The Biden Administration issued another round of sanctions against Russia in its final days, with less than a week left in the Administration. This followed on the heels of major sanctions imposed by OFAC on Russia’s energy sector just five days prior – see our blog post on that development here.
Specifically, on January 15, 2025, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and the US Department of State (“State”) sanctioned nearly 250 entities and individuals for evading US-imposed sanctions targeting Russia. OFAC also issued two new General Licenses and reissued another.
OFAC Designations
OFAC added nearly 100 entities to the Specially Designated Nationals List (“SDN List”) pursuant to Executive Order 13662. These parties were designated for their involvement in a sanctions evasion scheme that the US Government determined was established between actors in Russia and the People’s Republic of China to facilitate cross-border payments for sensitive goods. These entities are listed in three separate annexes for operating in various sectors of the Russian economy, including the financial services sector, the energy sector, and the defense sector. These designations also target a Kyrgyz Republic-based financial institution.
Designations made under EO 13662 cannot be revoked without certain Congressional oversight.
US Persons are generally prohibited from dealing, directly or indirectly, with SDNs, entities that are owned 50% or more by one or more SDNs, and their property or property interests. Non-US persons can be held liable for “causing” violations by US Persons involving transactions with SDNs and can also be subject to secondary sanctions risks for providing “material support” to SDNs. Secondary sanctions risks include the risk of being designated as an SDN.
State Designations
State designated more than 150 individuals and entities pursuant to Executive Order 14024. These designations target parties determined to have been producers, exporters, and importers of items critical to Russia’s military-industrial base. Those items include microelectronics and computer numerical control items on the Common High Priority List, as identified by the US Department of Commerce’s Bureau of Industry and Security, alongside the European Union (EU), Japan, and the United Kingdom.
New and Amended General Licenses
OFAC issued two new General Licenses and one amended General License related to this tranche of designations:
- General License 122 authorizes certain wind-down transactions with the newly sanctioned entities listed under paragraph (a) of the General License. These transactions are authorized through 12:01 a.m. EST on March 1, 2025, provided that payments to blocked parties are made into blocked accounts.
- General License 123 authorizes, subject to conditions listed in the General License, certain debt- or equity-related transactions involving Wafangdian Bearing or any entity it owns by 50% or more. These transactions are authorized through 12:01 a.m. EST on March 1, 2025.
- Amended General License 26A replaces General License 26 and updates the list of parties eligible for this general license, which is described in our blog post of January 14 regarding the January 10 sanctions targeting the Russian energy sector.
The author acknowledges the assistance of Ryan Orange with the preparation of this blog post.
