New U.S., EU, and UK Sanctions and Export Controls Against Russia and Related Measures Targeting Belarus and Iran

New U.S., EU, and UK Sanctions and Export Controls Against Russia and Related Measures Targeting Belarus and Iran

March 1, 2023, Covington Alert

One year after Russia’s further invasion into Ukraine, the United States, the European Union, and the United Kingdom have implemented additional sanctions and export controls targeting Russia, and related measures targeting Belarus and Iran.

On February 24, 2023, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued a new determination pursuant to Section 1(a)(i) of Executive Order (“E.O.”) 14024, which provides for the imposition of sanctions on any persons determined to operate or have operated in the metals and mining sector of the Russian Federation economy. OFAC also imposed comprehensive property-blocking sanctions against a number of additional entities and individuals associated with Russia by adding them to its List of Specially Designated Nationals and Blocked Persons (“SDN List”). In addition, OFAC issued four new or amended Russia-related general licenses (“GLs”), including General License 8F (expanding in certain respects the authorization for certain energy-related activities), General License 13D (extending the authorization for certain payments to Russian government entities targeted by Directive 4 under E.O. 14024), General License 60 (authorizing the wind down of transactions with certain newly designated Russian financial institutions for a period of three months), and General License 61 (authorizing certain debt, equity, and derivative transactions with newly designated Russian financial institutions for a period of three months). Concurrently, OFAC issued five new Frequently Asked Questions (“FAQs”) to provide further guidance on these new or amended authorizations.

The same day, the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) issued four new rules expanding and clarifying export restrictions targeting Russia and Belarus; implementing new controls aimed at Iranian unmanned aerial vehicles (“UAVs”) and their use by Russia; and (in two separate rules) adding 86 entities to the U.S. Entity List, 76 of which were also designated as Russian/Belarusian Military End Users. Notably, these rules expand the lists of EAR99 items controlled for export or reexport to, or transfer within, Russia and Belarus; establish a new list of EAR99 items controlled for export or reexport to, or transfer within, Iran; add a new Iran Foreign Direct Product Rule (“FDPR”) to the Export Administration Regulations (“EAR”); and revise the Russia/Belarus FDPR to cover certain EAR99 items.

Separately, on February 25, 2023, the Council of the European Union (the “Council”) adopted a tenth package of additional restrictive measures against Russia. The new package introduces new import/export and service restrictions and additional asset-freezing designations, together with new reporting obligations concerning funds and economic resources of persons that have been designated for asset-freezing EU sanctions.

The UK Government also has recently introduced new asset-freezing sanctions, and announced a package of further sanctions measures that are expected to include additional import and export restrictions, together with restrictive measures concerning the Russian controlled areas of Kherson and Zaporizhzhia oblasts.

Designation of Russian Metals and Mining Sector under E.O. 14024

Section 1(a)(i) of E.O. 14024 provides for the imposition of property-blocking sanctions on any person determined to operate or have operated in specified sectors of the Russian Federation economy. OFAC has issued a new determination pursuant to Section 1(a)(i) of E.O. 14024 which expands the scope of these sanctions to encompass the metals and mining sector of the Russian Federation economy (in addition to various other sectors of the Russian economy that already have been targeted under this authority, i.e., the accounting, aerospace, electronics, financial services, management consulting, marine, quantum computing, and trust and corporate formation sectors). FAQ 1115 indicates that OFAC anticipates publishing regulations defining the term “metals and mining sector of the Russian Federation economy” to include any act, process, or industry of extracting, at the surface or underground, ores, coal, precious stones, or any other minerals or geological materials in the Russian Federation, or any act of procuring, processing, manufacturing, or refining such geological materials, or transporting them to, from, or within the Russian Federation.

FAQ 1116 clarifies, however, that a sector determination does not automatically impose sanctions on all persons who operate or have operated in the sector. Rather, only persons specifically determined by the U.S. Treasury or State Departments pursuant to E.O. 14024 to operate or have operated in one of the targeted sectors are subject to sanctions. (As further described below, OFAC made four such designations last week.)

