Below, an OFAC sanctions attorney answers several questions regarding sanctions targeting the Crimea region.
Does OFAC periodically update the Ukraine-related sanctions? Why?
Yes. The Office of Foreign Assets Control (OFAC) periodically updates all of its sanctions programs, including the Ukraine-related sanctions. These updates have been more pronounced with the Ukraine-related sanctions due to the developing nature of the situation there. OFAC wants to make sure its sanctions program is consistent with, and complimentary to, U.S. foreign policy as it relates to the situation relating to Ukraine, Crimea, and Russia.
Did the United States impose sanctions on Crimea?
Yes. On December 19, 2014 the United States imposed fairly comprehensive, “country-based” sanctions on the Crimea region of Ukraine. The sanctions were imposed by Executive Order 13685. This is the fourth sanctions-related executive order issued by President Obama with respect to the situation in Ukraine.
Who does the Crimea region sanctions apply to?
The sanctions imposed by Executive Order 13685 apply to all United States persons. The term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States. This definition includes U.S. citizens and U.S. permanent residents who have Ukrainian citizenship or who reside in countries outside of the United States. One cannot avoid falling under the jurisdiction of U.S. sanctions by simply moving to a foreign country. Nor can a U.S. company lawfully evade sanctions by simple hiring foreign contractors to conduct an otherwise prohibited transaction.
What is prohibited by the Crimea region sanctions?
There are four primary prohibitions that make the Crimea region sanctions fairly comprehensive.
- A prohibition against new investment in the Crimea region of Ukraine by a United States person, wherever located;
- A prohibition against the importation into the United States, directly or indirectly, of any goods, services, or technology from the Crimea region of Ukraine;
- A prohibition against the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any goods, services, or technology to the Crimea region of Ukraine; and
- A prohibition against any approval, financing, facilitation, or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by this section if performed by a United States person or within the United States.
What part of Ukraine is subject to sanctions?
The Crimea region of Ukraine is subject to comprehensive, “country” based sanctions. This is true even though Crimea is not a country. The region is being targeted for sanctions that are similar in scope and construction to those targeting Iran, Sudan, Syria, and North Korea.
Executive Order 13685 defines “Crimea region of Ukraine” as the land territory in that region as well as any maritime area over which sovereignty, sovereign rights, or jurisdiction is claimed based on purported sovereignty over that land territory.” In essence, the entire peninsula and its associated maritime areas are subject to the prohibitions of the executive order.