U.S. Issues Expansive New Sanctions to Further Isolate Russia’s War Economy

June 17, 2024

In conjunction with the meeting of G7 leaders last week in Italy, the United States issued another round of sanctions and export controls to intensify pressure on Russia. These measures, issued by the Department of the Treasury’s Office of Foreign Assets Control (OFAC), the Department of State, and Department of Commerce’s Bureau of Industry and Security (BIS), aim to further isolate Russia’s war economy from the international financial system and implement additional export control measures against Russia and Belarus.  We provide a brief summary of these changes below.


Together with the Department of State, OFAC sanctioned more than 300 individuals and entities whose products and services enable Russia to sustain its war efforts and evade sanctions. OFAC also increased its focus on Russia’s financial system, authorized the imposition of secondary sanctions on foreign financial institutions, and prohibited certain information technology (IT) transactions.

Additions to the Specially Designated Nationals List (SDN List)

OFAC added over 300 entities and individuals to the SDN List. These designations target entities that currently operate or previously operated in the defense and related materiel, manufacturing, technology, transportation, or financial services sectors of the Russian economy. They also target transnational supply chains and similar networks that attempt to evade sanctions using convoluted schemes to move money and other valuable goods and assets. Other targets include entities involved in gold laundering, liquefied natural gas (LNG) projects, and Russian production of unmanned aerial vehicles (UAVs). These entities are located in Russia and numerous third countries, including Belarus, the British Virgin Islands, Bulgaria, China, Kazakhstan, the Kyrgyz Republic, Serbia, South Africa, Türkiye, and the United Arab Emirates (UAE).

Secondary Sanctions and the Russian Financial Infrastructure

OFAC broadened the definition of Russia’s military-industrial base to include all persons blocked pursuant to Executive Order (E.O.) 14024. Foreign financial institutions now risk being sanctioned for conducting or facilitating significant transactions, or providing any service, involving any person blocked pursuant to E.O. 14024, including designated Russian banks, such as VTB Bank Public Joint Stock Company and Public Joint Stock Company Sberbank of Russia. OFAC published an updated Compliance Advisory to provide additional guidance to foreign financial institutions.

Sanctions were also placed on significant components of Russia’s financial infrastructure, including the Moscow Exchange (MOEX), the National Clearing Center (NCC), the Non-Bank Credit Institution Joint Stock Company National Settlement Depository (NSD), Gas Industry Insurance Company Sogaz, and Joint Stock Company Russian National Reinsurance Company (RNRC). These sanctions target the architecture of Russia’s financial system to restrict Russia’s ability to access international materials and markets.

Prohibition on Software and IT-Related Services

OFAC issued a new determination under E.O. 14071 prohibiting the supply to any person in Russia of (1) IT consultancy and design services and (2) IT support services and cloud-based services for enterprise management software and design and manufacturing software. This determination, which will take effect on September 12, 2024, provides exceptions for services provided to entities located in Russia that are owned or controlled, directly or indirectly, by a U.S. person. Also excluded are services in connection with the wind down or divestiture of an entity located in Russia that is not owned or controlled, directly or indirectly, by a Russian person, and services for software that is licensed or authorized by the Department of Commerce (or that would be eligible for license or authorization if it were subject to the Export Administration Regulations (EAR)).

FAQs and General Licenses

Eight new FAQs and ten amended FAQs provide additional detail on these new sanctions, such as IT-related definitions and illustrative examples of activities that would or would not be authorized.

OFAC has also issued six new General Licenses (GL) that reflect these changes to Russia sanctions. GL 99GL 100, and amended GL 8J authorize certain transactions involving MOEX, NCC, NSD, or any entity in which one of these entities owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest. GL 98 authorizes the wind down of transactions with certain other blocked entities. GL 25D authorizes certain transactions relating to the receipt or transmission of telecommunications involving Russia and the provision of certain services incident to the exchange of communications over the internet. GL 6D authorizes transactions related to certain agricultural and medical activities, including those involving the provision of information technology and software-related services.

Department of State

The Department of State imposed sanctions on more then 100 individual and entities. These sanctions are designed to disrupt sanctions evasion and backfilling, targeting producers, exporters, and importers of items critical to Russia’s military-industrial base located in third countries including China, the UAE, the Kyrgyz Republic, Türkiye, and Singapore. The Department also sanctioned entities involved in the development of Russia’s future energy production and export capacity, such as those involved in the Vostok Oil project and a new LNG project in Murmansk, Russia. Also targeted are the metals and mining industry and State Atomic Energy Corporation Rosatom (Rosatom) subsidiaries.

Additional designations target Russia’s defense industrial base, incorporating sanctions on Belarusian entities supporting Russia’s war machine, as well as malign authorities and elites responsible for the forced transfer and deportation of Ukrainian children.


BIS issued four sets of changes to the EAR in its latest rule. These include:

  • Additional export control measures against Russia and Belarus

BIS expanded the Russian and Belarusian industry sector sanctions by adding 522 Harmonized Tariff Schedule (HTS)-6 Code entries to supplement no. 4 to part 746 of the EAR. These EAR99 items will now require a license for export to Russia and Belarus, consistent with the objective to undermine Russia’s and Belarus’s industrial bases and their ability to continue to support Russia’s military aggression in Ukraine. To further limit Russia’s access to items of potential military significance, BIS placed additional restrictions on riot control agents and certain EAR99-designated software, and also narrowed the scope of eligible commodities and software under License Exception Consumer Communications Devices (CCD) for Russia and Belarus. Exceptions for agricultural and medical use are available.

  • Consolidation of Russia and Belarus sanctions into a single section

All license requirements for exports, reexports, and transfers (in-country) to or within Russia and Belarus are being consolidated into a revised and expanded section 746.8 of the EAR. BIS also compiled a resource guide to assist with Russia compliance.

  • Additions to the Entity List and changes to the Entity List structure

Although additions to the Entity List are common, the most recent additions mark the first time that BIS has added addresses without an associated entity name. BIS may identify by address an entity (or multiple entities) on the Entity List to more effectively combat unlawful diversion and to incentivize a stronger awareness of export compliance among the corporate service provider industries that facilitate trade through shell companies. The listing of high diversion risk addresses on the Entity List triggers a license requirement for all entities who use that address.

  • Confirmation of the standard used when revising, suspending, or revoking EAR license exceptions and clarification regarding control status of fasteners under Russian and Belarusian sanctions

This final rule adds text to confirm (and render explicit) the fact that BIS has broad authority to make revisions, suspensions, or revocations that apply to specific entities or take action that affects all transactions involving a particular destination.

Lastly, this final rule adds language to supplement nos. 2, 4, 5, and 7 to part 746 to clarify that fasteners  (e.g., screws, bolts, nuts, etc.) classified in one of the HTS-6 Codes specified for control in a particular supplement do not qualify for the exclusion for fasteners.


This latest package further expands the reach of Russia-related sanctions and export controls, including through foreign financial institutions and entities across numerous third countries. Companies should heighten their due diligence to account for these and future actions the U.S. and its allies may take as Russia continues to wage war in Ukraine.

Contact us if you have questions about these new sanctions and export control developments or their potential impact on your business.