Imposition Of Sanctions Measures In Response To The Developing Crisis In Ukraine

Author:Mr Renato Antonini, Sean T. Boyce, Michael Gurdak, Fahad Habib, Vladimir Lechtman, Eva L. Monard, Elizabeth Robertson, Harriet Territt and Sergei Volfson
Profession:Jones Day
 
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In recent weeks, a rapidly escalating crisis in Ukraine has led to the imposition of limited sanctions by the United States, the European Union, and Canada against certain Russian and Ukrainian parties. This Commentary summarizes the sanctions imposed to date and potential retaliatory sanctions being considered by the Russian parliament, with a focus on possible repercussions for clients doing business connected to Ukraine and Russia.

As recent events have demonstrated, the situation in Ukraine can evolve quickly. Jones Day will continue to keep significant developments under review.

UNITED STATES

In late February, the United States began taking steps to respond to the increasing violence in Ukraine. In mid-February, the United States moved to restrict and ban issuance of visas to approximately 20 senior members of the Ukrainian government and other individuals determined by the U.S. Department of State to be responsible for or complicit in human rights abuses related to political repression in Ukraine.

As events progressed and Russia moved to intervene, the United States took several high-level actions, including suspending bilateral discussions with Russia on trade, investment, and other matters, and its participation in preparations for the scheduled June G-8 Summit in Sochi.

On March 6, the United States further escalated its response, when President Obama issued an Executive Order declaring that the events in Ukraine constitute a national security threat under the International Emergency Economic Powers Act and authorizing more rigorous measures to address the actions and policies of persons who have contributed to the current state of affairs in Ukraine.

First, the Executive Order authorizes the U.S. Department of State to impose further Ukraine-related visa restrictions to deny visas to individuals determined, inter alia, to be responsible for or complicit in threatening the sovereignty and territorial integrity of Ukraine. The U.S. Department of State indicated that such additional restrictions would begin to take effect as of March 6.

Second, the Executive Order authorizes the blocking of property and interests in property of, and otherwise prohibits U.S. persons from dealing with, persons and entities1 determined by the Secretary of the Treasury, in consultation with the Secretary of State, to be, directly or indirectly, responsible for, complicit in, or to have engaged in the following activities:

Actions or policies that undermine the democratic processes or institutions in Ukraine; Actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine; Misappropriation of state assets of Ukraine or of an economically significant entity in Ukraine; or Assertion of governmental authority over any part or region of Ukraine without the authorization of the Ukrainian government. Blocking of the assets of designated persons typically must be reported to the U.S. Department of the Treasury's Office of Foreign Assets Control. While the United States has not yet designated any persons or entities pursuant to the authority of this Executive Order, such...

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