Trump signs new Russia sanctions

On 2 August 2017, President Trump signed new sanctions against Russia. After approval by the Senate and the House of Representatives, on which we wrote before (see here and here), the sign-off was the last step prior to the entry into force of the new sanctions. As described in our previous posts, the bill introduces a Congressional approval procedure before any waiver, suspension, reduction, relief from, or other limitation of the application of sanctions with respect to the Russian Federation. Also, the bill introduces many expanded sectorial sanctions, mainly to Russia’s financial and oil and gas sectors. Pursuant to the bill, US persons will be prohibited from involvement in new financing of designated banks and oil and gas companies, covering new debt to the banks of longer than 14 days (which was 30 days prior to this new bill, similar to EU sanctions) and new debt to the oil and gas companies with a maturity exceeding 60 days. Furthermore, the sanctions related to the provision of goods, services (except for financial services), or technology in support of exploration or production for new deepwater, Arctic offshore, or shale projects are expanded to cover any exportation, or reexportation, directly or indirectly,  by US persons or from the US (1) that have the potential to produce oil, and (2) that involve any person determined to be subject to the directive or the property or interests in property of such a person who has a controlling interest or a substantial non-controlling ownership interest in such a project defined as not less than a 33 percent interest.

Most sensitive is the introduction of new secondary sanctions against, among other things, the development of pipelines in the Russian Federation. Secondary sanctions apply to all persons, including non-US persons. Briefly put, any investment by any person in such pipelines, or the sale of goods, services, technology, information, or support exceeding EUR 1 mln or an aggregate of 5 mln in one year is subject to five or more sanctions of a total of 12 sanctions described in the bill. The EU and Germany have already indicated that they will retaliate. Russia has already expelled 755 US diplomats in response to the sanctions. The bill also introduces new sanctions against Iran, including the designation of the Iranian Revolutionary Guard as a terrorist organisation, and North Korea, including a travel ban for all US persons to North Korea, subject to the forfeiture of the US passport.

B&A Law advises many companies and financial institutions on EU and US sanctions. It possesses a wide network of highly qualified and reputable international lawyers specialized in sanctions and export controls. Should you have any questions related hereto, please feel free to contact us at info@balaw.nl or at +31 (0)20 260 0082.

 

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