On February 21, 2022, President Biden signed an Executive Order (“E.O.”), in response to the Russian Federation’s recognition of the so-called Donetsk People’s Republic (“DNR”) and Luhansk People’s Republic (“LNR”) regions of Ukraine as “independent” states. The White House reported that this E.O. is distinct from the severe economic measures the U.S. Government is prepared to issue in response to a further Russian invasion of Ukraine.

While limited in its coverage to persons and activity involving the DNR and LNR regions of Ukraine, it contains a number of prohibitions that U.S. persons (including citizens, green-card holders, and companies) should be attentive to.

This new E.O. prohibits the following:

• New investment in the DNR or LNR regions of Ukraine by a U.S. person, wherever located;
  
  
• The importation into the United States, directly or indirectly, of any goods, services, or technology from the DNR or LNR regions of Ukraine;
  
  
• The exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a U.S. person, wherever located, of any goods, services, or technology to the DNR or LNR regions of Ukraine; and
  
  
• Any approval, financing, facilitation, or guarantee by a U.S. person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be covered by these prohibitions if performed by a U.S. person or within the United States.

The E.O. also blocks all property and interests in property that are in the United States or within the possession or control of any U.S. person (including any foreign branch) of any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:

• To operate or have operated since the date of the E.O. in the DNR or LNR regions of Ukraine;
  
  
• To be or have been since the date of the E.O. a leader, official, senior executive officer, or member of the board of directors of an entity operating in the DNR or LNR regions of Ukraine;
  
  
• To be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this E.O.; or
  
  
• To have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to this E.O.

In connection with this E.O., the Office of Foreign Assets Control (“OFAC”) has issued a number of General Licenses authorizing the following activities:

• Transactions for the wind down of transactions involving the DNR or LNR regions of Ukraine, until March 23, 2022 [does not authorize transactions with blocked persons];
  
  
• Transactions for:
  

  (1) the exportation or reexportation of agricultural commodities, medicine, medical devices, replacement parts and components for medical devices, or software updates for medical devices to the DNR or LNR regions of Ukraine; or
  
  (2) the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies relating to COVID-19) in the DNR or LNR regions of Ukraine;
  
  

• Transactions for the receipt or transmission of telecommunications (but this does not authorize: (i) the provision, sale, or lease of telecommunications equipment or technology; or (ii) the provision, sale, or lease of capacity on telecommunications transmission facilities (such as satellite or terrestrial network activity)) [does not authorize transactions with blocked persons];
  
  
• Transactions for the receipt or transmission of mail and packages [does not authorize transactions with blocked persons];
  
  
• Transactions for the official business of the following entities: (a) the United Nations; (b) the International Centre for Settlement of Investment Disputes (ICSID) and the Multilateral Investment Guarantee Agency (MIGA); (c) the African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank Group (IDB Group); (d) the International Committee of the Red Cross and the International Federation of Red Cross and Red Crescent Societies; and (e) the Organization for Security and Co-operation in Europe;
  
  
• Transactions for the transfer of noncommercial, personal remittances to the DNR or LNR regions of Ukraine [does not authorize transactions with blocked persons];
  
  
• Transactions for maintaining, operating, or closing an account of an individual ordinarily resident in the DNR or LNR regions of Ukraine [does not authorize transactions with blocked persons]; and
  
  
• Transactions for the exportation or reexportation, directly or indirectly, from the United States or by U.S. persons, wherever located, to persons in the DNR or LNR regions of Ukraine, of services incident to the exchange of personal communications over the internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, and blogging [does not authorize transactions with blocked persons].

Developments in this area are fluid and additional sanctions measures may be imposed by the U.S. Government in response to further actions taken by Russia in the DNR or LNR regions or other territory of Ukraine.

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