As the war between Russia and Ukraine drags on, the U.S. is furthering sanctions to weaken Russia, particularly its access to technology and the global military-industrial complex. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action to implement commitments made by G7 leaders earlier this year for sanctions that will impede Russian access to battlefield supplies, including starving Russia of G7-produced products needed for its aerospace and defense and other technology sectors and reducing Russia’s revenue from the metals and mining sector.
Other sanctions are aimed at reducing Russia’s access to products that support its military and war efforts, undermine its future energy capabilities and degrade Russia’s access to the international financial system.
In April, President Joe Biden published Executive Order 14024, “Blocking Property with Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation,” which declared a national emergency and allowed the Treasury to block trade or commerce with Russian entities and others found to be in violation of helping Russia.
“Today’s actions represent another step in our efforts to constrain Russia’s military capabilities, its access to battlefield supplies, and its economic bottom line,” said Deputy Secretary of the Treasury Wally Adeyemo in a July statement. “As long as Russia continues to wage its unprovoked and brutal war against Ukraine, we will impose sanctions to deprive Russia of the technology it needs and disrupt the Russian arms industry’s ability to resupply.”
Sanctions are just one part of the U.S. government’s efforts to stop Russia’s procurement of critical goods and technology. The United States is also working with partner governments and the private sector to identify and disrupt evasion networks, and the newest actions will complement those efforts.
In a Supplemental Alert on May 19, 2023, Treasury’s Financial Crimes Enforcement Network (FinCEN) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) identified certain high priority items to assist financial institutions in identifying suspicious transactions relating to possible export control evasion. The list was primarily based on the Harmonized System (HS) code classification of components from Russian weapons systems recovered on the battlefield in Ukraine. Items described by these HS codes have been found in multiple Russian weapons systems used against Ukraine, including the Kalibr cruise missile, the Kh-101 cruise missile, and the Orlan-10 UAV. Many of the entities designated by the latest Treasury sanctions have transferred certain of these high priority items to Russia-based end-users.
Russia also continues to try and import foreign-made electronics and technology by way of third-party intermediaries and transshipment points outside of Russia. The U.S. has identified many facilitators and intermediaries for Russia companies in Kyrigyz Republic, UAE and Serbia. Several Russian entities were also identified for importing dual-use technology from abroad.
OFAC is also targeting entities in key industries such as aerospace, quantum technologies and advanced computing that Russia exploits to support its defense industries.
Those companies on the sanctions list (see below) are essentially blocked from transactions with U.S. companies, including any property, interests or ownership based in the United States. “All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless exempt or authorized by a general or specific license issued by OFAC. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person,” the Treasury statement said.
U.S. Treasury sanctions against technology and manufacturing companies
Pursuant to Executive Order 14024, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has blocked trade and commerce with many companies in Russia and those supporting its military efforts. This list represents some of the technology companies and manufacturers under sanction.Â
Entities based in the Kyrgyz Republic have been frequent exporters of controlled electronics components and other technology to Russia since Russia began its full-scale invasion of Ukraine, such as:
• LLC RM Design and Development (RMDD) sells electronic and telecommunication equipment and parts.
• ZAO GTME Tekhnologii (GTME Tekhnologii) made dozens of shipments of goods to Russia, including high priority items included in the FinCEN-BIS Supplemental Alert, such as tantalum capacitors and electronic integrated circuits. GTME Tekhnologii’s primary customer has been Russia-based Technologies Systems and Complexes Limited (TSC), a vendor of electronic and digital equipment.
One of the most common tactics Russian entities have used to continue their importation of foreign-made electronics and technology is the use of third-party intermediaries and transshipment points outside of Russia, which are then imported to Russian companies, such as:
• Basis Trade Prosoft LLC (BTP) supplies industrial computers, components for automated process control systems, and radio-electronic components.
• OOO Radiotekhsnab (RTS) imports electronic components and wholesaler of electronic and telecommunications equipment and parts.
• Region-Prof LLC (Region-Prof) supplies automation equipment, electronic components and hardware and software for building electronic equipment.
• Limited Liability Company Siaisi (CIC) deals with electronic and optical equipment as well as computers and related equipment.
• Limited Liability Company AK Microtech (AKM) specializes in transferring foreign semiconductor technology to Russian microelectronics production companies, including entities that provide microelectronics to the Russian defense industry.
OFAC is taking further action to limit Russia’s revenue from its metals industries and to limit Russia’s future energy capabilities in support of the G7 commitments.
• Joint Stock Company Ural Mining and Metallurgical Company (UMMC) is one of Russia’s top producers of metals such as copper, zinc, gold and silver.
• UMMC Nonferrous Metals Processing Limited Liability Company (UMMC NFMP) is a Russia-based UMMC subsidiary involved in the non-ferrous metals processing industry that operates plants that manufacture copper, brass, bronze, copper-nickel and nickel rolled products.
• Joint Stock Company Uralelektromed (Uralelektromed) is a Russia-based UMMC subsidiary involved in the refining of precious metals, cathodes and bullion products.
