In response to Russia's invasion of Ukraine in February 2022, the Department of Commerce, Bureau of Security and Industry issued two final rules to sanction Russia and Belarus.  Essentially, the new US rules (1) restrict exports of military or “dual-use” technology to Russia and Belarus; (2) block doing business with certain Russian banks and financial institutions; (3) sanction certain regime elites and business executives close to the Russian Government.

These final rules add new license requirements for all Export Control Classification Numbers (ECCNs) in Categories 3-9 of the CCL. Certain of these items, in 58 ECCNs with unilateral controls (including certain microelectronics, telecom items, sensors, navigation equipment, avionics, marine equipment, and aircraft components), were not previously controlled by Russia or Belarus.

Under the stringent licensing review policy being implemented, applications for the export, reexport, or transfer of items that require a license for Russia or Belarus will be reviewed under a policy of denial.

Certain partner countries have also committed to implementing substantially similar measures.  Exports reexports, and transfers from the following countries are not subject to these rules: Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, New Zealand, Poland, Portugal, Romania, Slovakia, Slovenia, South Korea, Spain, Sweden, and the United Kingdom

Commerce also added 120 Entities in Russia and Belarus to the Entity List, Further Limiting the Russian and Belarusian Militaries Access to Items that Support Aggression Against Ukraine, BIS issued a final rule adding 120 entities to the Entity List.  Ninety-five (95) entities are being added as military end users under the destinations of Belarus (24 entities) and Russia (71 entities) for acquiring and attempting to acquire items subject to the EAR in support of Belarus's and Russia’s militaries.  These parties are being effectively cut off from the inputs necessary to sustain Putin's war and show that the US has the capabilities to detect, identify, and restrict parties in Russia, Belarus, or elsewhere that seek to support that effort.

In addition to the new Department of Commerce rules, the US Department of Treasury, and Office of Foreign Asset Controls, also issued new financial sanctions against Russia.

Do you export, or plan to export goods outside the United States?  Maybe you do business with international banks or financial institutions? 

If so, you may be exposed to new, strict export and financial controls and sanctions placed on Russia and Belarus, in response to Russia’s invasion of Ukraine.  These export control rules also cover the transshipment to Russia from third countries – so even if you do not believe you are directly exporting to Russia or Russian individuals, you must verify that your customer will not do so, and provide proof with an end-use and end-user certificate.

The fines and penalties for violating these export rules are severe – both civil and criminal.  You could be forced to pay up to $335,000 for each civil violation, more than $1,000,000 per criminal violation, or twice the total amount of the transaction.  In addition to monetary penalties, you could be denied your export privileges and suffer extensive reputational damage.  You could also be subject to a lengthy prison sentence if found to be responsible for these violations.

This webinar will closely examine the specific export and financial sanctions against Russia and Belarus, and show you how to reduce your exposure to these new penalties by being compliant.

Specifically, this webinar will provide you with a basic, “Russian Sanctions Compliance Program” for you to implement into your import-export procedures.