The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of State issued new Russia sanctions on January 10th and 15th, 2025.
- On the 10th, OFAC and the State Department aggressively targeted the Russian energy sector by designating major Russian oil companies liquefied natural gas (LNG) facilities, and senior officials of State Atomic Energy Corporation, Rosatom, as well as insurers, traders, and dozens of vessels involved in shipping Russian oil.
- On the 15th, OFAC designated Keremet Bank, a Kyrgyz Republic-based financial institution, along with other entities involved in a sanctions evasion scheme to facilitate cross border payments for sensitive goods. Keremet Bank’s designation is the first use of authorities established by Executive Order (E.O.) 14114 (amending E.O. 14024) targeting non-US financial institutions for facilitating transactions involving Russia’s military-industrial base. OFAC also re-designated almost 100 already sanctioned entities pursuant to E.O. 13662. The State Department designated more than 150 individuals and entities involved in providing items critical to Russia’s military industrial base, including a number of PRC-based entities.
January 10 Action
In the January 10 action, OFAC and the State Department targeted entities involved in currently active Russian energy production and exports. Previously, the U.S. government limited sanctions on Russia’s energy sector to measures that sought to reduce revenues while maintaining Russia’s exports of oil, petroleum products, and gas, including (a) prohibiting imports to the United States, (b) imposing a price cap on seaborn shipments of Russian crude oil and petroleum products, and (c) targeting Russia’s development of future energy production and export capacity.
The January 10 action changes that approach: OFAC designated Gazprom Neft (Gazprom’s oil-producing operation) and Surgutneftegaz, two of Russia’s top four oil producers, as well as dozens of their subsidiaries. The State Department designated operators of the Vostok oil project, the Portovaya LNG terminal, and the Vysotsk LNG terminal.
The U.S. also heavily targeted Russia’s transport of oil by (a) designating 183 vessels, primarily oil tankers linked to transporting Russian oil, (b) redesignating Sovcomflot itself and revoking General License 93, which previously had suspended application of the 50% rule to Sovcomflot, (c) designating two of Russia’s largest insurers, Ingosstrakh Insurance Company and Alfastrakhovanie Group, and (d) designating multiple oil traders with ties to Russia (including non-Russian parties).
Among other things, OFAC also:
- Issued a determination pursuant to E.O. 14024 that authorizes the imposition of sanctions on any person determined to operate or have operated in the energy sector of the Russian Federation economy, which expands OFAC’s targeting authority for future designations. In FAQ 1213, OFAC defines “energy sector” very broadly.
- Issued a determination prohibiting, as of February 27, 2025, U.S. persons from providing “petroleum services” to “any person in the Russian Federation.” OFAC defines petroleum services defined in FAQ 1216.
January 15 Action
In the January 15 action, OFAC re-designated almost 100 previously sanctioned entities pursuant to E.O. 13662. Under E.O. 13662, foreign persons, including foreign financial institutions, that knowingly facilitate significant transactions for or on behalf of any of these entities could be subject to mandatory secondary sanctions.
OFAC also designated Keremet Bank, a Kyrgyz Republic-based financial institution, along with other entities involved in a sanctions evasion scheme to facilitate cross border payments for sensitive goods. Keremet Bank’s designation is the first use of authorities established by Executive Order (E.O.) 14114 (amending E.O. 14024) targeting non-US financial institutions for facilitating transactions involving Russia’s military-industrial base.
Can President Trump Unwind These Sanctions?
Many of the sanctions OFAC issued on January 10th and 15th were made pursuant to Executive Order 14024 (the Russian Harmful Foreign Activities Sanctions Regulations) and Executive Order 13662 (the Ukraine-/Russia-Related Sanctions Regulations).
Sanctions imposed pursuant to Executive Order 13662 are explicitly subject to a 2017 statute (the Countering America’s Adversaries Through Sanctions Act, or CAATSA) that requires the President to notify Congress of any planned significant lifting or modification of those sanctions, stipulates a mandatory Congressional review period, and allows Congress to prohibit the President from taking such steps by passing a joint resolution of disapproval.
As a result, although President Trump will have broad flexibility to modify most of the post-2022 Russia sanctions, the designations under Executive Order 13662 will be more complicated to modify or lift.
To keep general authorizations consistent across E.O. 14024 and E.O. 13662 designations, OFAC issued General License 26 (pursuant to the Ukraine-/Russia-Related Sanctions Regulations), which it updated on January 15 to General License 26A. General License 26A authorizes under E.O. 13662 transactions that are authorized under E.O. 14024 and its implementing regulations.