Treasury Ratchets up Russian Sanctions

OFAC continues its efforts to target Russian elites and firms that benefit from their ties to Russia’s defense sector, military-industrial complex, and affiliation with the Kremlin.  

September 13 OFAC imposed nearly 100 sanctions on Russian elites and Russia’s industrial base, financial institutions, and technology suppliers, along with designations of more than 70 persons.

Industries affected range from Railroad Equipment and heavy machinery to digital optical systems, diamonds traders, and the Wagner Group's advisor to the president of the Central African Republic.

Leading the announcement was designation of the chief of Transmashholding JSC, Russia's leading rolling stock and railway equipment manufacturer. Andrei Removich Bokarev and his wife have "worked with assorted Trust and Corporate Service Providers to create shell companies, behavior that can be associated with money laundering," according to OFAC. 

OFAC also designated the founder and owners of U.S.-designated Joint Stock Company Ural Mining and Metallurgical Company (UMMC).

Companies designated, along with executives include:

Open Joint Stock Company Aero Engine Scientific and Technical Complex Soyuz (Soyuz) is a Russia-based business involved in Russia’s military aerospace industry, including building engines for cruise missiles and military transport aircraft.

Open Joint Stock Company Balashikhinskiy Liteyno Mekhanicheskiy Zavod (Balashikha) is a Russia-based company involved in the manufacture, development, production, testing, and repair of aviation equipment. Russia's Ministry of Defense is a main consumer of Balashikha's products.

Included in the action was the former CEO of U.S.-designated Joint Stock Company Concern Kalashnikov, was previously designated pursuant to E.O. 13661 for being an official of the Government of the Russian Federation and pursuant to E.O. 14024 for operating or having operated in the defense and related materiel sector of the Russian Federation economy.

OFAC also designated additional Russia-based entities that directly contribute to Russia’s war against Ukraine by virtue of their production of military materiel:

Joint Stock Company Gavrilov Yam Machine Building Plant Agat (Agat) manufactures aircraft engines, including engines for unmanned aerial vehicles (UAVs).

Joint Stock Company Star (JSC Star), which is part of U.S.-designated, Russian state-owned defense conglomerate State Corporation Rostec (Rostec), develops and manufactures aircraft engines. Rostec was designated pursuant to E.O. 14024 and is subject to Directive 3 under E.O. 13662.

Joint Stock Company Mechanical Engineering Research Institute (NIMI) is a producer of weapons and ammunition for government weapons programs.

Aktsionernoe Obshchestvo Ulyanovskii Patronnyi Zavod (Ulyanovsk Cartridge Works) is an ammunition manufacturer.

AK Microtech-Related Persons

On July 20, 2023, OFAC designated Russia-based entity Limited Liability Company AK Microtech (AKM) pursuant to E.O. 14024 for operating or having operated in the electronics sector of the Russian Federation economy. AKM specializes in transferring foreign semiconductor technology to Russian microelectronics production companies, including entities that provide microelectronics to the Russian defense industry.

Today, OFAC designated AKM’s owner and director, Russian national Andrei Rostislavovich Khokhlun (Khokhlun), as well as two companies owned by Khokhlun: Russia-based Limited Liability Company Keko R (Keko R) and Slovenia-based Arktec Tehnologije na Podrocju Elektronike doo (Arktec).

Khokhlun was designated pursuant to E.O. 14024 for operating or having operated in the electronics sector of the Russian Federation economy. Keko R and Arktec were designated pursuant to E.O. 14024 for being owned or controlled by, or for having acted or purported to act for or on behalf of, directly or indirectly, Khokhlun.

