As tensions run high between Washington and Moscow over a possibly imminent Russian invasion of Ukraine, the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC") designated today four (4) current and former Ukrainian officials under Executive Order ("EO") 14024 dated April 15, 2021. In a press release issued earlier today, OFAC asserted the Russian Federal Security Service ("FSB") "recruit[s] Ukrainian citizens in key positions to gain access to sensitive information, threaten the sovereignty of Ukraine, and then leverage these Ukrainian officials to create instability in advance of a potential Russian invasion." OFAC also noted that Russian agents have sought to influence U.S. elections since at least 2016.
In today's action, OFAC added two (2) current Ukrainian Members of Parliament - Taras Kozak and Oleh Voloshyn - to the Specially Designated Nationals and Blocked Persons List ("SDN List") and labeled them FSB "pawns". OFAC accused Kozak of amplifying false narratives regarding the 2020 U.S. elections and Voloshyn of undermining Ukrainian government officials and advocating Russian interests. OFAC also added two (2) former Ukrainian officials to the SDN List - Volodymyr Oliynyk and Vladimir Sivkovich. OFAC asserts Oliynyk gathered information about Ukraine's critical infrastructure for the FSB and Sivkovich engaged in influence and disinformation campaigns targeting both the Ukraine and the U.S.
All four (4) SDN designations were made pursuant to EO 14024, which authorizes OFAC to impose sanctions on persons who act or purport to act for or on behalf of, directly or indirectly, the Government of the Russian Federation. As a result of the designations, all property and interests in property of these persons in the U.S. or controlled by U.S. persons must be blocked and reported to OFAC. U.S. persons are prohibited from sending or receiving any provision of funds, goods, or services to/from these newly designated SDNs. According to OFAC's "50% Ownership Rule," these sanctions also extend to any entities in which these SDNs directly or indirectly hold, either individually or in the aggregate with other SDNs, an ownership interest of 50% or more.
The U.S. has also recently signaled its readiness to impose additional sanctions if Russia proceeds with an invasion of Ukraine, but has not shared many details of its plans. On January 21, 2022, Deputy Secretary of the Treasury Wally Adeyemo in a conversation with Ukraine Minister of Finance Serhiy Marchenko "emphasized that the United States and its allies and partners are prepared to inflict significant costs on the Russian economy if Russia further invades Ukraine." Some news reports have forecasted that restrictions on semiconductor exports to Russia, sanctions against Russian financial institutions, and controls on foreign-produced goods going to Russia are among the options under consideration by the White House. However, any additional sanctions beyond the four (4) SDN designations reported in this post are purely speculative at this time.
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