Recently, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) sanctioned various individuals and entities connected to Russia’s technology sector and also expanded sanctions against dealings in Russian sovereign debt.  In addition to these immediate actions, President Biden also issued a new Executive Order which will significantly expand OFAC’s authority to impose future sanctions against Russia.


The White House published a Fact Sheet which explains the recent sanctions actions were a response to Russian election interference and cyber-attacks directed at the United States.  A month prior to these sanctions actions, the U.S. National Intelligence Council issued its Foreign Threats to the 2020 U.S. Federal Elections report, which officially concluded that a range of Russian government organizations had attempted to influence the 2020 U.S. presidential election by promoting “misleading or unsubstantiated allegations” through a variety of “online influence actors”.  The U.S. National Intelligence Council determined that Russian President Vladimir Putin and other senior Russian government officials authorized and were aware of these efforts.  The Fact Sheet also includes a statement from the Biden Administration which formally attributes Russia’s Foreign Intelligence Services with responsibility for the SolarWinds cyber attack which affected multiple U.S. businesses and government agencies in the spring of 2020.

SDN List Designations and Sovereign Debt Directive Under New Executive Order 14024

On Thursday, April 15, President Biden issued Executive Order 14024 (“EO 14024”), which gives the U.S. Treasury Department the discretionary authority to impose blocking sanctions on any of the following:

  • Anyone who operates or has operated in the “technology sector or the defense and related materiel sector of the Russian Federation economy” or other sectors of the Russian economy that the U.S. Treasury Department may later decide to sanction after consultation with the U.S. Secretary of State;
  • Anyone who is responsible for or complicit in, or who has directly or indirectly engaged or attempted to engage in any of the following activities (referred to collectively as “malign activities” for ease of reference):
    • Malicious cyber-enabled activities;
    • Interfering in U.S. elections or other foreign governments’ elections;
    • Actions or policies that undermine democratic processes or institutions in the United States or abroad;
    • Transnational corruption;
    • Assassination or infliction of bodily harm against U.S. persons or citizens or nationals of any United States ally or partner;
    • Activities that undermine the peace, security, political stability, or territorial integrity of the United States, its allies, or its partners; or
    • Deceptive or structured transactions or dealings to circumvent any U.S. sanctions;
  • Anyone who is a leader, official, senior executive officer or member of the board of directors of: (i) the Russian government, (ii) an entity that has or whose members have engaged in the above-described “malign activities”, or (iii) an entity that becomes blocked pursuant to EO 14024;
  • Any political subdivision, agency or instrumentality of the Russian government;
  • Anyone who provides material assistance, sponsors, or provides financial, material or technological support for, or goods or services in support of: (i) any of the above-described “malign activities”, or (ii) any person who becomes blocked pursuant to EO 14024;
  • Anyone who is owned or controlled by or who acts or purports to act for or on behalf of, directly or indirectly: (i) the Russian government, or (ii) any person who becomes blocked pursuant to EO 14024;
  • Entities organized under the laws of the Russian Federation or natural persons who are citizens, nationals or ordinary residents of Russia who provide material assistance to foreign governments that are subject to U.S. sanctions; and
  • Entities organized under the laws of the Russian Federation or natural persons who are citizens or nationals of the Russia who are determined by the U.S. Secretary of State to be responsible for or complicit in, or to have directly or indirectly engaged or attempted to engage in cutting or disrupting gas or energy supplies to Europe, the Caucasus or Asia.

Natural persons sanctioned under EO 14024 will be barred from entering the U.S.  To the extent that the Treasury Department seeks to sanction any natural person for engaging in the above-described “malign activities” or for acting as a leader, official, executive officer or director of a Russian government agency or entity that is sanctioned under EO 14024, then EO 14024 further authorizes the Treasury Department to impose identical blocking sanctions on that natural person’s spouse and adult children.