Russian Electronics and Technology Companies

The following Russia-based entities were designated pursuant to E.O. 14024 for operating or having operated in the electronics sector of the Russian Federation economy:

• OOO Enkor Grupp is a manufacturer of diodes, transistors, and other semiconductor devices.
• Nauchno Proizvodstvennoe Predpiyatie Itelma is a leading Russian developer and manufacturer of electronic solutions for vehicles as well as a prolific importer of dual-use microchips.
• OOO Makro Grupp is a provider of electronic components to Russia’s aerospace and aviation sectors.
• Limited Liability Company Streloi is a wholesaler of electronic equipment and parts.
• Vertikal Limited (Vertikal) is a wholesaler of electronic equipment, computers, software, and measuring instruments. Ilya Andreevich Buzin (Buzin) is the General Director of Vertikal. Buzin was also designated pursuant E.O. 14024 for being or having been a leader, official, senior executive officer, or member of the board of directors of Vertikal.
• OOO VMK (VMK) is a supplier of electronic products, including circuit boards, wires, connectors, and microchips. VMK, one of the largest Russian importers of dual-use microchips, supplies electronics to U.S.-designated Joint Stock Company Concern Radio-Electronic Technologies, a subsidiary of Rostec that develops electronic warfare systems for the Russian military.

The following Russia-based entities were designated pursuant to E.O. 14024 for operating or having operated in the technology sector of the Russian Federation economy:

• OOO Aiti Tsentr is a wholesaler of electronics, computers, and software.
• Limited Liability Company Baltinfokom manufactures computer equipment, cloud storage processing systems, and specialized software.
• OOO Bitteriya supplies IT equipment and software.
• Eastern Trade Limited Liability Company manufactures computers, data storage device, and information security equipment.
• Joint Stock Company Echelon Union for Science and Development is a systems integrator in the field of information security and is licensed by the U.S.-designated Russian Federal Security Service (FSB) as well as the Federal Service on Technical and Export Control of Russia and the Russian Ministry of Defense.
• Limited Liability Company Inforion is a systems integrator that provides services and solutions in the areas of information security, import substitution, research and design of microelectronics, IT and management consulting, big data, and reverse engineering of software and hardware.
• Obshchestvos Ogranichennoi Otvetstvennostyu Inforser Inzhiniring is an information technology company that provides digital transformation services and that designs and constructs specialized facilities.
• Limited Liability Company Kvarta VK is an information technology systems integration company that provides custom computer programming services.
• OOO Lanprint is an IT company specializing in the wholesale of computers, office equipment, processors, servers, network equipment, and microelectronics.
• OOO Novyi Ai Ti Proekt is a manufacturer of computers, memory devices, and information security equipment.
• Aktsionernoe Obshchestvo Pluton is a research and production complex engaged in the development and production of modern electrovacuum devices, including with military applications.
• Federal State Unitary Enterprise Rostov on Don Research Institute of Radio Communications’s (RNIIRS) business includes security and IT systems and hardware and software solutions. RNIIRS is also involved in the production of military UAVs.
• Joint Stock Company Signaltek produces network security and satellite equipment.
• Silkway Limited Liability Company is wholesaler of computers, software, machinery, and IT equipment.
• OOO Solar Sekyuriti (Solar Security) provides threat analysis and intrusion prevention and builds and operates cybersecurity systems. Solar Security holds a license from the FSB for the development, production, and distribution of encryption services.
• Limited Liability Company Status Complains provides computer system design services.
• Svetlana Rost Joint Stock Company (Svetlana Rost) is a full-cycle semiconductor enterprise. Svetlana Rost has a Russia-based subsidiary, Obshchestvo S Ogranichennoi Otvetstvennostyu Rost Progress (Rost Progress). Rost Progress was designated pursuant to E.O. 14024 for being owned or controlled by, or for having acted or purported to act for or on behalf of, directly or indirectly, Svetlana Rost.
• Joint Stock Company Special Economic Zone Technopolis Moscow (Technopolis Moscow) manages a special economic zone that fosters the development of high-tech companies and specializes in micro- and nanoelectronics and robotics. Technopolis Moscow is home to an industrial park that will host companies producing UAVs.
• OOO Trialkom is a wholesaler of electronics, computers, and software.
• Limited Liability Company Tribit provides digital hardware design, consulting, and software development services.
• OOO Vneshekostil is one of the largest importers of dual-use chips into Russia.