FAQ 1117 further explains that OFAC does not intend to sanction persons for operating in the metals and mining sector where the goods or services they are providing are solely for the safety and care of personnel, protection of human life, prevention of accidents or injuries, maintenance or repair necessary to avoid environmental or other significant damage, or activities related to environmental mitigation or remediation. Examples of such goods include personal protective equipment, safety devices, ventilation systems, and alarm systems; examples of such services include those necessary for use of the referenced goods, rescue and accident response services, cleaning, and safety inspections. Consistent with OFAC’s approach more broadly, non-U.S. persons generally do not risk exposure to U.S. property-blocking sanctions under E.O. 14024 for engaging in transactions with blocked persons, including in the metals and mining sector, where those transactions would not require a specific license if engaged in by a U.S. person.

New SDN Designations

In connection with the new measures released on February 24, OFAC also added a number of individuals, entities, and vessels to its SDN List. U.S. persons are broadly prohibited, except as authorized by OFAC, from transacting or dealing with SDNs and entities that SDNs own 50% or more, directly or indirectly, individually or in the aggregate with other SDNs. In addition, the property of SDNs and entities that they own 50% or more must be blocked, or frozen, when it comes into the United States or the possession or control of a U.S. person. “U.S. persons” are U.S. legal entities and their non-U.S. branches; individual U.S. citizens and lawful permanent residents (“green-card” holders), no matter where located or employed; and persons present in the United States.

The new designations include more than a dozen financial institutions in Russia, including Credit Bank of Moscow PJSC, one of the ten largest banks in Russia by asset value, as well as certain Russian wealth management-related entities. Additionally, OFAC designated more than 30 third-country individuals and companies connected to Russia’s sanctions evasion efforts, including those related to arms trafficking and illicit finance. New sanctions targets also include entities and individuals operating in industries that support Russia’s war against Ukraine, including firms that produce or import technology used by entities in Russia’s defense sector.

OFAC has additionally added certain entities operating in the metals and mining sector of the Russian Federation economy to the SDN List pursuant to the new determination discussed above. These entities include: Joint Stock Company Burevestnik Central Scientific Research Institute, OOO Metallurg-Tulamash, TPZ-Rondol OOO, and Mtsenskprokat. All these companies have ties to Russia’s defense sector.

General Licenses

• General License 8F: Authorizes certain energy-related transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations (“RuHSR”) involving certain designated entities, through 12:01 a.m. eastern daylight time on May 16, 2023. This GL replaces GL 8E and extends the authorization to cover two newly sanctioned banks, Bank Zenit Public Joint Stock Company and Bank Saint-Petersburg Public Joint Stock Company. GL 8F is subject to the same conditions and limitations that applied under its predecessor, GL 8E.
• General License 13D: Extends through 12:01 a.m. eastern daylight time on June 6, 2023 the authorization for U.S. persons, or entities owned or controlled, directly or indirectly, by a U.S. person, to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, or certifications, to the extent such transactions are prohibited by Directive 4 under E.O. 14024, provided such transactions are ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities. Relatedly, OFAC FAQ 1118 clarifies that GL 13D does not authorize transactions involving the payment of any “exit tax” imposed by the Russian Federation as such a tax is not considered “ordinarily incident” and “necessary to day-to-day operations” in the Russian Federation. Thus, U.S. persons whose divestment will involve an “exit tax” payment may require a specific license from OFAC (as would any payment of an “exit tax” by a non-U.S. person where the payment is undertaken with a U.S. nexus).
• General License 60: Authorizes through 12:01 a.m. eastern daylight time on May 25, 2023 transactions otherwise prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind down of transactions involving some, but not all, of the newly designated Russian financial institutions, provided that any payment to such a blocked entity is made into a blocked account. GL 60 also authorizes U.S. persons to reject, rather than block, all transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the processing of funds involving such blocked entities as an originating, intermediary, or beneficiary financial institution, through 12:01 a.m. eastern daylight time on May 25, 2023.
• General License 61: Authorizes through 12:01 a.m. eastern daylight time on May 25, 2023, with certain exceptions, transactions prohibited by E.O. 14024 that are: (i) ordinarily incident and necessary to the divestment or transfer, or the facilitation of the divestment or transfer, to a non-U.S. person of debt or equity of certain newly blocked Russian financial institutions (“covered debt or equity”); (ii) ordinarily incident and necessary to facilitating, clearing, and settling trades of covered debt or equity of certain newly designated financial institutions that were placed prior to 4:00 p.m. eastern standard time on February 24, 2023; or (iii) ordinarily incident and necessary to the wind down of certain derivative contracts entered into prior to 4:00 p.m. eastern standard time on February 24, 2023, provided that any payments to a blocked person are made into a blocked account in accordance with RuHSR.

