Markets Wired

New Designations Tighten Global Vise on Putin Associates and Resources

WASHINGTON –– Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed a new round of sanctions targeting Kremlin-connected elites, a major multinational company, and a sanctions evasion operation, as well as one yacht pursuant to Executive Order (E.O.) 14024. These elites and businesses operate in economic sectors that generate substantial revenue for the Russian regime, including from sources outside of Russia.

OFAC’s designations today were taken in tandem with the U.S. Department of State, which imposed additional sanctions on entities and individuals, as well as visa restrictions. Together, the State and Treasury actions impose severe costs for those who support President Vladimir Putin’s war.

“As innocent people suffer from Russia’s illegal war of aggression, Putin’s allies have enriched themselves and funded opulent lifestyles,” said Secretary of the Treasury Janet L. Yellen. “The Treasury Department will use every tool at our disposal to make sure that Russian elites and the Kremlin’s enablers are held accountable for their complicity in a war that has cost countless lives. Together with our allies, the United States will also continue to choke off revenue and equipment underpinning Russia’s unprovoked war in Ukraine.”

Elites Close to The Kremlin

Andrey Grigoryevich Guryev (A.G. Guryev) is a known close associate of Russian Federation President Vladimir Putin and previously served in the Government of the Russian Federation; he was appointed to the Federation Council of the Federal Assembly of the Russian Federation in 2001, where he served until 2013. A.G. Guryev owns the Witanhurst estate, which is the second-largest estate in London after Buckingham Palace.

A.G. Guryev is the founder and former Deputy Chairman of PhosAgro, a leading Russian chemical company. A.G. Guryev was designated pursuant to E.O. 14024 for operating or having operated in the accounting sector and the management consulting sector of the Russian Federation economy. A.G. Guryev has also been sanctioned by the United Kingdom. OFAC has issued FAQ 1075 to clarify that PhosAgro is not designated or otherwise blocked, and to highlight the authorization for transactions related to fertilizer and other agricultural commodities in General License (GL) 6B.

Today, OFAC also identified Alfa Nero, a Cayman Islands flagged yacht that A.G. Guryev reportedly bought for $120 million in 2014, as blocked property of A.G. Guryev. Alfa Nero has reportedly shut off its location tracking hardware in order to avoid seizure.

Andrey Andreevich Guryev (A.A. Guryev), A.G. Guryev’s son, was designated today pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy. A.A. Guryev has also been sanctioned by Australia, Canada, the European Union, Switzerland, and the UK. He was formerly the CEO of PhosAgro.  A.A. Guryev is the 100 percent owner of Dzhi AI Invest OOO (DAI), an investment entity located in Russia. DAI’s activities include deposit banking, insurance, and financial services. DAI was designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.

Viktor Filippovich Rashnikov (Rashnikov) is a Russian Federation national and businessman who is the majority owner and chairman of the Board of Directors of Publichnoe Aktsionernoe Obschestvo Magnitogorskiy Metallurgicheskiy Kombinat (MMK). Located in Magnitogorsk, Russia, MMK is one of the world’s largest steel producers. MMK operates a large steel-producing complex encompassing the entire production chain, from the preparation of iron ore to downstream processing of rolled steel. MMK is one of Russia’s largest taxpayers, providing a substantial source of revenue to the Government of the Russian Federation. MMK and Rashnikov were designated today pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy. Rashnikov has also been sanctioned by Australia, Canada, the EU, Switzerland, and the UK.

OFAC also designated Investitsionnaya Kompaniya MMK-FINANS (MMK-FINANS) and MMK Metalurji Sanayi Ticaret Ve Liman Isletmeciligi Anonim Sirketi (MMK Metalurji), two subsidiaries of MMK. MMK-FINANS is an investment company located in Magnitogorsk, Russia, that provides a wide array of investment, financial, and consulting services for the stock market both for individuals and legal entities, including its main client, MMK. MMK Metalurji is a Turkey-based subsidiary that manufactures steel products. MMK Metalurji operates and owns two steel facilities in Turkey, as well as a seaport that is located in Hatay, Dortyol, Turkey. MMK-FINANS was designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy. MMK Metalurji was designated pursuant to E.O. 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, MMK, a person whose property and interests in property are blocked pursuant to E.O. 14024.

In conjunction with these actions, Treasury has issued a Russia-related GL 47, authorizing transactions ordinarily incident and necessary to wind down any transaction involving MMK or any entity in which MMK owns, directly or indirectly, a 50 percent or greater interest, through 12:01 a.m. eastern daylight time, September 1, 2022, and Russia-related GL 48, authorizing the divestment or transfer of MMK debt or equity and wind down of related derivative contracts through 12:01 a.m. eastern daylight time, October 3, 2022. OFAC has also issued Russia-related GL 49, authorizing transactions ordinarily incident and necessary to wind down any transaction involving MMK Metalurji or any entity in which MMK Metalurji owns, directly or indirectly, a 50 percent or greater interest, through 12:01 a.m. eastern standard time, January 31, 2023.

Russia’s Elites

Alina Maratovna Kabaeva (Kabaeva) is a former member of the State Duma. Kabaeva was designated today pursuant to E.O. 14024 for being or having been a leader, official, senior executive officer, or member of the board of directors of the Government of the Russian Federation. Kabaeva has a close relationship to Putin and is the current head of the National Media Group, a pro-Kremlin empire of television, radio, and print organizations. She has also been sanctioned by the EU and the UK.

Natalya Valeryevna Popova (Popova) is the First Deputy Director of Non-State Development Institute Innopraktika, a technology company in Russia. Popova was designated today pursuant to E.O. 14024 for operating or having operated in the technology sector of the Russian Federation economy, and for being or having been a leader, official, senior executive officer, or member of the board of directors of LLC VEB Ventures, an entity designated pursuant to E.O. 14024. Popova was also designated for being a spouse or adult child of Kirill Aleksandrovich Dmitriev, a person whose property and interests in property are blocked pursuant to section 1(a)(iii)(A) of E.O. 14024.

Sanctions Evasion Attempts

Joint Stock Company Promising Industrial and Infrastructure Technologies (JSC PPIT) is a financial institution owned by the Russian Federal Agency for State Property Management. JSC PPIT attempted to facilitate the circumvention of sanctions imposed on the Russian Direct Investment Fund (RDIF). In late February 2022, RDIF Deputy CEO Anatoly Alexandrovich Braverman indicated plans to transfer all assets and cash from RDIF to JSC PPIT. The proposal was related to the anticipated addition of RDIF to OFAC’s Specially Designated Nationals and Blocked Persons List.

JSC PPIT was designated today pursuant to E.O. 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, the Government of the Russian Federation, and for operating or having operated in the financial services sector of the Russian Federation economy.

The transfer of assets and cash was thought to be a viable method to evade restrictions on RDIF. With today’s action, OFAC has sent a clear message that those who facilitate U.S. sanctions evasion will themselves be sanctioned.

Relatedly, Anton Sergeevich Urusov (Urusov), General Director of JSC PPIT, was designated today pursuant to E.O. 14024 for being or having been a leader, official, senior executive officer, or member of the board of directors of JSC PPIT, an entity whose property and interests in property are blocked pursuant to E.O. 14024, and for being or having been a leader, official, senior executive officer, or member of the board of directors of the Government of the Russian Federation.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the persons above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.

For information concerning the process for seeking removal from any OFAC list, including OFAC’s List of Specially Designated Nationals and Blocked Persons, please refer to OFAC’s Frequently Asked Question 897. Additional information regarding sanctions programs administered by OFAC.

Identifying information on the individuals and entities sanctioned or property identified today. 

###