Aktsionernoe Obshchestvo Taskom is a Russia-based company involved in freight transport by road and transportation services, and the storage of goods. Taskom was designated pursuant to E.O. 14024 for operating or having operated in the transportation sector of the Russian Federation economy.

TARGETING RUSSIA’S INDUSTRIAL BASE AND CONSTRUCTION SECTOR

On May 19, 2023, G7 Leaders committed to target those operating in Russia’s manufacturing and construction sectors. Today, OFAC underscores that commitment by sanctioning a number of leading Russian manufacturing and construction firms.

The following Russia-based entities were designated pursuant to E.O. 14024 for operating or having operated in the manufacturing sector of the Russian Federation economy:

• Joint Stock Company Avtovaz is an automotive manufacturer.
• Gaz Group is an automotive manufacturer. Gaz Group was previously designated pursuant to E.O. 13661 and E.O. 13662 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Oleg Vladimirovich Deripaska and Russian Machines, persons whose property and interests in property are blocked pursuant to E.O. 13661 and E.O. 13662. Gaz Group is also sanctioned by Japan.
• Joint Stock Company HMS Group manufactures industrial pumps and compressors.
• Kirovsky Zavod Public Joint Stock Company produces machinery and steel products for a variety of industries.
• Kriogenmash OAO (Kriogenmash) manufactures equipment for producing, processing, transporting, and storing industrial gases. Kriogenmash is also subject to Directive 1 under E.O. 13662.
• Joint Stock Company Moscow Automotive Factory Moskvich is an automotive manufacturer.
• JSC Power Machines (Power Machines) is a manufacturer of turbines and electrical equipment for power plants and industry. Power Machines was previously designated pursuant to E.O. 13685 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to OAO Technopromexport and Technopromexport LLC, persons whose property and interests in property are blocked pursuant to E.O. 13685. Power Machines is also sanctioned by Canada.
• Publichnoe Aktsionernoe Obschestvo Sollers is an automotive manufacturer.
• Limited Liability Company Machine Building Plant Tonar is an automotive manufacturer.
• Joint Stock Company United Metallurgical Company (OMK) is a manufacturer of steel pipes and other steel products. OMK is also sanctioned by the UK.
• Open Joint Stock Company Tikhoretsk Machine Construction Plant V.V. Vorovsky manufactures railway machinery.

The following Russia-based entities were designated pursuant to E.O. 14024 for operating or having operated in the construction sector of the Russian Federation economy:

• Aktsionernoe Obshchestvo Mosinzhproekt is a civil engineering and construction company active in construction projects located in Moscow.
• Russian Highways State Company is a construction and engineering company primarily involved in the construction of motorways and related infrastructure.
• Transstroimekhanizatsiya Limited Liability Company is a construction company involved in industrial and transportation construction projects.

FURTHER LIMITING RUSSIA’S REVENUE FROM EXTRACTIVES AND FUTURE EXTRACTIVES CAPABILITIES

Today’s action also cuts into Russia’s revenue streams from extractive industries, including targeting entities that will contribute to Russia’s future energy revenues.

Aktsionernoe Obshchestvo BashVzryvTekhnologii (BVT) is a Russia-based company that manufactures perforation systems and detonation equipment for oil and gas exploration. BVT was designated pursuant to E.O. 14024 for operating or having operated in the manufacturing sector of the Russian Federation economy.

Limited Liability Company Gazprom Nedra (Gazprom Nedra) is a Russia-based company that provides engineering services for oil and gas exploration. Gazprom Nedra was designated pursuant to E.O. 14024 for operating or having operated in the engineering sector of the Russian Federation economy.

Joint Stock Company Gazstroyprom (Gazstroyprom) and Velesstroi Limited Liability Company (Velesstroi) are Russia-based construction companies involved in energy-related construction projects. Gazstroyprom and Velesstroi were designated pursuant to E.O. 14024 for operating or having operated in the construction sector of the Russian Federation economy.

JSC AGD Diamonds (AGD Diamonds) is a Russia-based company involved in the prospecting, exploration, production, mining, and the processing of minerals. Grib Diamonds is AGD Diamonds’ Belgium-based subsidiary.

