US Sectoral Sanctions

CBW Act Sanctions (cont'd) Second round - August 2019 Trump Administration in fact imposed the required three of six menu-items - and with various narrowing interpretations, exceptions and waivers by Executive Order ("EO") 13883 of 1 August 2019, and follow-on clarifying State and OFAC releases these sanctions (taken together with the waivers also simultaneously granted) seem to have quite narrow/limited "bite" as a practical matter State Dep't Release of 2 August 2019 announced the three selected new sanctions: 1) 2) ܀ US opposition to any loan or financial assistance to Russia by int'l financial institutions (IFIs) but there has been very little if any such loan / assistance activity to Russia in recent years in any event and the US, while having weighty vote, doesn't have formal veto power over these (World Bank, IMF) prohibition on US banks' (i) participating in the primary market for non-ruble denominated Russian sovereign debt, and (ii) lending non-ruble denominated funds to the Russian government thus, US banks are still free to purchase Russian sovereign debt on the secondary market - and the ban on lending to the Russian "government" is narrowly defined as being only to the "Russian sovereign" so that lending to Russian gov't-owned companies is untouched by this new sanction (but OFAC Directives 1 and 2 still restrict lending to the designated state-owned banks and energy companies - see slides 19-20 above) 3) additional export licensing restrictions on Dep't of Commerce controlled goods / technology stated to apply only to items controlled for chemical and biological weapons proliferation reasons and the same waivers (license exceptions) that applied to first-round CBW Act sanctions (slide 65) continued to apply here on case-by-case basis (and with same presumption of denial for state-owned / -funded entities) But such availability of waivers now tightened by most recent Commerce/BIS rules (see slides 12 and 30) Morgan Lewis 67 2

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