Expansion and Clarification of Export Controls Targeting Russia and Belarus

Effective February 24, 2023, the Implementation of Additional Sanctions Against Russia and Belarus Under the Export Administration Regulations (EAR) and Refinements to Existing Controls rule (the “Russia/Belarus Rule”) amends the EAR by:

• Aligning the text of the Luxury Goods Sanctions at EAR § 746.10 with the text of the Sanctions against Russia and Belarus at EAR § 746.8 to clarify that the exclusion from certain license requirements for exports, reexports, and in-country transfers of mass market encryption hardware and software controlled under Export Control Classification Numbers (“ECCNs”) 5A992 or 5D992 also applies to such items that appear on the list of luxury goods at Supplement No. 5 to EAR Part 746;
• Excluding Taiwan from certain Russia- and Belarus-related FDPR license requirements, consistent with the treatment of items produced in other U.S.-allied countries that have implemented export controls against Russia and Belarus that are similar to those imposed by the United States;
• Adding a case-by-case license review policy for applications for the disposition of items by companies not headquartered in Country Groups D:1, D:5, E:1, or E:2 that are curtailing or closing all operations in Russia or Belarus;
• Revising the lists of EAR99 items subject to certain license requirements at Supplements No. 2, 4, and 6 to EAR Part 746 to:
  • identify listed items by Harmonized Tariff Schedule (“HTS”)-6 Code and HTS Description, consistent with the approach of U.S. allies, and clarify that the HTS-6 Code, rather than the HTS Description, controls for determining license requirements;
  • expand the items subject to a license requirement when (i) exported, reexported, or transferred (in-country) with “knowledge” that the item will be used directly or indirectly in exploration for, or production of, oil or gas in Russian deepwater (greater than 500 feet) or Arctic offshore locations or shale formations in Russia or Belarus, or (ii) the exporter (or reexporter or transferor) is unable to determine whether the item will be used in such projects, to include components, parts, accessories, and attachments modified or designed for listed items, regardless of the HTS Code or HTS Description applicable to those components, parts, accessories, or attachments;
  • add 322 additional categories of industrial items identified by HTS-6 Codes -- including certain electronics, industrial machinery, and equipment -- to Supplement No. 4 to EAR Part 746, thus imposing a license requirement for the export, reexport, or transfer (in-country) to or within Russia or Belarus of those items;
  • expand and revise the list of EAR99 items that may be useful for Russia’s chemical and biological weapons production capabilities that are listed in Supplement No. 6 to EAR Part 746, which are subject to a license requirement when exported, reexported, or transferred to or within Russia or Belarus to better align with the controls implemented by U.S. allies; and
• Adding 276 entries to the list of luxury goods at Supplement No. 5 to EAR Part 746 that are subject to a license requirement when exported, reexported, or transferred to or within Russia or Belarus or to Russian or Belarusian oligarchs located anywhere, who are designated on the SDN List.

Introduction of New Controls Targeting Iranian UAVs

Also effective February 24, 2023, the Export Control Measures Under the Export Administration Regulations (EAR) to Address Iranian Unmanned Aerial Vehicles (UAVs) and Their Use by the Russian Federation Against Ukraine rule (the “Iranian UAV Rule”) establishes a new Supplement No. 7 to EAR Part 746, which lists certain EAR99 items, identified by HTS-6 codes, that BIS understands are used in Iranian UAVs, and imposes license requirements on such items when destined to Russia, Belarus, or Iran. (Note that the BIS controls on certain EAR99 items to Iran are new, as reexports to Iran of items that are subject to the EAR and classified as EAR99 do not ordinarily require BIS export licensing, absent a prohibited end user or prohibited end use. Such reexports may already be subject to OFAC jurisdiction, for example, if made by a U.S. person or a non-U.S. entity owned or controlled by a U.S. person.) Additionally, the Iranian UAV Rule revises the Russia/Belarus FDPR and adds an Iran FDPR to expand the scope of the EAR’s jurisdiction over such items, as well as certain foreign-produced items identified in Categories 3 through 5 and Category 7 of the EAR’s Commerce Control List (“CCL”) when destined to Iran. Notably, exports from the countries identified at Supplement No. 3 to EAR Part 746 are exempt from the new FDPR license requirements, because each of these countries maintains export controls with respect to Russia and Belarus that are similar to those imposed by the United States.

