The Trump administration strengthened U.S. sanctions against Russia through the issuance of a new Executive Order, the implementation of restrictions against a company and individual for their "significant transactions" with a Russian arms exporter and identification of additional Russian individuals and entities that could trigger future sanctions.

The Executive Order delegates authorities to the Secretaries of State and the Treasury to implement sanctions set forth in certain sections of the Countering America's Adversaries Through Sanctions Act ("CAATSA"). In particular, the Executive Order provides authority to impose a menu of 12 different types of sanctions in response to specified conduct. This includes, pursuant to CAATSA section 231, "significant transactions" with individuals and entities identified by the Department of State on its List of Specified Persons ("LSP") operating for or on behalf of the defense or intelligence sectors of the government of the Russian Federation.

The authorities delegated in the Executive Order were put to immediate use with the sanctioning of the Chinese entity Equipment Development Department ("EDD") and its director, Li Shangfu, for knowingly engaging in significant transactions with the Russian arms exporter Rosoboronexport. Among other things, the sanctions imposed on EDD and Li block all of their property and interests in property subject to U.S. jurisdiction.

Finally, the Department of State named an additional 30 individuals and three entities to the LSP. Going forward, any "significant transactions" knowingly entered into with these persons may give rise to sanctions pursuant to CAATSA section 231.

Commentary / James Treanor

Like the recent Executive Order authorizing sanctions for election meddling, the new CAATSA-related Order and actions by the Departments of State and the Treasury may be part of an effort to forestall action by Congress legislatively requiring more stringent sanctions against Russia. The sanctions imposed on EDD and its director also represent the first prohibitions imposed under CAATSA section 231, providing observers with at least one example of a "significant transaction."  No one would mistake EDD's purchase of advanced fighter jets and air defense systems—the subject of its deal with Rosoboronexport—for an "insignificant transaction," and the EDD example in no way sets a "floor" for what may be determined to be a "significant transaction" in the future.  As a senior administration official commented during a conference call with members of the press, each transaction will be considered on its own merits, taking into account its financial size, national security implications, and "any other circumstances that may be relevant at the time."

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