U.S., EU Intensify Economic Sanctions Against Russia

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Sandler, Travis & Rosenberg Trade Report Sep 16, 2014

The United States and the European Union have implemented additional economic sanctions against Russia in response to what they claim are continued and deliberate efforts to destabilize eastern Ukraine. Officials said these sanctions could be amended, suspended or repealed if Russia acts to ease tensions. According to press reports, Moscow has responded by threatening to expand its restrictions on imports from the U.S. and EU, which already cover many agricultural products, to include used cars, textile and apparel goods, and other consumer products.

U.S. Measures

Debt Financing. The Treasury Department determined that persons operating within Russia’s defense and related materiel sector may now be subject to targeted sanctions under Executive Order 13662 and subsequently prohibited transactions by U.S. persons or within the U.S. involving new debt of greater than 30 days maturity issued by a major Russian conglomerate that operates in this sector. Treasury has also (1) added Russia’s largest bank to the list of entities to which U.S. persons may not provide equity or certain long-term debt financing, (2) tightened existing debt financing restrictions by reducing from 90 days to 30 days the maturity period for new debt issued by the six Russian banks subject to these restrictions, and (3) prohibited transactions in, the provision of financing for, or other dealings in new debt of greater than 90 days maturity issued by two additional Russian energy companies.

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