More specifically, the list of items at new Supplement No. 7 to EAR Part 746 includes certain integrated circuits, data reception and transmission machines or apparatus, certain engines, memories, amplifiers, and capacitors, as well as any components, parts, accessories, and attachments modified or designed for the listed items regardless of HTS Code or HTS Description (with limited exceptions for, e.g., fasteners and washers). EAR § 746.7 has been amended to add a license requirement for the export or reexport of items on this new Supplement No. 7 to Iran when subject to the EAR, except that items subject to the EAR as a result of the new Iran FDPR, discussed below, do not require a license (i) when exported from a U.S.-allied country appearing in Supplement No. 3 to EAR Part 746, or (ii) where the export or reexport would meet all of the terms and conditions of an OFAC general license if the transaction was subject to OFAC jurisdiction.

The amendments to the Russia/Belarus FDPR expand the product scope of the rule to capture foreign-produced items identified in new Supplement No. 7, in addition to items identified in any ECCN of the CCL or in Supplement No. 6 to EAR Part 746, when those foreign-produced items are either (i) the direct product of U.S.-origin technology or software that is specified in any product group D or E ECCN on the CCL, or (ii) produced by any plant or major component of a plant located outside of the United States that is itself the direct product of U.S.-origin technology or software specified in any product group D or E ECCN on the CCL. The destination scope of the Russia/Belarus FDPR has also been expanded to capture exports, reexports, and transfers of items where there is knowledge, as that term is defined in the EAR, that the foreign-produced item will be incorporated into or used in the production or development of any part, component, or equipment specified in Supplements No. 6 or 7 to EAR Part 746 that is produced in or destined to Russia or Belarus. Previously the destination scope had captured only items where there is knowledge that the foreign-produced item either (i) is destined to Russia or Belarus, or (ii) will be incorporated into or used in the production or development of any part, component, or equipment not designated EAR99 that is produced in or destined to Russia or Belarus.

The new Iran FDPR is modeled on the Russia/Belarus FDPR. The product scope applies to foreign-produced items that are identified in new Supplement No. 7 to EAR Part 746 or in Categories 3 through 5 or Category 7 of the CCL that are either (i) the direct product of U.S.-origin technology or software that is specified in any product group D or E ECCN in Categories 3 through 5 or Category 7 of the CCL, or (ii) produced by any plant or major component of a plant located outside of the United States that is itself a direct product of U.S.-origin technology or software that is specified in any product group D or E ECCN in Categories 3 through 5 or Category 7 of the CCL. The destination scope of the Iran FDPR is met where the exporter has “knowledge” that the foreign-produced item is either (i) destined to Iran, or (ii) will be incorporated into or used in the production or development of any part, component, or equipment identified in Supplement No. 7 to EAR Part 746 or specified in any ECCN on the CCL in Categories 3 through 5 or 7 of the CCL that is located in or destined to Iran.

New Entity List and Russian/Belarusian Military End User Designations

On February 24, 2023, BIS also designated two Canadian, five Chinese, one French, one Luxembourgian, one Dutch, and 79 Russian entities to the Entity List through two separate rules. Seventy-six of these entities, including all of the entities outside of Russia, were also designated as Russian/Belarussian Military End Users with a footnote 3 designation indicating they are subject to the military end user restrictions at EAR § 744.21 and the Russia/Belarus-Military End User FDPR. EAR § 744.21 imposes a license requirement for the export, reexport, or transfer to a Russian/Belarussian military end user of any item subject to the EAR (including EAR99 items), and the Russia/Belarus-Military End User FDPR broadly imposes a license requirement on exports, reexports, and transfers of even EAR99 items produced outside the United States from certain technology or software that is subject to the EAR or plants or major components of plants that are themselves the direct product of U.S.-origin technology or software when destined to these end users, as discussed in our client alert of March 6, 2022.

Additional Asset-Freezing Designations

Council Implementing Regulation (EU) 2023/429 adds 87 individuals and 34 entities to the EU asset-freezing list. The newly sanctioned entities include, among other parties, banks such as Alfa-Bank, Rosbank, and Tinkoff Bank, the National Wealth Fund of the Russian Federation, and the Russian National Reinsurance Company.

Council Regulation (EU) 2023/426 introduces several new licensing provisions to the principle EU-Russia asset-freezing sanctions regulation – Council Regulation No. 269/2014 – including for the termination of operations, contracts, or other agreements, previously concluded with certain listed entities.

