On Thursday, September 14, the U.S. Department of the Treasury’s Office of Foreign Assets (“OFAC”) imposed nearly 100 sanctions on Russian elites and Russia’s industrial base, financial institutions, and technology suppliers. The United States Secretary of the Treasury, Janet Yellen, stated that:
“[T]he United States is continuing our relentless work to target Russia’s military supply chains and deprive Putin of the equipment, technology, and services he needs to wage his barbaric war on Ukraine. . . We have also made clear that those individuals and entities who profit from invasion and their proximity to the Kremlin will be held accountable, and today’s cations show our global reach in imposing severe costs on Putin’s oligarchs.”
These wide-ranging designations demonstrate OFAC’s continued focus on individuals and entities benefiting from, supporting, and/or sustaining Russia’s war in Ukraine. In the designation, OFAC targeted technology supply chains, Russian elites who are or have been linked to the Russian defense sector, the industrial base and construction sector, the extractives and future extractives industries, and the international banking system. All of the entities were designated under Executive Order 14024, either for operating or having operated in various sectors of the Russian Federation economy, or as a result of a business or other relationship with a blocked entity.
As a result of this action, all property and interests in property of the persons above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.
Russian Technology Supply Chains
OFAC has continued to target Russia’s technology supply chains, and designated multiple individuals and entities that enable, or attempt to enable, Russia’s ability to procure high-tech and dual-use goods.
Siberica and Luminor Network
The Siberica and Luminor Network is a Finland-based network that specializes in shipping foreign electronics to Russia-based end-users. Per OFAC, the two Finland-based logistics firms Siberica Oy (Siberica) and Luminor Oy (Luminor) have sent a wide variety of electronics into Russia, including UAV cameras, high-performance optical filters, and lithium batteries. Aside from designating Siberica and Luminor, OFAC also designated French national Gabriel Temin, Siberica’s owner, and Estonian national Catherine Esther Temin, board member of Siberica.
OFAC also designated multiple Russian entities importing directly from Luminor, including a Russia-based supplier of products and materials for aviation, technical, and industrial purposes for airlines, railway transport, and enterprises of Russia’s military-industrial complex, a Russia-based company specializing in development of digital optical systems, with clients in the defense, mining, and railway sectors, two Russia-based companies offering freight transportation services, and a Russia-based wholesaler of computers, software, machinery, and industrial equipment.
Per OFAC, Russia continues to rely on third-country entities to keep importing much-needed dual-use goods to enable its war in Ukraine. In the September 14 announcement, OFAC designated two Türkiye-based entities:
- Margiana Insaat Dis Ticaret Limited Sirketi, which OFAC believes has made hundreds of shipments to Russia-based entities Limited Liability Company SMT-iLogic and Saturn EK OOO. OFAC has identified these shipments have included High Priority Items of the kind recovered in multiple Russian weapons systems used against Ukraine, including the Kalibr cruise missile, the Kh-101 cruise missile, and the Orlan-10 UAV.
- Demirci Bilisim Ticaret Sanayi Limited Sirketi, founded in March 2022, which OFAC believes has sent sensors and measuring tools into Russia.
OFAC also designated multiple related to Russia-based entity Limited Liability Company AK Microtech, which was designated on July 20, 2023. These entities include AKM’s owner and director, Russian national Andrei Rostislavovich Khokhlun (Khokhlun), as well as two companies owned by Khokhlun: Russia-based Limited Liability Company Keko R and Slovenia-based Arktec Tehnologije na Podrocju Elektronike doo.
Russian Electronics and Technology Companies
OFAC designated multiple Russia-based entities under E.O. 14024 for operating or having operated in the electronics sector of the Russian Federation economy, including OOO Enkor Grupp, Nauchno Proizvodstvennoe Predpriyatie Itelma, OOO Makro Grupp, Limited Liability Company Streloi, Vertikal Limited and its general director Ilya Andreevich Buzin, and OOO VMK.
OFAC also designated multiple other Russia-based entities, including entities that develop and manufacture semiconductor devices, dual-use microchips, electronic aviation components, electronic hardware and parts, computer equipment, processing systems, software, and information security-related products.
Russian Elites and the Defense Sector
With this announcement, OFAC continues to target Russian elites and firms that benefit from their ties to Russia’s defense sector, military-industrial complex, and affiliation with the Kremlin. These Russia-based entities include entities include a major rolling stock manufacturer, a military aerospace manufacturer, aviation equipment manufacturers and other military materiel manufacturers, along with various Russian individuals who own or are otherwise involved with these entities.
Russian Industrial Base and Construction Sector
OFAC further targeted multiple Russian manufacturing and construction firms to underscore the commitment made by G7 leaders back in May 2023. These entities wre designated under E.O. 14024 for operating or having operated in the manufacturing and/or construction sectors of the Russian Federation economy, and include Joint Stock Company Avtovaz, Gaz Group, Joint Stock Company HMS Group, Kirovsky Zavod Public Joint Stock Company, Kriogenmash OAO, Joint Stock Company Moscow Automotive Factory Moskvich, JSC Power Machines, Publichnoe Aktsionernoe Obschestvo Sollers, Limited Liability Company Machine Building Plant Tonar, Joint Stock Company United Metallurgical Company, Open Joint Stock Company Tikhoretsk Machine Construction Plant V.V. Vorovsky, Aktsionernoe Obshchestvo Mosinzhproekt, Russian Highways State Company, and Transstroimekhanizatsiya Limited Liability Company.
Russian Extractives Industry and Future Extractives Capabilities
OFAC targeted multiple Russian-based entities involved in extractive industries that contribute to Russia’s future energy revenues, including companies that manufacture automotives, industrial pumps and compressors, machinery and steel products, equipment related to industrial gases, turbines, and various civil engineering and construction firms.
OFAC also designated Wagner Group official and Russian national Vitalij Viktorovic Perfilev, who is currently serving as the national security advisor to the President of the Central African Republic, due to his connection to the Wagner Group. Six U.S. agencies had previously issued a business risk advisory regarding the Wagner group’s exploitation and profiteering from the sub-Saharan African Gold sector.
Russian Access to the International Financial System
Finally, OFAC targeted multiple Russian-based financial services entities, including banks, wealth management consulting, auditing, and investment firms, to curtail Russia’s access to the international financial system. The designated entities include Joint Stock Commercial Bank Ak Bars Public Joint Stock Company and Obshchestvo s Ogranichennoi Otvetstvennostyu Kommercheski Bank Sinko Bank, two Russian banks.
For the entire list of newly-designated entities, see OFAC’s Press Release.
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