PRESS RELEASES
Announcement of Treasury Sanctions on Entities Within the Financial Services and Energy Sectors of Russia, Against Arms or Related Materiel Entities, and those Undermining Ukraine’s Sovereignty
July 16, 2014
(Archived Content)
Actions Implement Executive Order 13662 against
Two Russian Financial Institutions and Two Energy Firms.
Actions also Target Eight Defense Technology Entities, Three Separatists, One Entity Complicit in the Misappropriation of Ukrainian State Assets, and Four Russian Government Officials
WASHINGTON – In response to Russia’s continued attempts to destabilize eastern Ukraine and its ongoing occupation of Crimea, the U.S. Department of the Treasury today imposed a broad-based package of sanctions on entities in the financial services, energy, and arms or related materiel sectors of Russia, and on those undermining Ukraine’s sovereignty or misappropriating Ukrainian property. More specifically:
- Treasury imposed sanctions that prohibit U.S. persons from providing new financing to two major Russian financial institutions (Gazprombank OAO and VEB) and two Russian energy firms (OAO Novatek and Rosneft), limiting their access to U.S. capital markets;
- Treasury designated eight Russian arms firms, which are responsible for the production of a range of materiel that includes small arms, mortar shells, and tanks;
- Treasury designated the “Luhansk People’s Republic” and the “Donetsk People’s Republic,” which have asserted governmental authority over parts of Ukraine without the authorization of the Government of Ukraine; and Aleksandr Borodai, the self-declared “prime minister” of the Donetsk People’s Republic, for threatening the peace, security, stability, sovereignty, and territorial integrity of Ukraine;
- Treasury designated Feodosiya Enterprises, a key shipping facility in the Crimean peninsula, because it is complicit in the misappropriation of state assets of Ukraine; and
- Treasury designated four Russian government officials, including Sergey Beseda, a senior Russian Federal Security Service official.
These actions do more than build upon previous steps to impose costs on separatists and the Russian government. By imposing sanctions on entities within the financial services and energy sectors, Treasury has increased the cost of economic isolation for key Russian firms that value their access to medium- and long-term U.S. sources of financing. By designating firms in the arms or related materiel sector, Treasury has cut these firms off from the U.S. financial system and the U.S. economy.
“Russia has continued to destabilize Ukraine and provide support for the separatists, despite its statements to the contrary,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen. “Because Russia has failed to meet the basic standards of international conduct, we are acting today to open Russia’s financial services and energy sectors to sanctions and limit the access of two key Russian banks and two key energy firms to U.S. sources of financing, and to impose blocking sanctions against eight arms firms and a set of senior Russian officials.”
Identification of the Financial Services Sector of Russia and the Prohibition of Certain Types of Activities with Two Russian Banks Pursuant to E.O. 13662
Today, Treasury Secretary Jacob J. Lew determined that persons operating within Russia’s financial services sector may now be subject to targeted sanctions. Following Secretary Lew’s determination, Treasury imposed measures prohibiting U.S. persons and persons within the United States from transacting in, providing financing for, or otherwise dealing in new debt of longer than 90 days maturity or new equity for Gazprombank OAO and VEB, their property, or their interests in property. As a practical matter, this step will close the medium- and long-term U.S. dollar lending window to these banks, and will impose additional significant costs on the Russian Government for its continued activities in Ukraine.
We have not blocked the property or interests in property of these banks, nor have we prohibited transactions with them beyond these specific restrictions. However, the scope of the prohibited transaction types and the number of financial institutions may be expanded under E.O. 13662 if we decide to do so.
Gazprombank OAO is a Russian financial institution, which was originally established to provide financial services to companies in Russia’s energy industry, but has expanded to provide services to more than 45,000 companies and 3 million private individuals. Gazprombank OAO has more than 40 branches across Russia, and a number of international subsidiaries. Gazprombank OAO specializes in the private banking and corporate financing services.