The Treasury Department immediately used its authority under EO 14024 and caused OFAC to publish a new Directive 1 which will prohibit U.S. financial institutions from engaging in activities with the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation and the Ministry of Finance of the Russian Federation starting June 14, 2021 which involve either participation in the primary market for ruble or non-ruble denominated bonds issued by those institutions or lending ruble or non-ruble denominated funds to those institutions.  This EO 14024 Directive 1 represents an extension of OFAC’s existing Russia-Related Directive under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (“CBW Act”), which previously only prohibited U.S. financial institutions from participating in the aforementioned transactions when they were denominated in non-ruble currencies.  OFAC published multiple FAQs on its website in order to explain EO 14024’s new sanctions on Russian sovereign debt, including a clarification that OFAC’s 50 percent rule does not apply to entities owned, directly or indirectly, 50 percent or more by the three (3) entities designated under Directive 1.

Additionally, OFAC used different authorizations under EO 14024 to add six (6) Russian technology companies to its Specially Designated Nationals and Blocked Persons List (the “SDN List”) for “operating in the technology sector of the Russian Federation economy” based on previous support that they had provided to Russia’s Foreign Intelligence Services.

OFAC issued a Press Release which explains its actions under EO 14024 in further detail.

Additional SDN List Designations Related to Election Interference

OFAC separately used authority under existing Executive Orders to add sixteen (16) entities and sixteen (16) individuals to the SDN List for roles that they played in attempting to influence the 2020 U.S. presidential election on behalf of the Russian government.  Many of these entities and individuals were designated for support that they provided to Russia’s Main Intelligence Directorate (the “GRU”) and Russia’s Federal Security Services (the “FSB”), both of whom were previously designated as Specially Designated Nationals by OFAC in 2016.  In a separate Press Release, U.S. Treasury Secretary Janet L. Yellen stated that “ [The U.S. Treasury Department] will target Russian leaders, officials, intelligence services, and their proxies that attempt to interfere in the U.S. electoral process or subvert U.S. democracy.  This is the start of a new U.S. campaign against Russian malign behavior.”

Additional SDN List Designations Related to Crimea

In a third set of SDN List designations, OFAC used preexisting authority to add five (5) individuals and three (3) entities to the SDN List in connection with Russia’s continuing occupation of the Crimea region of Ukraine.  These Specially Designated Nationals consisted of a foreign company and executive involved in construction of the Kerch Strait Bridge between Russia and Crimea, Crimea’s Simferopol SIZO-1 pre-trial detention center and various government officials.  Several of these entities and individuals had already been sanctioned by the EU, the UK, Australia and Canada.  In a Press Release, OFAC’s Director Andrea M. Gacki stated that “These designations impose additional costs on Russia for its forceful integration with Crimea and highlight the abuses that have taken place under Russia’s attempted annexation. The United States remains committed to supporting Ukrainian sovereignty: Crimea is Ukraine.”

Outlook Going Forward

Effective April 15, 2021, U.S. persons are now prohibited from transacting with any of the persons or entities who were named to the SDN List in the recent designations.  OFAC has published a complete list of those consolidated designations at this website.  Those prohibitions will also extend to any entities in which any of the SDN List designees, directly or indirectly, either individually or in the aggregate, hold an ownership interest of 50 percent or more.  As discussed above, the additional sanctions on Russian sovereign debt transactions will take effect on June 14, 2021.

From a longer-term perspective, it appears that Russia’s response to these new sanctions will be the key factor in determining whether or not the Biden Administration implements additional sanctions under EO 14024.  In a Press Call conducted on April 15, senior officials from the Biden Administration stated that:

Importantly, there are elements of [EO 14024] that give us additional authorities that we are not exercising today.  We would prefer not to have to deploy these authorities, but the scope of [EO 14024] and its potential to cause meaningful impact should send a clear signal that continued harmful foreign activities — including further election interference, further malicious cyber activities — are unacceptable, and we are prepared, going forward, to impose substantial and lasting costs if this behavior [by Russia] continues or escalates.

Husch Blackwell continues to monitor EO 14024 and additional US sanctions and export restrictions against Russia.  Should you have any questions or concerns, please contact Cortney MorganGrant Leach or Tony Busch of our Export Controls & Economic Sanctions team.