US and Europe Increase Sanctions on Russia, Target Sberbank, Alfa Bank and ‘New Investments’ | The Volkov Legal Group

On April 6, 2022, the United States and Europe announced new sanctions against Russian banks – Sberbank, Russia’s largest bank, and Alfa Bank, another major financial institution. The new executive order imposes comprehensive blocking restrictions on both banks.

Sanctions were also imposed against other Russian government officials, security officials. oligarchs and their family members. The new sanctions named the two daughters of Russian President Putin.

Significantly, the expanded sanctions also include a total blocking of “new investment” in Russia by American persons. The Executive Order does not define the term “new investments”.

Sberbank controls a third of all banking assets in Russia. Alfa Bank is the largest private bank in Russia and the fourth largest bank in Russia.

As a possible indication of future sanctions, the new executive order authorizes expanded authority to impose sanctions against “any class of service,” as determined by the US Treasury Department. The intention behind the ban on new investments is to restrict the Russian private sector.

OFAC’s Specially Designated Nationals list has grown to 18 individuals, 50 entities and five vessels. OFAC also issued new general licenses 8B, 9B, 10B, 21, 22 and 23. These licenses authorize interactions with Russian banks for energy transactions until June 24, 2022, as well as financial transactions with Sberbank.

The new sanctions extend Sberbank’s ban on processing dollar transactions for US persons to “any transaction in any currency with” any US person.

The new sanctions against Sberbank include its 42 subsidiaries, and Alf Bank and its six subsidiaries. The ban on Alfa Bank extends to five vessels belonging to Alfa Bank.

Besides naming President Putin’s two daughters, the new decree includes the wife and daughter of Russian Foreign Minister Sergei Lavrov.

The new sanctions also include members of the Russian Security Council, which is responsible for Russia’s foreign policy, including its war against Ukraine. These members include: Minister of Defense Sergey Shoigu, Chief of Staff of the Russian Armed Forces Valery Gerasimov, Director of the Federal Security Service (FSB) Alexander Bortnikov, Special Representative of the President for the Protection of environment, ecology and transport Sergei Ivanov, Federation Council Secretary Nikolai Patrushev, National Guard Commander-in-Chief Viktor Zolotov and State Duma Deputy Vyacheslav Volodin.

Many of these individuals have also been sanctioned by other countries, including Canada, the European Union (EU), Japan, New Zealand, Australia and the United Kingdom (UK).

Mary I. Bruner