may impact your business or commercial relationships, please contact one of the individuals listed below or your usual contact at Allen & Overy.


1 Council Implementing Decision 2014/151/CFSP of 21 March 2014 implementing Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.

2 Council Implementing Regulation (EU) No 284/2014 of 21 March 2014 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.
3 “United States person” is defined by EO 13662 to mean any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.