VEB is a Russian state-owned financial institution that acts as a development bank and payment agent for the Russian government. It was formed June 8, 2007, pursuant to Russian federal law and is the legal successor to Vnesheconombank of the USSR, which was a specialized Russian state bank. VEB’s supervisory board is chaired by the Russian prime minister, and the chairman of the bank is appointed by the Russian president. VEB acts as an agent for the Russian Government for the purposes of accounting, servicing, and repaying the sovereign debts of the former USSR and Russia; accounting, servicing, and repaying government loans issued by the former USSR and Russia to foreign borrowers; collecting debts from legal entities of Russia and municipal governments; providing and executing state guarantees of Russia and monitoring projects implemented by Russia with involvement of international financial institutions.
Identification of the Energy Sector of Russia and the Prohibition of Certain Types of Activities with Two Russian Energy Firms Pursuant to E.O. 13662
Today, Secretary Lew determined that persons operating within Russia’s energy sector may now be subject to targeted sanctions. Following Secretary Lew’s determination, Treasury imposed measures that prohibit U.S. persons and persons within the United States from transacting in, providing financing for, or otherwise dealing in new debt of longer than 90 days maturity for Russian energy firms OAO Novatek and Rosneft, their property, or their interests in property. As with the financial institutions, we have not blocked the property or interests in property of these companies, nor prohibited transactions with them beyond these specific restrictions. However, the scope of the prohibited transaction types and the number of energy companies may be expanded under the authorities of E.O. 13662, if the Russian government does not take steps to de-escalate the situation in Ukraine.
OAO Novatek is Russia’s largest independent natural gas producer.
Rosneft is Russia’s largest petroleum company and third largest gas producer. Treasury designated Rosneft’s President and Chairman of the Board, Igor Sechin, on April 28, 2014, pursuant to E.O. 13661.
Imposition of Sanctions on Eight Firms Pursuant to E.O. 13661 for Operating in the Arms or Related Materiel Sector in the Russian Federation
Treasury today has also designated and blocked the assets of Almaz-Antey, Federal State Unitary Enterprise State Research and Production Enterprise Bazalt, JSC Concern Sozvezdie, JSC MIC NPO Mashinostroyenia, Kalashnikov Concern, KBP Instrument Design Bureau, Radio-Electronic Technologies, and Uralvagonzavod pursuant to E.O. 13661 for operating in the arms or related materiel sector in the Russian Federation. The designated firms are responsible for the production of a range of materiel, from small arms to mortar shells to tanks. As a result of today’s action under E.O. 13661, any assets of the entities designated that are within U.S. jurisdiction must be frozen. In addition, transactions by U.S. persons or within the United States involving the entities designated today under E.O. 13661 are generally prohibited.
Almaz-Antey manufactures surface-to-air missile systems currently used by the Russian military.
Federal State Unitary Enterprise State Research and Production Enterprise Bazalt (“Bazalt”) is involved in the design and construction of air launched ordnance, rocket propelled grenades, and armored fighting vehicle ammunition. Bazalt’s manufacturing interests include aerial bombs, mortar shells, grenades, anti-tank and anti-saboteur grenade launchers, and projectiles of all types and calibers.
JSC Concern Sozvezdie develops and produces high-tech control and communication systems, radio electronic warfare and special equipment for military forces. JSC Concern Sozvezdie focuses on three primary lines of production: military-oriented production, dual-purpose products, and dual-purpose products and professional communication and control systems. JSC Concern Sozvezdie’s main activities include producing and developing materiel including automated control systems and communication systems for the tactical sector, automated control systems and communication systems for anti-missile defense and air defense systems, and automated communication systems and electronic warfare tools. The company produces systems and devices related to electronic warfare, such as small manpack and portable jammers. The products are designed to disrupt enemy army operations, to reduce staff and equipment loss, and to improve the operation of armed forces by radio jamming of enemy weapon control systems based on radio frequencies.
JSC MIC NPO Mashinostroyenia is a leading Russian rocketry company responsible for defense programs involving cruise missile complexes capable of surface, underwater, and ground platform-based launches. JSC MIC NPO Mashinostroyenia’s involvement in Russia’s strategic nuclear forces includes the manufacture of intercontinental ballistic rockets and the development of space systems, spacecraft, and automatic and manned orbital stations in support of Russia’s Ministry of Defense.
Kalashnikov Concern produces a number of military weapons, including multiple grades and versions of assault rifles, grenade launchers, sniper rifles, military shotguns, and aircraft cannons. Kalashnikov Concern is the largest firearms producer in Russia and is a subsidiary of Russia’s State Corporation of Russian Technologies (Rostec).
