United States: Biden administration imposes tough new sanctions on Russia in response to cyber attacks and election interference
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On April 15, 2021, President Biden issued an executive order (found here), “Freezing of Assets in Respect of Specified Harmful Foreign Activities of the Government of the Russian Federation.” This decree implements new sanctions against Russia in response to Russia’s cyberattacks, its involvement in foreign bribery, interference in the 2020 US presidential election, the pursuit of extraterritorial activities against journalists and dissidents and other undemocratic violations of international legal principles. According to the White House, the purpose of these sanctions is to impose economically significant costs on Russia because of its destabilizing international actions (press release available here). Importantly, the decree authorizes the imposition of sanctions on a wide range of people, including those operating in the technology and defense and related materiel sectors in Russia.
Sovereign Debt Bans – Guideline 1
Under the decree, the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury issued Guideline 1 on April 15, which prohibits US financial institutions from trading in ruble-denominated or unissued bonds after the June 14, 2021 by the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation or the Ministry of Finance of the Russian Federation. Directive 1 also prohibits US financial institutions from lending to these three entities. This directive significantly extends the bans on certain transactions in Russian sovereign debt that have been in place since August 2019 and reserves the right to further extend the sanctions in the future, if necessary.
Designations of technology companies
In addition, OFAC has nominated the following six Russian technology companies for their role in facilitating malicious cyber activity and for supporting the Russian intelligence services computer program:
- ERA Technopolis;
- Pasit, AO (Pasit);
- Autonomous scientific establishment of the Federal State Institute for Scientific Research Specialized safety computing devices and automation (SVA);
- Neobit, OOO (Neobit);
- Advanced system technology, AO (AST); and
- Pozitiv Teknolodzhiz, AO (positive technologies).
These designations were imposed on the same day that the Biden administration officially named the Russian Foreign Intelligence Service as the perpetrator of the cyber-espionage attack on the Solar-Winds Orion platform and other IT infrastructure, which compromised national security and disrupted more than 16,000 computer systems. worldwide.
Designations of malicious cyber actors
OFAC also named 16 entities and 16 individuals (collectively, “persons”) for carrying out Russian-led interference attempts in the 2020 US presidential election, as well as Russian proxy interference. in several African countries. These appointments were a response to Russia’s coordination of government officials, businesses, disinformation bodies and intelligence agencies to covertly influence voters, propagate conspiracy theories, spread Russia’s favorite messages, and undermine trust. in the electoral process.
Designations related to Crimea
The Treasury, in partnership with the European Union, the United Kingdom, Australia and Canada, also sanctioned eight entities and individuals in response to the Russian action underway in the Crimean region in Ukraine. The Treasury has appointed certain persons to assert government authority over Crimea, and persons and entities designated to operate in Crimea in violation of Ukrainian sovereignty.
As a result of these new designations, all property and interest in the property of such persons (and any entity 50% or more owned by such persons) that is in the United States or that is in the possession or control of American people should be blocked and reported. at OFAC. Any foreign person who knowingly engages in transactions with the named persons or entities is also at risk of being named.
In addition to these sanctions and designations, the United States expelled 10 people from the Russian diplomatic mission in Washington, DC, including members of the Russian intelligence services. The deportations were another response to Russian interference in the 2020 US election and cyberattacks.
In response, on Friday April 16, Russia responded by expelling 10 U.S. diplomats from Russia, imposing visa bans on six acting and two former U.S. officials, and announcing that all nonprofit foundations sponsored by the US government were to cease operations in Russia.
A Kremlin spokesman said Russia considers US sanctions illegal and, in case the US continues to pursue a policy of confrontation, it will react accordingly.
In addition, the Biden administration has indicated that it will expand these sanctions if Russia continues its nefarious foreign activities.
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