AGD Diamonds was designated pursuant to E.O. 14024 for operating in or having operated in the metals and mining sector of the Russian Federation economy. Grib Diamonds was designated pursuant to E.O. 14024 for being owned or controlled by, or for having acted or purported to act for or on behalf of, directly or indirectly, AGD Diamonds.

On June 27, 2023, six agencies of the U.S. government issued a business risk advisory related to the sub-Saharan African gold sector, which discussed, among other things, concerns related to Wagner’s exploitation and profiteering from gold in Mali and other countries.

Vitalij Victorovich Perfilev (Perfilev), a Russian national, is a Wagner Group official in CAR serving as the national security advisor to the CAR President.  Perfilev has been responsible for drafting communiques to the CAR armed forces senior leadership regarding rebel forces’ activities. The European Union also sanctioned Perfilev in June 2023.

OFAC designated Perfilev pursuant to E.O. 14024 for being owned or controlled by, or for having acted or purported to act for or on behalf of, directly or indirectly, the Wagner Group, a person whose property and interests in property are blocked under E.O.14024.

CURTAILING RUSSIA’S ACCESS TO THE INTERNATIONAL FINANCIAL SYSTEM

To continue restricting Russia’s ability to benefit from connections to the international financial system, OFAC is designating two more Russia-based banks as well as several Russia-based wealth management consulting, auditing, and investment firms.

Joint Stock Commercial Bank Ak Bars Public Joint Stock Company (Ak Bars Bank) is a commercial financial institution located in Kazan, Russia.

Obshchestvo s Ogranichennoi Otvetstvennostyu Kommercheski Bank Sinko Bank (Sinko Bank) is a regional bank located in Moscow, Russia.  

Ak Bars Bank and Sinko Bank were designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.

Katarzyna Ewa Pawlowska Hanafin (Pawlowska), a Polish national, is the chief operating officer of Huriya Private FZE LLE (Huriya) and the wife of U.S.-designated John Desmond Hanafin (Hanafin), the chief executive officer of Huriya. Huriya and Hanafin were designated on May 19, 2023 pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russinn Federation economy. Hanafin was also designated pursuant to E.O. 14024 for being or having been a leader, official, senior executive officer, or member of the board of directors of Huriya. Huriya is a private equity and corporate structuring entity heavily involved in moving Russian finance into and through the UAE financial sector, and money laundering. Since Russia’s full-scale invasion of Ukraine in 2022, Huriya began working quickly to move Russian assets into structures protecting them from sanctions. Huriya also helped high-net-worth Russian nationals procure non-Russian passports under assumed names to avoid financial scrutiny and sanctions.

Pawlowska was designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy; for being or having been a leader, official, senior executive officer, or member of the board of directors of Huriya, a person whose property and interests in property are blocked pursuant to E.O. 14024; and for being a spouse or adult child of Hanafin. 

Obshchestvo S Ogranichennoi Otvetstvennostyu A1 (A1) is a Russia-based investment company involved in asset management, debt collection, and bankruptcy services, and Obshchestvo S Ogranichennoi Otvetstvennostyu Investitsionnaya Kompaniya A1 (Investment Company A1) is a Russia-based investment company involved in asset management and credit provisioning. A1 and Investment Company A1 are investment businesses of Alfa Group, a Russia-based entity connected to U.S.-designated individuals Petr Olegovich Aven, Mikhail Maratovich Fridman, German Borisovich Khan, and Alexey Viktorovich Kuzmichev.  

A1 and Investment Company A1 were designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.

KSK Group (KSK) is a Russia-based business consulting company that provides clients a variety of financial services. OOO KSK Audit is a Russia-based company offering consulting services for financial audits, accounting, taxes, and commercial management. Russian national Aleksey Sergeyevich Chubarov (Chubarov) is the Head of International Structuring at KSK.

KSK and Chubarov were designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy. OOO KSK Audit was designated pursuant to E.O. 14024 for operating or having operated in the accounting sector of the Russian Federation economy.