KBP Instrument Design Bureau is a research and production center that creates precision-guided weapons. KBP Instrument Design Bureau develops antitank missile systems and assault armaments, weapon systems for main battle tanks and lightly armored vehicles, guided artillery projectiles and guided missile systems, short-range air defense systems, gun armament and associated ammunition, combat small arms, and hunting/sporting guns.
Radio-Electronic Technologies designs and produces electronic warfare equipment including weapons-control systems, friend-or-foe identification (IFF) systems, avionics, operational and tactical systems, electronic warfare and intelligence equipment, special measuring instrumentation, and plugs, electric connectors, and cable products.
Uralvagonzavod is a Russian government-owned company that builds a variety of military equipment, including tanks.
Imposition of Sanctions on Two Entities and One Individual Pursuant to E.O. 13660
The following two entities and one individual are being designated and blocked today pursuant to E.O. 13660 for threatening the peace, security, stability, sovereignty, or territorial integrity of Ukraine.
The Treasury Department has determined that the Luhansk People’s Republic (LPR) has asserted governmental authority over a part or region of Ukraine without the authorization of the Government of Ukraine. The self-proclaimed LPR has asserted governmental authority through a number of actions, including issuing a declaration of martial law; banning the sale of corporate rights, production facilities, companies, and other assets; controlling the border guard checkpoints of Izvarino, Dolzhanskoye, and Krasnyi Partizansk on the Ukrainian-Russian border; and, shooting down a Ukrainian military transport jet as it attempted to land in Luhansk. The LPR also elected a leader and passed its own constitution on May 11, 2014.
The Treasury Department has also determined the Donetsk People’s Republic to have asserted governmental authority over a part or region of Ukraine without the authorization of the Government of Ukraine. The militia in the self-proclaimed Donetsk People’s Republic is defying the peaceful settlement regime, continues combat operations, and has seized and occupies regional government buildings, using them as its headquarters and firing positions. Igor Strelkov, the leader of the militia of the Donetsk People’s Republic, rejected Ukrainian President Petro Poroshenko’s peace plan.
Aleksandr Borodai is the self-declared “prime minister” of the “Donetsk People’s Republic” in Ukraine and has vowed to expel Ukraine’s army from his new domain and resist any bid to recapture the city. Borodai was in Crimea as an advisor to Sergei Aksyonov, the separatist prime minister who oversaw the territory’s purported annexation by Russia. Treasury designated Aksyonov pursuant to E.O. 13660 on March 17, 2014.
Imposition of Sanctions on Crimean Entity Pursuant to E.O. 13660
The following Crimea-based entity is being designated pursuant to E.O. 13660 for being complicit in the misappropriation of state assets of Ukraine.
Feodosiya Enterprise operates a key shipping facility in the Crimean peninsula for oil imports and exports. Prior to Russia’s purported annexation of Crimea, Feodosiya Enterprise had been controlled by the Ukrainian state-controlled gas company Naftogaz. On March 25, 2014, the separatist self-styled “Crimean Parliament” nationalized Feodosiya Enterprise and decreed that the self-styled “Crimean Ministry of Fuel and Energy” would be the governing body of Feodosiya Enterprise. The separatist “Minister of Fuel and Energy” asserting authority in occupied Crimea has confirmed that, as of April 15, 2014, separatist authorities in Crimea were provided with fuel by Russian oil companies using the storage facility operated by Feodosiya Enterprise.
Imposition of Sanctions on Four Individuals Pursuant to E.O. 13661
The following four individuals are being designated today pursuant to E.O. 13661 for their status as Russian government officials.
Sergey Besesda heads Russia’s Federal Security Service (FSB)’s Fifth Service, also known as the Service for Operational Information and International Communications.
Oleg Savelyev is Russia’s Minister for Crimean Affairs. In this capacity, Savelyev is responsible for the integration of occupied Crimea into the Russian Federation following Russia’s purported annexation of Crimea from Ukraine.
Sergei Neverov is the Deputy Chairman of the State Duma of the Russian Federation. Neverov is responsible for initiating legislation to integrate the purportedly annexed Ukrainian region of Crimea into the Russian Federation.
