On August 23rd, 2024, the U.S. Treasury's Office of Foreign Assets Control (OFAC), the U.S. Department of State (State), and the Commerce Department's Bureau of Industry and Security (BIS) acted against Russia's international supply chains.
OFAC and State collectively sanctioned nearly 400 individuals and entities. Of note, this included a substantial focus on targeting non-Russian persons for supporting Russian evasion efforts, including in more than a dozen countries outside of Russia. The pie chart below shows the location of the new non-Russian SDN designees.
In parallel, BIS published two new rules. The first expands Russian and Belarusian sanctions under the Export Administration Regulations (EAR), while the second adds 123 entities to the Entity List.
A summary of BIS' expanded Russian and Belarussian sanctions follows:
- The Russia/Belarus-Military End User (MEU) Foreign-Direct Product (FDP) rule has been changed to include Russia and Belarus procurement entities.
- License requirements have been added for the below types of
EAR99 software:
- Enterprise resource planning (ERP); customer relationship management (CRM); business intelligence (BI); supply chain management (SCM); enterprise data warehouse (EDW); computerized maintenance management system (CMMS); project management software, product lifecycle management (PLM); building information modelling (BIM); computer aided design (CAD); computer-aided manufacturing (CAM); engineering to order (ETO); and software for the operation of computer numerical control (CNC) machine tools.
- This also includes software updates to the software identified above that is subject to the EAR and designated as EAR99.
The bulk of the 123 entities added to the Entity List are being added under the destinations of Russia (63) and China (42). Other destinations include Canada, the Crimea Region of Ukraine, Cyprus, Iran, Kazakhstan, Kyrgyzstan, Turkey, Ukraine, and the UAE.
The SDN designations took immediate effect (albeit with several general licenses allowing for wind-down of activity with certain of the designees), while the Entity List and FDP rule updates took effect on August 27, and the new CNC controls and other corrections take effect September 16.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.