Notably, the regulation also introduces expanded reporting obligations, including a new obligation to report, to the competent EU Member State authorities, information on funds and assets of sanctioned persons that have not been frozen in accordance with EU sanctions requirements, as well as information on funds or assets of sanctioned persons that have been moved or otherwise dealt with in the two weeks preceding the listing of the sanctioned person.

The initial EU Commission draft version of the regulation included a legal basis for the EU commission to impose fines on persons and entities for failing to meet the new reporting obligation. Based on press reports, that provision was removed following objections by several EU Member States. However, failure to make the necessary reports may still result in fines under the applicable laws of the relevant EU Member State.

Additional Sectoral Sanctions

Council Regulation (EU) 2023/427 introduces new amendments to Council Regulation (EU) No 833/2014 (“Regulation 833”), which is the principle EU measure imposing sectoral export/import controls and services sanctions in relation to Russia, as well as changes to various exemptions and licensing provisions in Regulation 833. The following are the key measures introduced through the February 25 regulation:

• Additional export/supply controls: The regulation expands the lists in Regulation 833 of items that are subject to restrictions on exports or supplies for use in Russia. The regulation adds items to Annex VII (critical industry goods), Annex XI (goods and technology suited for use in aviation), and Annex XXIII (industrial equipment and raw materials). Annex VII now includes, among other newly-designated items, rare-earths and compounds, additional electronic integrated circuits, and additional photographic cameras. Annex XI has been expanded to now also include certain types of turbojets and turbopropellers and their parts. The additions to Annex XXIII include certain types of additional flat-rolled products of iron or non-alloy steel. The new controls are subject to narrow exemptions, including for the winding-down of pre-existing contractual obligations.

The regulation furthermore adds new entities to the list of designated entities in Annex IV of Regulation 833 that are subject to enhanced export controls regarding dual-use and Annex VII items. The export of the controlled items to these entities always requires an export license which will only be granted under narrow circumstances.

• Additional import controls: The regulation also expands the list of items that are subject to the Article 3i, Annex XXI import prohibition to also include, inter alia, certain type of petroleum jelly, petroleum coke, bitumen and asphalt, bituminous mastics, carbon, and synthetic rubber. As with regard to the new export restrictions, these new import restrictions are subject to limited exemptions including for the winding-down of pre-existing obligations.

The regulation furthermore clarifies with regards to the import restrictions in Regulation 833 that restricted goods that are located in the EU, and that were already presented to the customs authority before they became subject to import restrictions in Regulation 833, may be released by the competent customs authorities.

• Transit restrictions: The regulation introduces a prohibition against the transit via Russia of certain item that are subject to Regulation 833 export prohibitions. The introduction of this prohibition marks a partial departure from the previous position of the EU expressed in the current version of the EU Russia sanctions guidance, according to which the export of controlled items via Russia to third countries is generally permitted.
• Derogation to wind down Russian operations: The regulation introduces a derogation from the professional service restrictions in Article 5n of Regulation 833 allowing EU Member State authorities to grant a license for the continuation of the provision of the restricted services until December 31, 2023 where such provision of services is strictly necessary for the divestment from Russia or the wind-down of business activities in Russia, provided that such services are provided to and for the exclusive benefit of the legal persons resulting from the divestment and the services will not be directly or indirectly provided to the Government of Russia or military-related activities or end users in Russia.
• Sanctions on Russian state-owned entities: The regulation extends the pre-existing exemption in Article 5aa for transactions strictly necessary for the wind-down of a joint venture or similar legal arrangement with a party sanctioned under Article 5aa from June 30, 2023 to December 31, 2023 (this exemption has been extended several times following its introduction in April 2022). The regulation similarly extends the duration for which national competent authorities may authorise transactions necessary for the divestment and withdrawal of Russian entities that are sanctioned under Article 5aa from EU companies to December 31, 2023.
• Critical Infrastructure Prohibition: The regulation introduces a new prohibition, coming into effect on March 27, 2023, against Russian nationals (regardless of where they reside) or natural persons residing in Russia holding any posts in the governing bodies of the owners/operators of “critical infrastructures,” “European critical infrastructures,” and of “critical entities.” This prohibition applies to European critical infrastructures and critical infrastructures identified or designated as such under the national law of the EU Member states, as defined in Council Directive 2008/114/EC2, which applies until October 18, 2024. As from October 18, 2024, the prohibition will apply to critical entities and critical infrastructures, as defined in Directive (EU) 2022/2557.
• Gas Storage Facilities: The regulation introduced a new prohibition, subject to certain exemptions and derogations, to provide gas storage capacity – with the exception of LNG storage – to Russian nationals, Russian based persons and entities, entities majority owned by Russian based entities, or persons or entities acting on behalf or at the direction of one of the foregoing entities.
• Central Bank of Russia: The regulation supplements pre-existing restrictions on transactions related to the management of reserves as well as of assets of the Central Bank of Russia. Persons subject to EU jurisdiction are now required to supply to the European Commission and to the competent EU Member State authority information on such assets and reserves of the Central Bank which they hold or control or are a counterparty to, no later than two weeks after February 26, 2023.
• Russian media-related sanctions: The regulation initiates the process of suspending the broadcasting license of RT ArabicSputnik Arabic and RT Arabic (in addition to those Annex V media entities that are already subject to EU broadcasting restrictions). Those restrictions prohibit EU persons from broadcasting content by the designated Russian parties and from advertising products or services in any content produced or broadcasted by the listed entities. The suspension of the license of RT ArabicSputnik Arabic and RT Arabic requires an implementing act by the Council.
• Aircraft operators: The regulation supplements pre-existing prohibitions against Russian aircraft from landing in, taking off from, or overflying the EU by introducing an obligation for EU aircraft operators of non-scheduled flights between Russia and the EU (operated directly or via a third country) to notify all relevant information concerning the flight to their member state authorities prior to their operation, and at least 48 hours in advance.

