President Biden Bans New Investment in and Export of Certain Services to Russia

President Joseph R. Biden signed an Executive Order ("E.O.") prohibiting new investment in and exportation of certain services to the Russian Federation. The new E.O. ("Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression") further expands the scope of the prohibitions contained in E.O. 14024 ("Blocking Property with Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation"), E.O. 14039 ("Blocking Property With Respect to Certain Russian Energy Export Pipelines") and E.O. 14066 ("Prohibiting Certain Imports and New Investments With Respect to Continued Russian Federation Efforts To Undermine the Sovereignty and Territorial Integrity of Ukraine") in response to the Russian invasion of Ukraine.

The new E.O. prohibits:

• "new investment in the Russian Federation" by a U.S. person, irrespective of location;
• the "exportation, re-exportation, sale, or supply" of services to be defined by the Secretary of the Treasury, by a U.S. person, irrespective of location, or from the United States, directly or indirectly to the Russian Federation;
• the "approval, financing, facilitation or guarantee" by a U.S. person, irrespective of location, of a transaction by a foreign person where the transaction would otherwise be banned if conducted by a U.S. person or within the U.S.; and
• "any conspiracy formed to violate" the prohibitions set forth in the E.O.

Additionally, OFAC issued new U.S. sanctions aimed at Russia’s economy pursuant to E.O. 14024. OFAC stated that it was implementing "full blocking sanctions" on Russia’s largest state-owned and private banks, Sberbank and Alfa-Bank. OFAC also updated its Specially Designated Nationals and Blocked Persons List ("SDN" list) to include relatives of President Putin and Foreign Minister Lavrov, as well as all Russian Security Council members. Further, OFAC released six new or amended general licenses under the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR Part 587:

• General License No. 8B, authorizing transactions related to energy;
• General License No. 9B, authorizing transactions related to dealings in certain debt or equity;
• General License No. 10B, authorizing certain transactions related to derivatives contracts;
• General License No. 21, authorizing the wind down of SberbankCIB USA, Inc.;
• General License No. 22, authorizing the wind down of transactions involving Sberbank; and
• General License No. 23, authorizing the wind down of transactions involving Alfa-Bank;