Additional Guidance Issued to Prevent Sanctions Evasion and Implement New Executive Order
WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a new round of sanctions targeting Russian and Kremlin elites, oligarchs, and Russia’s political and national security leaders who have supported Russian President Vladimir Putin’s brutal and illegal invasion of Ukraine.
Today’s actions include designating regime elites and business executives who are associates and facilitators of the Russian regime, including three immediate family members of President Putin’s spokesperson, Dmitriy Sergeevich Peskov; Russian tycoon and Kremlin insider Viktor Vekselberg; and the Management Board of the sanctioned VTB Bank. Additionally, OFAC designated 12 members of the Russian State Duma, including Vyacheslav Victorovich Volodin, who is also a permanent member of Russia’s Security Council.
OFAC is also issuing guidance, in line with today’s G7 leaders statement, to guard against potential attempts to use virtual currency to evade U.S. sanctions imposed on Russia. All of these actions complement a new Executive Order issued today by President Biden that imposes new import and export restrictions on Russia, including the export of U.S. banknotes to Russia. Finally, OFAC is also issuing guidance and authorizations to implement the President’s new Executive Order.
“Treasury continues to hold Russian officials to account for enabling Putin’s unjustified and unprovoked war,” said Secretary of the Treasury Janet L. Yellen. “Today’s actions also further isolates the severely damaged Russian economy by prohibiting trade in products that are key to the economic and financial interests of all Russian elites.”
TARGETING PUTIN ENABLERS AND ELITES
Family of Dmitriy Peskov, Kremlin Spokesman
On March 3, 2022, the U.S. State Department designated Dmitriy Sergeevich Peskov (Peskov), identified as the lead propagandist and spokesperson of the Russian Federation. Peskov was designated pursuant to Executive Order (E.O.) 14024 for being or having been an official of the Government of the Russian Federation (GoR). Australia, Canada, and the European Union (EU) have also sanctioned Peskov.
Today, OFAC is designating three of Peskov’s family members, all of whom live luxurious lifestyles that are incongruous with Peskov’s civil servant salary and are likely built on the ill-gotten wealth of Peskov’s connections to Putin.
Peskov’s wife, Tatiana Aleksandrovna Navka (Navka), has a property empire worth more than $10 million. Her real estate includes property in an elite Moscow suburb where Putin also lives, another multimillion-dollar apartment in Moscow given to her by the GoR, and an apartment in Ukraine’s Crimean peninsula, which Russia has occupied since 2014. She first gained notoriety when she won a gold medal in ice dancing representing Russia at the 2006 Winter Olympics and later hosted an ice dancing show on Russia’s state-owned pro-Kremlin Channel One.
Treasury also designated Peskov’s two adult children, Nikolay Peskov (Nikolay) and Elizaveta Dmitriyevna Peskova (Liza). Nikolay grew up in the United Kingdom but moved back to Russia to serve in the army, and later worked for the Russian propaganda outlet RT. Nikolay reportedly has access to a number of luxury vehicles and travels on private aircraft and yachts. Liza has tens of thousands of followers on social media, where she displays her luxurious lifestyle. She previously interned for a member of the European Parliament who publicly supported Russia’s attempted annexation of Ukraine’s Crimea region.
Navka, Nikolay, and Liza are all being designated today pursuant to E.O. 14024 for being a spouse or adult child of Peskov, a person whose property and interests in property are blocked pursuant to E.O. 14024.
A Network Close to the Kremlin
Viktor Feliksovich Vekselberg (Vekselberg) is a prominent Russian businessman with an estimated net worth exceeding $6 billion who was previously designated on April 6, 2018 pursuant to E.O. 13662 for operating in the energy sector of the Russian Federation economy. Vekselberg’s extensive holdings, predominantly consolidated through his designated Renova Group of companies, span multiple sectors of the Russian Federation economy, and are intertwined with some of the GoR’s global initiatives, such as the Rusnano Group, one of the largest technological investors in Russia which provides a revenue source to the GoR.
