US Sectoral Sanctions

CAATSA / Guidances / Lists (cont'd) Some further CAATSA interpretative / application points Important issue: whether all / any of these tightened and new anti-Russia secondary sanctions may be imposed against Russian as well as other non-US companies/ individuals by the technical CAATSA wording, yes - though such imposition against "target-country" persons isn't traditional in US sanctions practice and the fact of only CAATSA section 226 (amending UFSA section 5) being expressly aimed at "Russian and other foreign financial institutions" (emphasis added) might be taken as another sign that otherwise Russian entities/individuals are not intended to be caught - i.e., that they are and can continue to be more easily targeted by existing/future primary sanctions as SDNS or SSIS but in fact in 2018 a number of Russian companies and individuals have been SDN-designated for cyber-related activities under CAATSA section 224 (and we suppose that some Russian companies/ individuals already put on the section 231 LSP List, or others, might be vulnerable to same); and there can be no guarantee that this trend may not spread to targeting Russian companies/ individuals under other CAATSA sections too - but no such new enforcement actions yet In any event, here again, the mere possibility / threat of such application against otherwise non- sanctioned or at least non-SDN Russian companies / banks now makes some of them pause before doing possible sanctions-targeted business with sanctioned or possibly sanctioned Russian companies (especially with SDNs) under any of the CAATSA provisions And non-Russian companies / banks certainly have become more cautious about doing any such business with Russian cos. (whether sanction targets or not) in general... all the more so with the April 2018 SDN designations (core-economy oligarchs / their companies) and some newer US actions Morgan Lewis 59

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