OFAC Actions Re Russia War, Navalny

On Feb. 23, OFAC sanctioned almost 300 individuals and entities.

  • OFAC issued designations marking 2-year anniversary of Russia’s war on Ukraine.
  • Also for death of Aleksey Navalny, opposition politician and anticorruption activist.
  • Released three new, Russia-related Frequently Asked Questions (FAQs 1164-1166).
  • Amended eight others (FAQs 886, 887, 1019, 1022, 1025, 1027, 1092, and 1154).
  • In addition, OFAC issued general licenses related to today's actions, see #201955.
  • In conjunction with actions taken by the US State Dept designating over 500 targets.
  • Designations Overview
  • Largest number of designations imposed since Russia’s full-scale invasion of Ukraine.
  • US State Dept is designating 3 Russian officials in connection with Navalny’s death.
  • Department of Commerce is also adding more than 90 companies to the Entity List.
  • Aim to deny Russia the resources necessary to support its brutal war against Ukraine.
  • Targets including a major cog in Russia’s financial infrastructure; more than two dozen third-country sanctions evaders in Europe, East Asia, Central Asia, and the Middle East
  • Hundreds of entities in Russia’s military-industrial base and other key sectors.
  • Per Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR 587 (RuHSR).
  • Russia Financial Infrastructure
  • OFAC is targeting Russia’s core financial infrastructure, including the operator of the Mir National Payment System and Russian banks, investment firms, and fintechs.
  • National Payment Card System Joint Stock Company (NSPK) is state-owned operator of Mir National Payment System; plays key role in facilitating financial transactions.
  • Mir has allowed Russia to build out a financial infrastructure that enables its efforts to evade sanctions and reconstitute severed connections to international financial system.
  • US has repeatedly emphasized the risks of Mir system to partners around the globe.
  • NSPK is named EO 14024 for operating in financial services sector of Russian economy.
  • OFAC also designated 9 regional financial institutions, including several headquartered in Russian military-industrial base hubs; five investment and venture capital funds.
  • Said funds seek to underwrite development of advanced, next-generation technology.
  • Funds also see to inject domestic and foreign investment into Russian companies.
  • OFAC further named 6 fintechs that provide software and IT solutions to financial firms
  • Sanctions Evasion Facilitators
  • OFAC targeted third-country facilitators whose actions enable Russia's war machine.
  • Targets located across world and include exporters and transhippers of technology. Freight forwarder involved in weapons shipments to Russia, and a transnational money laundering network facilitating the illicit movement of Russian-origin precious metals.
  • In all, OFAC today targeted 26 third-country entities and individuals in 11 countries.
  • Including facilitators in China, Serbia, the United Arab Emirates, and Liechtenstein.
  • Several in China, such as Jiangxi Liansheng Technology, which shipped micro- electronics, optical laboratory accessories, and other technological equipment to Russia
  • Also several in other countries, such as Serbia's Kominvex DOO Beograd, which exported millions of dollars’ worth of goods and equipment to Russian electronics
  • Serbia national Marko Svorcan is named for being the director and owner of Kominvex.
  • Rheingold Edelmetall AG is a Liechtenstein-based precious metals investment firm owned and directed by German nationals Axel Paul Diegelmann and Fritz Diegelmann.
  • Alabuga UAC Procurement Network
  • Network through which Russia acquires and produces unmanned aerial vehicles (UAVs)
  • Russia and Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) have cooperated to finance and produce Iranian-designed one-way attack UAVs.
  • At a newly established a facility in Russia in the Alabuga Special Economic Zone.
  • JSC Special Economic Zone of Industrial Production Alabuga (SEZ Alabuga)
  • This network has facilitated shipments, conducted financial transactions, and engaged in industrial production in support of this cooperation between Russian and Iran.
  • Also Albatros OOO, Limited Liability Company Drake, Alabuga Development OOO.
  • Russia's Military-Industrial Base, Other Sectors
  • Increasing number of entities in Russia are contributing to Russia’s war machine.
  • Due to overheating war economy cannibalizing non-defense-related production. at the
  • Targets weapons production, including entities and individuals such as Russia-based Aktsionernoe Obshchestvo Zavod Elekon and company Joint Stock Company Plant N9
  • Since Feb. 2022, the US has sanctioned over 2,000 Russia-based entities.
  • US Treasury Yellen Remarks
  • Yellen said on this solemn anniversary and Aleksey Navalny’s death in Russian custody are stark and tragic reminders of Vladimir Putin’s brazen disregard for human life.
  • As shown by Ukrainians suffering the costs of Putin's unprovoked war to people across Russia who dare to expose the corrupt abuses that fuel his regime, added Yellen.
  • It’s critical that Congress steps up to join our allies around the world in giving Ukraine the means to defend itself and its freedom against Putin’s barbarous assault.
  • Russia-Related FAQs
  • FAQs 1164, 1165, 1166 clarify scope of sanctions on Russian diamond, jewelry sector.
  • FAQs 886 clarifies scope of specified harmful foreign activities of RUS government.
  • As for FAQ 887, explains Directive 3 prohibitions; FAQ 1092 confirms non-U.S. companies' risk exposure to sanctions for providing military goods, support to Russia.
  • FAQ 1019 explains what is meant by the term, Russian Federation origin; FAQs 1022, FAQ 1025, 1027, and 1154 cover imports, exports, and new investment re Russia.
  • Mar. 2024 OFAC FAQ 1166 Diamond Determination
  • On Mar. 4, 2024, OFAC updated FAQ 1166 regarding prohibition of diamond imports.
  • FAQ 1166 explains the scope of the Diamond Jewelry Determination's prohibitions.

Regulators OFAC; US State Dept; US Treasury
Entity Types B/D; Bank; Corp; Exch; Ins; Inv Co; MSB
Reference OFAC: FAQ 1166, 3/4/2024; PR, List, FAQs 1164, 1165, 1166, 886, 887, 1019, 1022, 1025, 1027, 1092, 1154, 2/23/2024; US Treasury: PR, 2/23/2024; US State Dept: PR, List, 2/23/2024: EO 14024; RuHSR; Citation: 31 CFR 587;
Functions AML; Anti-Bribery; Compliance; Financial; Fraud; Legal; Operations; Reporting; Research; Sanctions; Technology
Countries Iran, Republic of; Russia; Ukraine; United States of America; Cross-Border
Category AML FIU; Central Government
Products Banking; Corporate; Fund Mgt; Insurance; Loan; Payments; Securities
Regions Am
Rule Type Final
Rule Date 2/23/2024
Effective Date 3/4/2024
Rule Id 201949
Linked to Rule :201955
Reg. Last Update 3/4/2024
Report Section AML & Enforcement

Last substantive update on 03/07/2024