The following is an overview of various export and import measures that have recently been put in place against Russia and Belarus.
- Financial sanctions, announced by the Treasury and State Department, target more than 100 entities and 50 people, including Russia’s State Corporation Rostec, a “massive” state-owned technological, aerospace and military-industrial enterprise. Treasury has also issued several new general licenses.
- The Commerce Department added 36 entities to the Entity List, including six for supporting Russia’s military. The Entity List additions —which include companies located in China, Pakistan, the United Arab Emirates and elsewhere—take effect June 28.
- The Bureau of Industry and Security (BIS), on May 20, suspended the export privileges of Russian airline, Rossiya Airlines. for violating U.S. export controls against Russia.
- Hapag-Lloyd mandates a Letter of Indemnity requirement for shipments to and from Estonia, Latvia, and Lithuania.
BIS has published new regulations, effective May 9, which expand sanctions against Russian industry sectors in response to Russia’s invasion of Ukraine. The items now subject to the license requirement found in 15 CFR 746.5(a)(1)(ii) were added to Supplement 4 of Part 746.
The U.S. has also expanded export controls on Russia to cover a broader range of “commercial and industrial operations,” including wood products and construction machinery. The new controls make more items on the Export Administration Regulations (EAR) subject to “stringent” licensing restrictions for export to Russia, the BIS said in a final rule that includes the specific Schedule B numbers and Harmonized Tariff Schedule codes of the newly restricted items. These items previously didn’t require a license for “most exports” to Russia.
The U.S. will soon issue a series of new Russian financial restrictions, including full-blocking sanctions on the country’s largest financial institution, Sberbank, and its largest private bank, Alfa Bank, the White House said on April 6. The U.S. is also expected to impose full-blocking sanctions against a group of “critical” Russian state-owned entities, Russian government officials, oligarchs and their family members, including President Vladimir Putin’s adult children.
President Joe Biden will also issue an executive order blocking new investment in Russia by U.S. people or companies. The U.S. sanctions will be announced alongside similar measures by G7 member states and the EU.
Ending Permanent Normal Trade Relations Status on Imports
On April 8, President Biden signed legislation to end permanent normal trade relations status for Russian and Belarusian goods and codify an existing ban on oil from Russia. The suspension of normal trade relations begins “on the day after the date of the enactment” and means that “the rates of duty set forth in column 2 of the Harmonized Tariff Schedule of the United States shall apply to all products of the Russian Federation and of the Republic of Belarus.”
Russian Aircraft Subject to Export Controls
BIS issued a list of about 100 commercial and private aircraft that have violated U.S. export controls by flying into Russia, including planes operated by the country’s main airline operators and one owned by a Russian oligarch. BIS said it will impose penalties, jail time or revoke export privileges for any company or person that violates the Export Administration Regulations (EAR) by providing “any form of service” to the aircraft without a required BIS license. The list includes planes owned by Russian airlines Aeroflot, AirBridgeCargo and Utair and Russian businessman Roman Abramovich.
BIS has also added 10 planes to its list of restricted aircraft, including the first seven Belarusian owned/operated commercial aircrafts. The agency also updated tail numbers for 32 planes and authorized two aircraft to leave Russia. BIS stated that it will impose penalties and/or jail time or revoke export privileges for any company or person that violates the EAR by providing “any form of service” to the listed aircraft without a required BIS license.
Expanded Russia, Belarus Export License Requirements
The Bureau of Industry and Security expanded its export license requirements for Russia and Belarus to cover all items on the Commerce Control List, the agency said in an April 8 notice, further widening restrictions that previously only applied to categories 3-9 of the CCL. The agency correspondingly revised its recently created Russia/Belarus foreign direct product rule, which will now apply to all items on the CCL, BIS said. The agency also revised its License Exception Aircraft, vessels and spacecraft (AVS) to limit its availability for certain Belarus-related aircraft. The changes are effective April 8.
The Treasury Department’s Office of Foreign Assets Control (OFAC) has released additional General Licenses regarding the Russian Sanctions.
General License 17A, which extends that authorization for transactions relating to the importation of fish, seafood, and preparations thereof of Russian origin through 12:01 a.m. ET on June 23, 2022, if there is a contract/agreement dated prior to March 11, 2022. Effective today, GL 17A replaces GL 17. Note that the deadline for importing non-commercial diamonds and alcoholic beverages remains midnight March 24. There are also two new FAQs related to importation of Russian items that are published here.
General License 6A authorizes transactions necessary for the export or re-export to, from, or transit Russia of various food and medical items. Note, while OFAC may authorize transactions for medical devices in this GL, the Commerce Department’s Bureau of Industry and Security (BIS) may require a specific license.
General License 25 authorizes journalistic activities in the Crimea region of Ukraine, the so-called Donetsk People’s Republic (DNR) or Luhansk People’s Republic (LNR) regions of Ukraine. This includes authorizing the export of EAR99 equipment necessary for those journalistic activities.
General License 30 authorizes transactions involving new debt or new equity with Gazprom Germania through 12:01 a.m. EDT Sept. 30.
If you have questions about these measures and how they impact your supply chain, reach out to Mohawk Global Trade Advisors.