U.S. Sanctions on Russia Related to the Ukraine Conflict

U.S. Sanctions on Russia Related to the Ukraine Conflict

Updated February 26, 2018
U.S. Sanctions on Russia Related to the Ukraine Conflict
Background
constitute a threat to U.S. national security. The United
Since 2014, the United States has imposed sanctions on
States, in coordination with the European Union and others,
over 600 individuals, entities, and vessels in response to
promised to impose increasing costs on Russia until it
Russia’s invasion and annexation of Ukraine’s Crimea
“abides by its international obligations and returns its
region and Russia’s subsequent support of separatists in
military forces to their original bases and respects Ukraine’s
eastern Ukraine. President Barack Obama, in initiating
sovereignty and territorial integrity.” The Department of the
economic sanctions on Russia, declared that Russia’s
Treasury’s Office of Foreign Assets Control (OFAC)
activities in Ukraine threaten the peace, security, stability,
continues to investigate transactions and designate
sovereignty, and territorial integrity of its neighbor and
individuals and entities, most recently in January 2018.
Table 1. U.S. Ukraine-Related Sanctions on Russia: Authorities, Targeted Behavior, and Treasury Designees
Authority
Targeted Behavior
Designations (as of 2/2018)
EO 13660 (3/6/2014);
Those responsible for undermining Ukraine’s democracy; threatening
114 individuals, 24 entities
Countering Russian
peace, security, stability, sovereignty, or territorial integrity;

Influence in Europe and
misappropriating funds.
Eurasia Act of 2017 (P.L.
115-44, Countering
America’s Adversaries
Through Sanctions Act
[CAATSA], Title II; 22
U.S.C. 9501 et seq.)
EO 13661 (3/17/2014); P.L.
Anyone designated, including Russian government officials; those
64 individuals, 56 entities
115-44
engaged in Russia’s arms sector; entities owned or controlled by a

senior Russian government official; those materially assisting or
supporting a senior Russian government official.
EO 13662 (3/20/2014); P.L.
Entities operating in sectors of the Russian economy, such as financial
290 entities
115-44
services, energy, metals and mining, engineering, and defense and

related matériel. Directives 1-4 specify financial services, energy
(including certain kinds of oil projects), and defense.
EO 13685 (12/19/2014); P.L.
Activities in the Crimea region, including new investment, trade, and
4 individuals, 58 entities, 2
115-44
related economic activities.
vessels
Support for the Sovereignty,
Those responsible for violence; human rights abuses in Ukraine or in
No designations to date;
Integrity, Democracy, and
any territory forcibly occupied or controlled by the Russian
authorities and categories of
Economic Stability of
government; the undermining of Ukraine’s security and sovereignty.
targets partially overlap with
Ukraine Act of 2014 (P.L.
Russian government officials (or associates) responsible for acts of
executive orders and related
113-95, as amended; 22
significant corruption.
designations.
U.S.C. 8901 et seq.)
Foreign persons who evade sanctions or facilitate significant
transactions for persons subject to sanctions.
Ukraine Freedom Support
State-run arms exporter Rosoboronexport; Russian entities that
No designations to date.
Act of 2014 (P.L. 113-272, as transfer weapons to Syria, Ukraine, Georgia, or Moldova (or other
Rosoboronexport is designated
amended; 22 U.S.C. 8921 et
states, depending on President’s designations); and persons who
under EO 13662.
seq.)
facilitate such transfers.
Foreign persons (and financial institutions) that make significant
investments in (or transactions for) certain kinds of oil projects.
Foreign financial institutions that engage in significant transactions for
persons subject to Ukraine-related sanctions.
Source: Congressional Research Service (CRS).
https://crsreports.congress.gov

