If Russia doesn’t invade Ukraine, the U.S. and allies should still move forward with some sanctions to impose consequences on the Kremlin, experts and former government officials said. Those may include more sanctions against Russian oligarchs, they said, and possibly Nord Stream 2.
Ian Cohen
Ian Cohen, Deputy Managing Editor, is a reporter with Export Compliance Daily and its sister publications International Trade Today and Trade Law Daily, where he covers export controls, sanctions and international trade issues. He previously worked as a local government reporter in South Florida. Ian graduated with a journalism degree from the University of Florida in 2017 and lives in Washington, D.C. He joined the staff of Warren Communications News in 2019.
Although many companies could be affected by a potential expansion of the U.S. foreign direct product rule if Russia invades Ukraine, the U.S., the United Kingdom and Canada can also deploy other export restrictions that could have significant compliance implications, Baker McKenzie lawyers said. Those controls could range from more strict licensing policies to a complete trade embargo on certain Russian annexed territories.
More than 30 Senate Republicans introduced a bill Feb. 15 that would impose new sanctions against Russia and expedite certain U.S. arms sales as President Vladimir Putin threatens to invade Ukraine. The bill, titled the Never Yielding Europe’s Territory Act, would mandate post-invasion sanctions against the Russian-backed Nord Stream 2 pipeline and various Russian government officials, military leaders, oligarchs and banks. The bill would also impose sanctions on members of Putin’s inner circle regardless of whether an invasion occurs.
The State Department’s Directorate of Defense Trade Controls this week released an updated version of its guidelines for preparing agreements and several other newly issued or updated guidance documents. The updated agreement guidelines, which were previewed by DDTC’s licensing director last week (see 2202100020), revises and restructures the guidance “in a more logical and orderly fashion,” the agency said Feb. 14.
Important questions still surround the implementation of a potential multilateral sanctions package against Russia, economic and security experts said, including U.S. efforts to enforce an expansion of the foreign-direct product rule. Although details may not yet be clear, a former State Department official warned that new U.S. sanctions against Russia could soon turn strict enough to mirror trade restrictions against Iran.
The Bureau of Industry and Security added seven entities to the Entity List for nuclear and nonproliferation reasons, including one company in China, five in Pakistan and one in the United Arab Emirates, BIS said. The additions take effect Feb. 14.
BIS is preparing to “soon” issue another set of export controls that will cover both emerging and foundational technologies, said Matt Borman, the Bureau of Industry and Security’s deputy assistant secretary of export administration. The controls, briefly mentioned by a senior BIS official last month (see 2201280045), would represent the first set of formal export restrictions over foundational technologies since Congress passed the Export Control Reform Act in 2018.
The Los Angeles and Long Beach ports again postponed a new surcharge meant to incentivize the movement of dwelling containers (see 2110280031), the two ports announced Feb. 11. The ports originally planned to begin imposing the fee Nov. 15, but have postponed it each week since. The latest extension delays the effective date until Feb. 18.
The State Department has crafted new guidelines for preparing defense trade agreements and plans to release them soon, said Catherine Hamilton, licensing director at the Directorate of Defense Trade Controls. She said the agency also plans to make changes to the International Traffic in Arms Regulations to reflect the new document, which would update submission guidelines for Technical Assistance Agreements, Manufacturing License Agreements, and Warehouse and Distribution Agreements.
Although the Commerce and State departments have been able to conduct some export end-use checks during the COVID-19 pandemic, officials said both agencies continue to face challenges scheduling on-site inspections.