US sectoral and export restrictions
On 19 May 2023 the US Department of State imposed sanctions on a number of entities operating in certain industries, including shipbuilding and ship repair, the development of advanced geophysical exploration and engineering software, accounting services, etc., in support of Russia’s energy sector (Bashnipineft, Inkomneft, Federal State Unitary Enterprise “Hydrographic Company”, et al.).
The Department of State also extended sanctions to entities and individuals involved in the development of future energy projects and associated infrastructure, such as the Port of Indiga, a flagship project in Russia’s Arctic territory, and others.
US sanctions have also been imposed on entities that may potentially be linked to the procurement of engines and individual components for the manufacture of the Orlan drone (Novo Blockchain Consultoria LDA from Macau, the Chinese company Beijing Xinghua Hengcheng Technology Development Company Limited, et al.).
The US Department of Commerce is significantly expanding the list of entities
that are subject to export controls (restrictions on the supply of certain goods to those entities, requirements to obtain additional licenses, etc.) and is adding 71 entities (69 Russian companies, one from Armenia and one from Kyrgyzstan) to the Entity List with a view to limiting Russia’s general access to goods (Military Industrial Company LLC, Tekhmash, Khabarovsk Shipbuilding Yard, et al.).
The US Department of Commerce has also extended the list of goods (hairdryers, irons, dishwashers, sewing machines, coffee makers, articles of wool and cotton, ceramic and glass articles, et al.) that are subject to limitations on export to Russia
.Prohibition of certain kinds of services
OFAC has already established that persons operating in certain sectors of the Russian economy (quantum computing, the establishment of trusts and corporations, consulting services, financial services, et al.) may have blocking sanctions imposed on them in accordance with Executive Order No. 14024 of the US President
On 19 May 2023 OFAC issued a Determination Pursuant to Executive Order No. 14024
according to which blocking sanctions may be applied to persons operating in the following sectors of the Russian economy:
- Architecture (designing, preparing sketches, reports, studies, assessments, site plans, working drawings, specifications, cost estimates, et al.);
- The engineering sector (designing, installing, preparing process flow diagrams, drawings, et al.);
- The construction sector (the creation of any buildings and structures, the development and construction of residential and non-residential, buildings, et al.);
- The manufacturing sector (the creation and modification of goods using machinery or manual labour, et al.);
- The transportation sector (transportation of goods, services, or technology, the conveyance of people, et al.).
In addition, OFAC has issued a Determination Pursuant to Executive Order No. 14071
, which prohibits the provision directly from the US or by a US person, wherever located, of architecture and engineering services to any entity located in Russia. The prohibition takes effect from 18 June 2023.