On Tuesday, 20 May 2014, the Office of Foreign Assets Control (“OFAC”) in the US Treasury Department announced its second group of “Specially Designated Nationals” (“SDNs”) related to the death of Russian lawyer Sergei Magnitsky and added 12 Russian individuals to the US SDN List pursuant to the Sergei Magnitsky Rule of Law Accountability Act of 2012 (“Magnitsky Act”). The first group of SDNs blocked pursuant to the Magnitsky Act was announced by OFAC on 12 April 2013 and included 18 individuals.
“U.S. Persons” are now prohibited from dealing (directly or indirectly) with these SDNs and any entities 50% or more owned by these SDNs. “U.S. Persons” include (i) entities organized under U.S. laws and their non-U.S. branches, (ii) individuals or entities in the United States, or (iii) U.S. citizens or permanent resident aliens (“Green Card” holders) wherever located or employed. Non-U.S. Persons, including separately incorporated foreign subsidiaries of U.S. companies, may be subject to U.S. jurisdiction if they cause any SDN-related transactions to occur in whole or in part in the United States.
The Magnitsky Act requires that sanctions be imposed on individuals:
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determined to be responsible for the detention, abuse, or death of Sergei Magnitsky, who died in 2009 while detained in a Moscow prison after uncovering fraud involving Russian tax officials;
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who have participated in efforts to conceal the legal liability for, or who have financially benefited from, the detention, abuse, or death of Magnitsky, or who were involved in the criminal conspiracy he uncovered; or
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determined to be responsible for extrajudicial killings, torture, or other gross human rights violations committed against persons seeking to expose illegal activity carried out by Russian government officials or seeking to obtain, exercise, defend, or promote internationally recognized human rights and freedoms in Russia.
The Magnitsky Act sanctions are separate from the recent US sanctions imposed against Russian individuals and entities related to the crisis in Ukraine. Previous blog posts about the Ukraine-related sanctions imposed by the US Government are available here.
The twelve SDN individuals announced on 20 May are:
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Dr. Larisa Litvinova
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Dr. Dmitry Kratov
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Dr. Alexandra Gauss
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Fikret Tagiyev
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Igor Alisov
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Andrei Krechetov
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Viktor Markelov
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Dmitry Klyuev
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Vladlen Stepanov
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Vyachelsav Khlebnikov
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Umar Sugaipov and
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Musa Vakhayev
