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We hereby inform you that the recent activities of the Russian Federation on the territory of Ukraine have led to immediate replications by the United States of America and the European Union on the matter of the economic and financial sanctions.

President Biden's Executive Order

On February 21st, 2022, the President of the United States signed an executive order following President Putin's recognition of the Donetsk People's Republic (DNR) and the Lugansk People's Republic (LNR), contrary to Russia's commitments in the Minsk agreements.

The aforementioned Executive Order, admittedly extended to non-U.S. entities as well, prohibits the conduct of several activities in the territories of DNR and LNR, in particular, on investment, financing, export and import of goods.

The Office of Foreign Assets Control (OFAC) measures.

OFAC imposed economic and financial sanctions in concert with allies and partners to undermine the core infrastructure of Russia's financial system and exclude it from the global financial system.

OFAC placed Vnesheconombank (VEB.RF) and Promsvyazbank on the SDN list, thereby resulting in the freezing of those entities' assets, funds and economic resources in the United States.

OFAC also issued three directives under E.O. 14024 ("Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation"):

• Directive 1A, which restricted transactions involving the sovereign debt securities of the Russian Federation;
• Directive 2, which prohibited the opening and maintenance of a correspondent or pass-through account for or on behalf of foreign financial institutions subject to the Directive's prohibitions, as well as the processing of transactions involving certain foreign financial institutions subject to the Directive prohibitions;
• Directive 3, concerning prohibitions on new debt and equity of certain entities related to Russia.

The U.S. Department of Commerce & Bureau of Industry and Security (BIS) Order.

BIS issued a so-called "final rule" called "Implementation of Sanctions Against Russia Under the Export Administration Regulations (EAR)," designed to implement new licensing requirements for Russia and licensing policies to protect U.S. national security as well as the foreign policy interests.

Sanctions implemented by the European Union

On February 23rd, 2022, the Council of the European Union agreed on sanctions in response to the events that have taken place in recent days on Ukrainian territory, and in particular, we highlight the implementation of certain restrictions on economic relations with the non-government-controlled areas of Donetsk and Lugansk regions.

In addition, on February 24th, the EU leaders met in an extraordinary summit convened as a result of the events of the past few hours, agreeing on additional sanctions against Russia covering strategic sectors of the country such as the financial, energy and transportation sectors, dual-use goods, export control and financing, and visa policy.

Hence, we suggest that anyone who has financial and business relations with these territories should check the location of their counterparts (e.g. customers and suppliers), as well as pay attention to their ownership and control structures to avoid to be subjected to sanctions.