Igor Shchegolev is an Aide to the President of the Russian Federation.
As a result of today’s actions under E.O. 13660 and E.O. 13661, any assets of the entities or individuals designated that are within U.S. jurisdiction must be frozen. Additionally, transactions by U.S. persons or within the United States involving the entities or individuals designated today under E.O. 13660 or E.O. 13661 are generally prohibited.
For identifying information on the individuals and entities named in this release, please click here.
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Ukraine-related Sanctions; Publication of Executive Order 13662 Sectoral Sanctions Identifications List
AMENDMENT TO THE 7/16/2014 ANNOUNCEMENT (MADE ON 7/21/2014):
On 7/16/2014 OFAC also released Ukraine General License Number 1 – Authorizing Certain Transactions Related to Derivatives under Directive 1 and 2 of Executive Order 13662.
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Today, OFAC is introducing the Sectoral Sanctions Identifications List to identify persons operating in sectors of the Russian economy identified by the Secretary of the Treasury pursuant to Executive Order 13662. Directives found within the list describe prohibitions on dealings with the persons identified.
Please see the following frequently asked questions for more information on sectoral sanctions.
SPECIALLY DESIGNATED NATIONALS LIST UPDATE
In addition, the following individuals have been added to OFAC’s SDN List:
BESEDA, Sergey (a.k.a. BESEDA, Sergei; a.k.a. BESEDA, Sergei Orestovoch); DOB 1954; Commander of the Fifth Service of the FSB; Commander of the Service for Operational Information and International Communications of the FSB; FSB Colonel General; Colonel-General (individual) [UKRAINE2].
BORODAI, Aleksandr (a.k.a. BORODAI, Alexander); DOB 25 Jul 1972; nationality Russia (individual) [UKRAINE].
NEVEROV, Sergei Ivanovich (a.k.a. NEVEROV, Sergei; a.k.a. NEVEROV, Sergey); DOB 21 Dec 1961; POB Tashtagol, Russia; Deputy Chairman of the State Duma of the Russian Federation; Member of the State Duma Committee on Housing Policy and Housing and Communal Services (individual) [UKRAINE2].
SAVELYEV, Oleg Genrikhovich; DOB 27 Oct 1965; POB St. Petersburg, Russia; Minister for Crimean Affairs (individual) [UKRAINE2].
SHCHEGOLEV, Igor (a.k.a. SHCHYOGOLEV, Igor Olegovich); DOB 10 Nov 1965; POB Vinnitsa, Ukraine; alt. POB Vinnytsia, Ukraine; Aide to the President of the Russian Federation (individual) [UKRAINE2].
The following entities have been added to OFAC’s SDN List:
DONETSK PEOPLE’S REPUBLIC, Donetsk Region, Ukraine [UKRAINE].
FEDERAL STATE UNITARY ENTERPRISE STATE RESEARCH AND PRODUCTION ENTERPRISE BAZALT (a.k.a. FEDERAL STATE UNITARY ENTERPRISE, STATE RESEARCH AND PRODUCTION ENTERPRISE BAZALT; a.k.a. FSUE SRPE BAZALT; a.k.a. STATE RESEARCH AND PRODUCTION ENTERPRISE BAZALT), 32 Velyaminovskaya, Moscow 105318, Russia; Website www.bazalt.ru; Email Address moscow@bazalt.ru [UKRAINE2].
FEODOSIYA ENTERPRISE (a.k.a. FEODOSIA OIL PRODUCTS SUPPLY CO.; a.k.a. FEODOSIYA ENTERPRISE ON PROVIDING OIL PRODUCTS; a.k.a. FEODOSIYSKE COMPANY FOR THE OIL; a.k.a. THEODOSIYA OIL TERMINAL), Feodosiya, Geologicheskaya str. 2, Crimea 98107, Ukraine; Feodosia, Str. Geological 2, Crimea 98107, Ukraine [UKRAINE].
JOINT STOCK COMPANY CONCERN RADIO-ELECTRONIC TECHNOLOGIES (a.k.a. CONCERN RADIO-ELECTRONIC TECHNOLOGIES; a.k.a. “KRET”), 20/1 Korp. 1 ul. Goncharnaya, Moscow 109240, Russia; Website http://www.kret.com; Registration ID 1097746084666 [UKRAINE2].
