Russia cranked up its gold production to offset previous international sanctions; now, the U.S. and a group of international allies are cutting off that particular revenue stream in an effort to hamstring Russia’s continued invasion of Ukraine.
The U.S. Treasury Department has issued additional sanctions against Russia, targeting almost 100 entities and individuals, and prohibited import of Russian gold. The latest U.S. action reflects commitments recently reached among the G-7 alliance to prohibit gold imports and target Russia’s industrial base, military and intelligence units and sanctions evaders. To follow up on these commitments, FinCEN and the U.S. Department of Commerce announced their intent to aggressively prosecute any individuals involved in sanctions evasion.
OFAC designated 70 entities, many of which are important to Russia’s defense industry, including Rostec, a key state-owned company in Russia’s defense sector, along with 29 individuals. This latest action is designed to focus sanctions against Russia’s capabilities to develop and deploy weapons and technology used to support Russia’s ongoing war effort.
The U.S. State Department imposed its own sanctions against 45 entities and 29 individuals, including Russian military units and Russia’s Federal Security Service (FSB). The State Department also extended sanctions against 500 Russian military officers.
Further, OFAC prohibited the importation of Russian gold into the United States, and FinCEN issued a joint alert with the Commerce Department’s Bureau of Industry and Security (BIS) warning parties involved in sanctions evasions. The gold ban applies to gold of Russian origin, excluding Russian-origin gold located outside of Russia before the prohibition’s effective date.
The U.S. action was joined by the United Kingdom, Canada and Japan. OFAC warned U.S. parties to avoid any transactions involving Russian gold as a means to evade other applicable sanctions.
OFAC’s sanctions against Rostec are comprehensive. Rostec is the foundation of Russia’s defense industry and covers Russia’s technology, aerospace and military-industrial expertise. Its subsidiaries are involved in the automotive, defense, aviation and metals sectors. In addition,
The company facilitates international trade in defense and related material, as well as dual-use items. Rostec includes about 800 entities involved in a variety of sectors. Rostec is also sanctioned by Australia, Canada, the EU, New Zealand, Switzerland and the United Kingdom.
As part of this significant action, OFAC’s new prohibition extends to Rostec’s subsidiaries, including but not limited to entities in the aerospace sector, defense technology sector, industrial export sectors and management entities.
OFAC also designated three individuals and one entity (in Hong Kong) involved in evasion activities on behalf of a covert procurement network linked to Russia’s FSB.
As part of its effort to disrupt Russia’s control of the Donbas region, OFAC designated a number of government officials involved in the DNR and LNR regions.
To target Russia’s “enablers,” OFAC designated the Advanced Research Foundation and Andrey Ivanovich Grigoryev as part of its crackdown against Russia’s technology and defense sectors.
FinCEN and BIS issued an alert of possible evasion activities urging financial institutions to remain vigilant for possible attempts to evade BIS export controls against Russia.
This post originally appeared on Mike Volkov’s Corruption, Crime & Compliance blog. It is republished here with permission.
Michael Volkov is the CEO of The Volkov Law Group LLC, where he provides compliance, internal investigation and white collar defense services. He can be reached at 
