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The US Announces More Sanctions Against Russia & Designates Several Russian Shipping Companies & Vessels to SDN List

News & Insights 17 May 2022

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On 8 May 2022, the US announced another series of sanction measures against Russia. These measures include the designation of several Russian shipping companies and vessels.

The US Department of State designated/blocked eight...

Man with blue safety helmet

On 8 May 2022, the US announced another series of sanction measures against Russia. These measures include the designation of several Russian shipping companies and vessels.

The US Department of State designated/blocked eight Russian maritime-related entities and 69 of their vessels. OFAC concurrently placed those same entities and vessels on its Specially Designated Nationals and Blocked Persons (‘SDN’) List. The list of entities and vessels can be found in the State Department’s press release here and in OFAC’s sanctions announcement here. According to the State Department’s announcement, these sanctions were announced because Russia ‘leverages maritime shipping and other marine sector companies to advance its strategic aims, including by supporting the resupply of its troops and the continuation of its occupation of Crimea, and exploiting and exporting energy reserves.’

The eight blocked entities are:

  • the Russian Ministry of Defence’s Oboronlogistika OOO;
  • Russian maritime shipping companies:
    • SC South LLC
    • Northern Shipping Company
    • Transmorflot
    • M Leasing LLC
    • Marine Trans Shipping LLC
    • Nord Project LLC Transport Company
  • OOO Fertoing, a Russian maritime engineering company.

The blocked vessels include, among others, general cargo, and roll-on roll-off vessels as well as a crude oil tanker (m/t Polar Rock).

As a result of the designations, all property of the designated entities/vessels in the US or in the possession or control of US persons are blocked and must be reported to OFAC.  In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. All transactions by US persons or within (or transiting) the US that involve the blocked entities/vessels are prohibited unless otherwise authorized. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.

The above designations were made pursuant to EO 14024 which contains a typical ‘material assistance’ provision by which a non-US person may be subject to US sanctions if it has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, a blocked person. OFAC’s Russian Harmful Foreign Activities Sanctions FAQs provide guidance on OFAC’s interpretation of EO 14024’s material assistance provision (see, eg, FAQ 980 accessible here).

As with other sanction measures announced by the US and other authorities, we strongly recommend that members closely review the sanction measures announced by the US on May 8. We will continue to closely monitor the situation and update you about any future developments. If you have any queries in the meantime, please contact your usual club contact.

Categories: Sanctions, Ukraine / Russia

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