New grounds for blocking sanctions
Executive Order No 14024 of 15 April 2021 (“E.O. 14024”) authorises the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) to introduce blocking sanctions against persons that operate or have operated in certain sectors of the Russian economy.The Determination of 10 January 2025, made pursuant to E.O. 14024, expanded the list of affected sectors to include Russian energy sector. OFAC defines the term “energy sector of the Russian Federation economy” as including:
- the procurement, exploration, extraction, drilling, mining, harvesting, production, refinement, liquefaction, gasification, regasification, conversion, enrichment, fabrication, manufacturing, testing, financing, distribution, purchase or transport to, from, or involving the Russian Federation, of petroleum, including crude oil, lease condensates, unfinished oils, natural gas, liquefied natural gas, natural gas liquids, or petroleum products, or other products capable of producing energy, such as coal, wood, or agricultural products used to manufacture biofuels;
- the development, production, testing, generation, transmission, financing, or exchange of power, through any means, including nuclear, electrical, thermal, and renewable, to, from, or involving the Russian Federation; and
- any related activities, including the provision or receipt of goods, services, or technology to, from, or involving the energy sector of the Russian economy.
Extension of the SDN List
OFAC has substantially extended the Specially Designated Nationals and Blocked Persons list (“SDN” and “SND List”). Most of the new SDNs were added to the list on the new grounds: for operating in the Russian energy sector. Among those added are:- Gazprom Neft PJSC and its subsidiaries, including Gazprom Neft Shelf LLC, Gazpromneft Moscow Refinery JSC, Gazpromneft Aero JSC, Gazpromneft Vostok LLC, Gazprom Neft Kazakhstan LLC, Gazprom Neft International SA (Luxembourg), etc;
- Surgutneftegas PJSC and its subsidiaries, including Surgutneftegasbank JSC, Kaliningradnefteprodukt LLC, PO Kirishinefteorgsintez LLC, Lengiproneftekhim LLC, Pskovnefteprodukt LLC, etc;
- Sovcomflot PJSCNote that Sovcomflot was added to the SDN List on 23 February 2024 for operating in the marine sector of the Russian economy and also due to being controlled by the Russian Government. On 10 January 2025, the US regulator simply added new grounds for Sovcomflot’s inclusion in the SDN List: “transactions in the Russian energy sector.”, its tankers and vessels, and two UAE-based companies, Fornax Ship Management FZCO and Stream Ship Management FZCO, which OFAC believes have been used by Sovcomflot PJSC to circumvent sanctions;
- Ingosstrakh PJSC and Alfastrakhovanie JSC;
- Six Russian owners and operators of tankers and vessels, including Gazpromneft Marine Bunker LLC and Rosnefteflot JSC;
- over 180 vessels comprising the Russian “shadow fleet,” their owners and operators;
- over 15 foreign companies involved in trading of Russian oil;
- over 30 oilfield service providers, including Gazprom Shelfproject JSC, OFS Technologies JSC, Investgeoservis JSC, Naftagas Drilling LLC, RN Drilling LLC and Taimyrburservis LLC; and
- 13 top managers of Russian energy companies and officials of the Russian Ministry of Energy.
- These restrictive measures also apply to legal entities that are not on the SDN List, but are owned 50% or more, directly or indirectly, by one or more SDNs.
- all US-based property of SDNs held in the possession or under the control of US Persons US sanctions are applied to:
- US citizens or lawful permanent residents, regardless of their physical location;
- entities organised under the laws of the United States or any jurisdiction within the United States (including their branches and representative offices outside the US); and
- other persons in the United States
(jointly “US Persons”) shall be blocked; and - US Persons are prohibited from engaging in any transactions with SDNs and providing to them or receiving from them any benefits.
Ban on petroleum services
OFAC has also issued a new Determination pursuant to Executive Order No 14071 of 6 April 2022, banning the provision of petroleum services.Effective 27 February 2025, this ban applies to the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a US Person, wherever located, of petroleum services to any person located in the Russian Federation.
