In a significant move today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced further sanctions against Russia, citing the nation's insufficient commitment to a peace process intended to resolve the ongoing war in Ukraine. This latest round of sanctions aims to intensify pressure on Russia's energy sector, thereby undermining the Kremlin's ability to finance its military operations and sustain its struggling economy.
The United States remains firmly committed to advocating for a peaceful resolution to the conflict. Treasury Secretary Scott Bessent emphasized, “Now is the time to stop the killing and for an immediate ceasefire.” He pointed out that the sanctions target Russia’s two largest oil companies, which significantly fund the Kremlin's military efforts. The U.S. is prepared to take further actions if necessary to support President Trump’s initiatives to put an end to the war. The Treasury encourages allied nations to join in adhering to these critical sanctions.
Today's sanctions specifically target Open Joint Stock Company Rosneft Oil Company (Rosneft) and Lukoil OAO (Lukoil). These companies are now officially designated under Executive Order 14024 for their operations within the Russian Federation's energy sector. Rosneft is a vertically integrated energy firm involved in various aspects of the petroleum industry, including exploration, extraction, and refining. Lukoil, similarly, is engaged in the exploration and production of oil and gas both within Russia and internationally.
In addition to the parent companies, OFAC has also designated multiple subsidiaries associated with Rosneft and Lukoil. A complete list of these entities, which are involved in the energy sector, is provided in Annex 1. It includes:
Limited Liability Company Lukoil Perm - Engaged in geological exploration and oil production. Aktsionernoe Obshchestvo Kuibyshevskii Neftepererabatyvayushchii Zavod - Operates an oil refinery. Joint Stock Company Rospan International - Involved in developing oil and gas deposits. Limited Liability Company RN Purneftegaz - Focused on oil and gas field development.All entities that are 50% or more owned, either directly or indirectly, by Rosneft and Lukoil are also blocked under Executive Order 14024, regardless of whether they have been specifically designated by OFAC.
The sanctions imposed today mean that all property and interests belonging to the designated or blocked entities that are within the United States or controlled by U.S. persons are now blocked. U.S. regulations generally prohibit transactions involving the property of blocked persons unless specifically authorized by OFAC. Violations may lead to civil or criminal penalties for both U.S. and foreign entities.
Financial institutions and other entities must be aware of the risks associated with engaging in transactions involving designated persons. Foreign financial institutions that facilitate significant transactions related to Russia’s military-industrial base could also face sanctions from OFAC. The agency has issued updated guidance regarding sanctions targeting support for Russia's military, and it is crucial for institutions to remain informed about these regulations.
The ultimate goal of these sanctions is to encourage a positive change in behavior rather than merely punish. For those wishing to seek removal from OFAC’s list, including the Specially Designated Nationals (SDN) List, guidance is available through OFAC's official channels. The U.S. Treasury will continue to monitor the situation closely and take necessary actions to support a peaceful resolution to the conflict in Ukraine.
For more detailed information on the individuals and entities sanctioned today, please refer to the official OFAC announcement.