The regulation also makes other targeted amendments, including to adjust the scope of certain pre-existing exemptions, licensing provisions, and reporting requirements.

Further UK Russia Sanctions Developments

New UK Sanctions Measures Announced

On February 24, 2023 the UK Government announced a new package of sanctions targeting Russia, which will include, inter alia, the following measures:

• New export/import controls: The announcement states that the new measures will include new export prohibitions “on every item Russia has been found using on the battlefield to date.” According to the announcement, these new export restrictions will cover “hundreds of goods” including aircraft parts, radio equipment, and electronic components that can be used by the Russian military industrial complex, including in the production of UAVs. The UK also intends to prohibit the import of 140 goods, including iron and steel products processed in third countries.
• Non-government controlled territories: The announcement states that the UK Government will extend existing measures against Crimea, and the non-government controlled territory in Donetsk and Luhansk oblasts, to target the Russian controlled areas of Kherson and Zaporizhzhia oblasts by restricting their access to UK trade and finance.

We expect that the UK corresponding legislation will be published in the coming days and that the new measures will come into force shortly after publication.

New UK Asset-Freezing Designations

Also on February 24, 2023, the UK designated for asset-freezing sanctions 80 individuals and 12 entities. Among the newly sanctioned individuals are 17 senior executives at Russian state-owned nuclear power company Rosatom, including Alexander Novak, who is both a member of the supervisory board and the Deputy Prime Minister in Putin’s administration; 20 executives of Gazprom and Aeroflot, including Gazprom Chairman Viktor Zubkov; 34 executives linked to defense companies Rostec and Almaz-Antey Corporation; and Mattias Warnig, the CEO of Nord Stream 2. The 12 designated entities include Bank St Petersburg PJSC, Bank Uralsib PJSC, Bank Zenit PJSC, and MTS Bank PJSC.

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We are closely monitoring developments concerning the U.S., UK, and EU sanctions and export controls against Russia, Belarus, and Iran, and will issue further updates in the event of material developments. In the meantime, we would be happy to address any questions you may have.

Covington’s International Trade Controls team—which includes lawyers in the firm’s offices in the United States, London, Brussels, and Frankfurt—regularly advises clients across business sectors, and would be well-placed to provide support in connection with the emerging Russia sanctions and export controls.

Our trade controls lawyers also work closely with Covington's Global Public Policy team which consists of over 120 former diplomats and policymakers in the United States, Europe, the Middle East, Latin America, Africa, and Asia. Many of the members of the Public Policy team have had substantial government experience in sanctions and export controls matters, and regularly advise our clients on emerging sanctions policy matters and related engagements with government stakeholders.

Covington is therefore exceptionally well-positioned to assist clients in navigating their most complex challenges, drawing on our trade and public policy teams as well as our additional multidisciplinary teams in areas including international arbitration and disputes, cybersecurity, anti-money laundering, corporate restructuring, finance, and insurance.

As the Ukraine crisis evolves, we will continue to monitor developments, including those regarding U.S., UK, and EU sanctions against Russia, and will issue further updates in the event of material developments.