Update on US sanctions concerning Crimea

• USA

• Competition, EU and Trade

08-01-2015

On 19 December 2014 President Obama signed Executive Order 13685 (in conjunction with previous Executive Orders 13660, 13661 and 13662 respectively) limiting the actions US persons can perform in the Crimea region of Ukraine (“Crimea”). The Executive Order prohibits:

• new investment in Crimea by a US person, wherever located;
•  imports into the US, directly or indirectly, of any goods, services, or technology from Crimea; 
• exports, re-exports, sale, or supply, directly or indirectly, from the US, or by a US person, of any goods, services, or technology to Crimea; and 
• any approval, financing, facilitation, or guarantee by a US person, of a transaction by a foreign person that would be prohibited if performed by a US person.

The Executive Order also blocks any person determined by the US Government to:

      i.        operate in Crimea; 

     ii.        be a leader of an entity operating in Crimea; 

    iii.        be owned or controlled by or to have acted or purported to act for or on behalf of any person whose property and interests in property are blocked under this Executive Order; or 

   iv.        have materially assisted, sponsored, or provided financial, material or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked under this Executive Order.

Unrestricted immigrant and non-immigrant entry into the US has also been suspended for people that come under the above criteria. Donations that benefit persons whose property and interests in property are blocked under this Executive Order are also prohibited.

General License No. 5

On 30 December 2014, the Office of Foreign Assets Control (“OFAC”) issued General License No. 5 authorising certain otherwise prohibited activities necessary to wind down operations involving Crimea.

General License No. 5 allows transactions and activities prohibited under Executive Order 13685 that are “ordinarily incident and necessary” to the:

• winding down or divestiture or transfer to a foreign person of a US person’s share of ownership, including an equity interest, in pre-20 December 2014 investments located in Crimea; 
• winding down of operations, contracts, or other agreements that were in effect prior to 20 December 2014, involving the exportation, re-exportation, sale, or supply of goods, services, or technology to Crimea; or 
• winding down of operations, contracts, or other agreements that were in effect prior to 20 December 2014, involving the importation of any goods, services, or technology from Crimea into the US.

Such transactions and activities are authorised until 1 February 2015. General License No. 5 does not authorise new export, re-export sale, or supply of goods, services or technology from the US or by a US person to Crimea or new importation in the US of goods, series or technology from Crimea, except to wind down operations, contracts or other agreements otherwise prohibited by Executive Order 13685.

Any US persons participating in such transactions must file a report with OFAC within 10 business days after the wind-down activities conclude.