JOINT STOCK COMPANY CONCERN SOZVEZDIE (a.k.a. JSC CONCERN SOZVEZDIE), 14 Plekhanovskaya Street, Voronezh, Russia; 14 ul. Plekhanovskaya, Voronezh, Voronezhskaya obl. 394018, Russia; Registration ID 1053600445337 [UKRAINE2].
JOINT STOCK COMPANY MILITARY-INDUSTRIAL CORPORATION NPO MASHINOSTROYENIA (a.k.a. JOINT STOCK COMPANY MILITARY INDUSTRIAL CONSORTIUM NPO MASHINOSTROYENIA; a.k.a. JSC MIC NPO MASHINOSTROYENIA; a.k.a. MIC NPO MASHINOSTROYENIA JSC; a.k.a. MIC NPO MASHINOSTROYENIYA JSC; a.k.a. MILITARY INDUSTRIAL CORPORATION NPO MASHINOSTROENIA OAO; a.k.a. OPEN JOINT STOCK COMPANY MILITARY INDUSTRIAL CORPORATION SCIENTIFIC AND PRODUCTION MACHINE BUILDING ASSOCIATION; a.k.a. VOENNO-PROMYSHLENNAYA KORPORATSIYA NAUCHNO-PROIZVODSTVENNOE OBEDINENIE MASHINOSTROENIYA OAO; a.k.a. VPK NPO MASHINOSTROENIYA), 33, Gagarina St., Reutov-town, Moscow Region 143966, Russia; 33 Gagarin Street, Reutov, Moscow Region 143966, Russia; 33 Gagarina ul., Reutov, Moskovskaya obl 143966, Russia; Website www.npomash.ru; Email Address export@npomash.ru; alt. Email Address vpk@npomash.ru; Registration ID 1075012001492 (Russia); Tax ID No. 5012039795 (Russia); Government Gazette Number 07501739 (Russia) [UKRAINE2].
JOINT-STOCK COMPANY CONCERN ALMAZ-ANTEY (a.k.a. ALMAZ-ANTEY CORP; a.k.a. ALMAZ-ANTEY DEFENSE CORPORATION; a.k.a. ALMAZ-ANTEY JSC; f.k.a. OTKRYTOE AKTSIONERNOE OBSHCHESTVO KONTSERN PVO ALMAZ ANTEI), 41 ul.Vereiskaya, Moscow 121471, Russia; Website almaz-antey.ru; Email Address antey@almaz-antey.ru [UKRAINE2].
KALASHNIKOV CONCERN (a.k.a. CONCERN KALASHNIKOV; a.k.a. IZHEVSKIY MASHINOSTROITEL’NYI ZAVOD OAO; f.k.a. IZHMASH R&D CENTER; f.k.a. JSC NPO IZHMASH; f.k.a. NPO IZHMASH OAO; a.k.a. OJSC CONCERN KALASHNIKOV; f.k.a. OJSC IZHMASH; f.k.a. SCIENTIFIC PRODUCTION ASSOCIATION IZHMASH JOINT STOCK COMPANY), 3, Derjabin Pr., Izhevsk, Udmurt Republic 426006, Russia; Registration ID 1111832003018 [UKRAINE2].
KONSTRUKTORSKOE BYURO PRIBOROSTROENIYA OTKRYTOE AKTSIONERNOE OBSHCHESTVO (a.k.a. INSTRUMENT DESIGN BUREAU; a.k.a. JSC KBP INSTRUMENT DESIGN BUREAU; a.k.a. KBP INSTRUMENT DESIGN BUREAU; a.k.a. KBP INSTRUMENT DESIGN BUREAU JOINT STOCK COMPANY; a.k.a. “KBP OAO”), 59 Shcheglovskaya Zaseka ul., Tula 300001, Russia; Website www.kbptula.ru; Email Address kbkedr@tula.net; Registration ID 1117154036911 (Russia); Government Gazette Number 07515747 (Russia) [UKRAINE2].
LUHANSK PEOPLE’S REPUBLIC (a.k.a. LUGANSK PEOPLE’S REPUBLIC; a.k.a. PEOPLE’S REPUBLIC OF LUHANSK), Luhansk Region, Ukraine [UKRAINE].