OFAC defines the term “petroleum services” as including:
- Services related to the exploration, drilling, well completion, production, refining, processing, storage, maintenance, transportation, purchase, acquisition, testing, inspection, transfer, sale, trade, distribution, or marketing of petroleum, including crude oil and petroleum products; and
- Any activities that contribute to Russia’s ability to develop its domestic petroleum resources or to the maintenance or expansion of Russia’s domestic production and refining.
- certain covered services related to the maritime transport of crude oil and petroleum products of Russian origin, provided that such crude oil or petroleum products are purchased at or below the determined price caps;
- any petroleum services related to isotopes derived from petroleum manufacturing that are used for medical, agricultural, or environmental purposes, such as Carbon-13; and
- any service in connection with the wind down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person.
General licences
OFAC has updated its existing general licences and issued new general licences authorising certain transactions under new sanctions restrictions:- General Licence No 8L authorises, until 12 March 2025, all transactions ordinarily incident and necessary to the wind down of any transaction related to energyThe term “related to energy” means (1) the extraction, production, refinement, liquefaction, gasification, regasification, conversion, enrichment, fabrication, transport, or purchase of petroleum, including crude oil, lease condensates, unfinished oils, natural gas liquids, petroleum products, natural gas, or other products capable of producing energy, such as coal, wood, or agricultural products used to manufacture biofuels, or uranium in any form, as well as (2) the development, production, generation, transmission, or exchange of power, through any means, including nuclear, thermal, and renewable energy sources. and involving persons specified in this general licence or their subsidiaries;
- General Licence No 115А authorises, until 30 June 2025, all transactions related to civil nuclear energyThe term “related to civil nuclear energy” means transactions undertaken solely to maintain or support civil nuclear projects initiated before 21 November 2024. and involving persons specified in this general licence or their subsidiaries;
- General Licence No 117 authorises, until 27 February 2025, all transactions ordinarily incident and necessary to the wind down of any transaction involving persons specified in this general licence or their subsidiaries, provided that any payment to such persons is made into a blocked account;
- General Licence No 118 authorises, until 27 February 2025, all transactions ordinarily incident and necessary to:
- the divestment or transfer, or the facilitation of the divestment or transfer, of debt or equity issued or guaranteed by persons specified in this general licence or their subsidiaries (“Covered Debt or Equity”) to non-US Persons;
- facilitating, clearing, and settling trades of Covered Debt or Equity that were placed prior to 10 January 2025; and
- the wind down of derivative contracts entered into prior to 10 January 2025 and involving the above persons or Covered Debt or Equity, provided that any payment to such persons is made into a blocked account.
- General Licence No 119 authorises, until 27 February 2025, all transactions ordinarily incident and necessary to the official business of diplomatic or consular missions of the Government of the Russian Federation and involving Gazprom Neft PJSC or its subsidiaries;
- General Licence No 120 authorises, until 27 February 2025, all transactions involving persons specified in this general licence or their subsidiaries, provided that any payment to such persons is made into a blocked account and that such transactions are ordinarily incident and necessary for:
- the safe docking and anchoring in port of any vessels in which any person listed in the annex to this general licence has a property interest (“Blocked vessels”);
- the preservation of the health or safety of the crew of any of the Blocked vessels;
- emergency repairs of any of the blocked vessels or environmental mitigation or protection activities relating to any of the blocked vessels; and
- the delivery and offloading of cargo involving persons listed in the annex to this general licence, provided that the cargo was loaded prior to 10 January 2025.
- General Licence No 121 authorises, until 28 June 2025, the provision of petroleum services if they are related to the following projects:
- The Caspian Pipeline Consortium;
- Tengizchevroil; and
- Sakhalin-2.
- General Licence No 26 authorises certain transactions prohibited under Executive Order No 13662 of 20 March 2014 and involving persons listed in the annex to this general licence or their subsidiaries.