link to page 1 link to page 2 U.S. Sanctions on Russia Related to the Ukraine Conflict
Executive and Congressional Actions
Effectiveness and Impact of Sanctions
A series of executive orders (EOs) issued in 2014 and
More than three years since Ukraine-related sanctions were
codified in the Countering America’s Adversaries Through
first imposed, observers note that Russia has not reversed
Sanctions Act (CAATSA; P.L. 115-44) form the basis for
its occupation and annexation of Crimea, nor has it dropped
designating Russian individuals and entities subject to
its support for the Donbas separatists. Since sanctions were
Ukraine-related sanctions. Also in 2014, Congress adopted
introduced, however, Russia has signed two agreements
two laws, amended by CAATSA, to strengthen and expand
that recognize all of the Donbas as a part of Ukraine and
sanctions (see Table 1). In issuing the EOs, President
Russian-backed rebel military operations have been limited
Obama identified individuals and entities subject to
to areas along the perimeter of the current conflict zone.
economic restrictions for having undermined the stability of
In terms of the economic impact of sanctions, it is difficult
Ukraine; misappropriated its state assets; annexed Crimea
to disentangle their effect from the simultaneous drop in oil
to Russia; used illicit armed force in Ukraine; and
prices. Oil is a major export and source of revenue for the
conducted business, trade, or investment in Crimea (see
Russian government, and the twin shocks of sanctions and
Table 2). Any individual or entity designated pursuant to
collapse in oil prices in 2014 hit the Russian economy hard.
these orders is subject to the blocking of assets under U.S.
Between 2014 and 2016, Russia experienced capital flight,
jurisdiction, prohibitions against U.S. persons engaging in
currency depreciation, inflation, and budgetary pressures.
transactions, and (for individuals) denial of entry into the
Growth slowed to 0.7% in 2014 before contracting by 2.8%
United States. Under EO 13662, Treasury also restricts
in 2015 and by another 0.2% in 2016. The International
transactions by persons under U.S. jurisdiction related to
Monetary Fund (IMF) estimated in 2015 that sanctions and
investment and financing for designated state-controlled
Russia’s retaliatory ban on agricultural imports reduced
companies in Russia’s financial sector, financing for
output in Russia over the short term by up to 1.5%.
designated companies in Russia’s energy and defense
sectors, and transactions related to the development of
Even though sanctions have been tightened, economic
Russian deepwater, Arctic offshore, and shale oil projects.
growth in Russia is strengthening, in part due to higher oil
prices. Russia’s economy grew by 1.8% in 2017 and is
Table 2. Targeted Individuals/Entities (as of 2/2018)
projected to grow by 1.7% in 2018. However, the economic
effects of restrictions on U.S. long-term financing for
EO 13660: Former Ukrainian officials; individuals in Crimea and
certain sectors and technology for specific oil exploration
the Donbas secessionist entities; Russian supporters; associated
projects may manifest more prominently over the longer
companies or organizations.
term.
EO 13661: Russian officials, deputies, businesspeople, and
The Future of Ukraine-Related Sanctions
associates who support Russia’s actions in Ukraine, are
considered part of Putin’s “inner circle,” and/or support senior
Before the passage of CAATSA, the Trump Administration
officials or sanctioned entities; Bank Rossiya, described by
stated on several occasions that Ukraine-related sanctions
Treasury as the “personal bank” of Russian senior officials;
would remain in place “until Moscow reverses the actions
Almaz-Antey, a state-owned defense company; other defense
that triggered” them. It also has made additional
firms (mostly subsidiaries of Almaz-Antey or the state-controlled
designations under the existing executive orders. CAATSA
defense and hi-tech conglomerate Rostec); and associated
has established a mechanism for Congress to review any
companies or organizations.
action the President takes to ease or lift a variety of
sanctions. Certain sanctions may be waived only if the
EO 13662: Sectoral sanctions on several major companies and
President certifies that the Russian government “is taking
subsidiaries: lending and investment restrictions on four large
steps to implement the Minsk Agreement to address the
state-controlled banks and VEB, which “acts as a development
ongoing conflict in eastern Ukraine.”
bank and payment agent for the Russian government”; lending
Although the President signed CAATSA, the Trump
restrictions on state-controlled defense and hi-tech
Administration has yet to exercise its authorities to impose
conglomerate Rostec, oil companies Rosneft and Gazpromneft,
additional sanctions related to Ukraine or other issues.
pipeline company Transneft, and private gas producer Novatek;
Many in Congress are watching this closely.
restrictions on transactions related to deepwater, Arctic
offshore, or shale oil projects.
The United States also imposes sanctions on Russian
individuals and entities for activities unrelated to events in
EO 13685: Mostly Russian or Crimea-based companies and
Ukraine.
subsidiaries operating in Crimea.
For more, see CRS In Focus IF10779, Overview of U.S.
Source: CRS.
Sanctions Regimes on Russia Also see CRS In Focus
CAATSA directed the Secretary of the Treasury to further
IF10614, EU Sanctions on Russia Related to the Ukraine
restrict financing for Russia’s financial and energy sectors
Conflict; CRS Report R43895, U.S. Sanctions and Russia’s
and to extend prohibitions related to the above oil projects
Economy; and CRS Report R44775, Russia: Background
to projects worldwide that involve any designated persons
and U.S. Policy.
who have an ownership interest of not less than 33%.

The Departments of State and Commerce also deny export

licenses for military, dual-use, and energy-related goods for

designated end users (most of which also are subject to

Treasury-administered sanctions).
https://crsreports.congress.gov

U.S. Sanctions on Russia Related to the Ukraine Conflict

Cory Welt, Analyst in European Affairs

Rebecca M. Nelson, Specialist in International Trade and

Finance

Dianne E. Rennack, Specialist in Foreign Policy

Legislation

IF10552

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