Vekselberg has maintained close ties with leading GoR officials, including Putin and former Russian President, Dmitry Medvedev (Medvedev). Medvedev personally appointed Vekselberg to serve as director and president of the Skolkovo Foundation (SF), a GoR initiative aimed at creating a Russian version of Silicon Valley in order to elevate Russia’s international status as a leading innovation center for technological developments. Following his prior designation, Vekselberg no longer holds this position with SF. Furthermore, Vekselberg has taken part in Russian diplomatic and soft power activities on behalf of the Kremlin, accompanying GoR officials on cultural missions abroad.
As part of today’s action, OFAC is identifying as blocked property two of Vekselberg’s luxury assets: an aircraft with tail number P4-MIS and a yacht titled Tango. P4-MIS is an Airbus A319-115 with serial number 3133 registered in Aruba. Vekselberg’s yacht, Tango, is flagged in the Cook Islands, a self-governing island country in the South Pacific Ocean in free association with New Zealand, with IMO number 1010703, and gross registered tonnage of 2,083. Both P4-MIS and Tango are valued at approximately $90 million each for a total of $180 million in identified blocked property.
Vekselberg’s P4-MIS jet, valued at approximately $90 million.1
Vekselberg is being redesignated pursuant to E.O. 14024 for having acted or purported to act for or on behalf of, directly or indirectly, the GoR, and also for operating or having operated in the technology sector of the Russian Federation economy.
VTB Bank’s Management Board
On February 24, 2022, Treasury designated VTB Bank, Russia’s second largest bank, pursuant to E.O. 14024 for being owned or controlled by, or for having acted or purported to act for or on behalf of, directly or indirectly, the GoR, and for operating or having operated in the financial services sector of the Russian Federation economy. Today, OFAC is designating the ten individuals comprising VTB Bank’s management board.
- Olga Konstantinovna Dergunova
- Vadim Valerievich Kulik
- Valerii Vasilyevich Lukyanenko
- Anatolii Yuryevich Pechatnikov
- Natalia Germanovna Dirks
- Maxim Dmitrievich Kondratenko
- Erkin Rakhmatovich Norov
- Svyatoslav Evgenievich Ostrovsky
- Dmitrii Vasilyevich Pyanov
- Yuriy Nikolaevich Andresov
All ten individuals were designated pursuant to E.O 14024 for being or having been leaders, officials, senior executive officers, or members of the board of directors of the GoR and for operating or having operated in the financial services sector of the Russian Federation economy.
Vyacheslav Volodin and Members of the Russian State Duma
Today, in alignment with measures taken by international partners, OFAC designated twelve members of the Duma. The Duma is one of two chambers of the Russian Federal Assembly, Russia’s legislature. Following months of Russia’s buildup of military forces on the Ukrainian border, in February 2022, the Duma voted in favor of sending a resolution to Putin to recognize the independence of two separatist-held territories in eastern Ukraine, the so-called Donetsk People’s Republic (DNR) and Luhansk People’s Republic (LNR), which was a blatant violation of Ukrainian sovereignty.
Specifically, 11 members of the Duma signed a letter to the Duma’s speaker and member of the pro-Kremlin ruling United Russia Party, Vyacheslav Victorovich Volodin (Volodin), lobbying for Putin’s recognition of these two separatist republics. Volodin is a permanent member of the Russian Security Council and was previously designated on April 28, 2014, pursuant to E.O. 13661 for being an official of the GoR. Volodin signed the resolution and Putin ultimately announced his decision to recognize the independence of the so-called DNR and LNR regions of Ukraine. Shortly thereafter, Putin falsely accused Ukraine of committing genocide against Russian nationals and sent so-called peacekeepers into the DNR and LNR regions of Ukraine, constituting a wholesale rejection of the Minsk Agreements by the GoR. The United States, in coordination with partners and allies, imposed an embargo on the DNR and LNR regions of Ukraine as a result.