URALVAGONZAVOD (a.k.a. NAUCHNO-PROIZVODSTVENNAYA KORPORATSIYA URALVAGONZAVOD OAO; a.k.a. NPK URALVAGONZAVOD; a.k.a. NPK URALVAGONZAVOD OAO; a.k.a. OJSC RESEARCH AND PRODUCTION CORPORATION URALVAGONZAVOD; a.k.a. RESEARCH AND PRODUCTION CORPORATION URALVAGONZAVOD; a.k.a. RESEARCH AND PRODUCTION CORPORATION URALVAGONZAVOD OAO; a.k.a. URALVAGONZAVOD CORPORATION; a.k.a. “UVZ”), 28, Vostochnoye shosse, Nizhni Tagil, Sverdlovsk region 622007, Russia; 28 Vostochnoe shosse, Nizhni Tagil, Sverdlovskaya oblast 622007, Russia; 40, Bolshaya Yakimanka Street, Moscow 119049, Russia; Vistochnoye Shosse, 28, Nizhny Tagil 622007, Russia; Website http://www.uvz.ru/; alt. Website http://uralvagonzavod.com/; Email Address web@uvz.ru [UKRAINE2].
Sectoral Sanctions Identifications List Update
The following entities have been added to OFAC’s Sectoral Sanctions Identifications List:
GAZPROMBANK OAO (a.k.a. GAZPROMBANK GAS INDUSTRY OJSC; a.k.a. GAZPROMBANK OJSC; a.k.a. GAZPROMBANK OPEN JOINT STOCK COMPANY; a.k.a. GAZPROMBANK OTKRYTOE AKTSIONERNOE OBSHCHESTVO; a.k.a. GPB, OAO; a.k.a. GPB, OJSC), 16, Building 1, Nametkina St., Moscow 117420, Russia; 63, Novocheremushkinskaya St., Moscow 117418, Russia; SWIFT/BIC GAZPRUMM; Website www.gazprombank.ru; Email Address mailbox@gazprombank.ru; Registration ID 1027700167110; Tax ID No. 7744001497; Government Gazette Number 09807684 [UKRAINE-EO13662].
OAO NOVATEK (a.k.a. FINANSOVO-INVESTITSIONNAYA KOMPANIYA NOVAFININVEST OAO; a.k.a. NOVATEK), 2, Udaltsova Street, Moscow 119415, Russia; 22 A, Pobedy Street, Tarko-Sale, Yamalo-Nenets Autonomous District 629580, Russia; 22a Pobedy ul., Tarko-Sale, Purovski raion, Tyumenskaya Oblast 629850, Russia; Email Address novatek@novatek.ru; Registration ID 1026303117642 (Russia); Government Gazette Number 33556474 (Russia) [UKRAINE-EO13662].
OPEN JOINT-STOCK COMPANY ROSNEFT OIL COMPANY (a.k.a. OAO ROSNEFT OIL COMPANY; a.k.a. OIL COMPANY ROSNEFT; a.k.a. OJSC ROSNEFT OIL COMPANY; a.k.a. ROSNEFT; a.k.a. ROSNEFT OIL COMPANY), 26/1 Sofiyskaya Embankment, Moscow 115035, Russia; Website www.rosneft.com; alt. Website www.rosneft.ru; Email Address postman@rosneft.ru; Registration ID 1027700043502 (Russia); Tax ID No. 7706107510 (Russia); Government Gazette Number 00044428 (Russia) [UKRAINE-EO13662].
VNESHECONOMBANK (a.k.a. BANK FOR DEVELOPMENT AND FOREIGN ECONOMIC AFFAIRS (VNESHECONOMBANK) STATE CORPORATION; a.k.a. BANK RAZVITIYA I VNESHNEEKONOMICHESKOI DEYATELNOSTI (VNESHEKONOMBANK) GOSUDARSTVENNAYA KORPORATSIYA; a.k.a. “VEB”), 9 Akademika Sakharova prospekt, Moscow 107996, Russia; SWIFT/BIC BFEA RU MM; Website http://www.veb.ru; Email Address info@veb.ru; BIK (RU) 044525060 [UKRAINE-EO13662].