Today’s designations further hold to account those actors who were directly responsible for Russia’s illegitimate and unlawful recognition of the DNR and LNR regions of Ukraine and facilitating the sham pretext used by Putin to justify the Russian Federation’s unprovoked war against Ukraine. The eleven additional members of the Duma designated today consist of:
- Yuriy Vyacheslavovich Afonin
- Yevgeniy Ivanovich Bessonov
- Leonid Ivanovich Kalashnikov
- Vladimir Ivanovich Kashin
- Nikolay Vasilievich Kolomeitsev
- Aleksey Vladimirovich Kurinniy
- Ivan Ivanovich Melnikov
- Dmitriy Georgievich Novikov
- Nikolay Ivanovich Osadchiy
- Kazbek Kutsukovich Taysaev
- Gennady Andreyevich Zyuganov
Volodin and the eleven additional Duma members were designated pursuant to E.O. 14024 for being or having been leaders, officials, senior executive officers, or members of the board of directors of the GoR. Each of these individuals were previously designated by the European Union and Canada. Volodin, Kalashnikov, and Melnikov were also previously designated by the United Kingdom.
As a result of today’s action, all property and interests in property of the individuals above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. 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 authorized by a general or specific license issued by OFAC, or exempt. 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.
SUPPORTING THE UKRAINIAN PEOPLE
Today, OFAC issued Ukraine-related General License (GL) 23, pursuant to E.O. 14065, to authorize certain transactions that are ordinarily incident and necessary to nongovernmental organizations’ activities in the so-called Donetsk People’s Republic (DNR) or Luhansk People’s Republic (LNR) regions of Ukraine, including activities related to humanitarian projects to meet basic human needs, democracy building, education, non-commercial developments projects, and environmental and natural resource protection.
OFAC’s issuance of GL 23 is the latest in a series of Ukraine-related general licenses that authorize U.S. persons to support certain humanitarian efforts and other activity in the DNR and LNR regions of Ukraine, including transactions related to the export of agricultural commodities or medicine, the response to the Coronavirus Disease 2019 (COVID-19) pandemic, the official business of international organizations and entities, as well as personal remittances, telecommunications, internet services, and mail.
FUTHER GUIDANCE TO THWART SANCTIONS EVASION
Today, OFAC also issued new public guidance to further cut off avenues for potential sanctions evasion by Russia, in support of the G7 leaders’ commitment to maintain the effectiveness of economic measures. This guidance continues to make clear that Treasury’s expansive sanctions actions against Russia require all U.S. persons to comply with OFAC regulations, regardless of whether a transaction is denominated in traditional fiat currency or virtual currency. Sanctioned Russian persons are known to employ a wide variety of measures in their efforts to evade U.S. and international sanctions. As such, U.S. persons, wherever located, including firms that process virtual currency transactions, must be vigilant against attempts to circumvent OFAC regulations and must take risk-based steps to ensure they do not engage in prohibited transactions. OFAC is closely monitoring any efforts to circumvent or violate Russia-related sanctions, including through the use of virtual currency, and is committed to using its broad enforcement authorities to act against violations and to promote compliance.
This guidance follows a recent alert from Treasury’s Financial Crimes Enforcement Network (FinCEN), advising all financial institutions to be vigilant against potential efforts to evade the sanctions and restrictions on Russia. The alert provides examples of red flags to assist in identifying suspected sanctions evasion activity and reminds financial institutions of their reporting obligations under the Bank Secrecy Act.
IMPLEMENTING THE EXPANSIVE NEW EXECUTIVE ORDER
Today President Biden issued the E.O. of March 11, 2022 to ban further imports and exports related to Russia, consistent with commitments made by the G7 leaders to deny Russia export revenues and to ensure that our citizens are not underwriting Putin’s war.
Among other things, this E.O. prohibits the importation into the United States of the following products of Russian Federation origin: fish, seafood, and preparations thereof; alcoholic beverages; and non-industrial diamonds. In addition, this E.O. bans the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a U.S. person, wherever located, of U.S. dollar-denominated banknotes to the GoR or to any person located in the Russian Federation.
Pursuant to the Russian Harmful Foreign Activities Sanctions Regulations, which implement the E.O. of March 11, 2022, OFAC issued Russia-related GL 17 to authorize the import of existing purchases of prohibited products that are under pre-existing contract. OFAC also issued Russia-related GLs 18 and 19 to authorize certain activities regarding U.S. dollar-denominated banknotes as they pertain to personal remittances and U.S. persons, respectively.
For identifying information on the individuals and entities designated today, as well as new General Licenses and FAQs, click here.
1 Anna Zvereva from Tallinn, Estonia, CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0, via Wikimedia Commons