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In the latest action to expand sanctions against Russia in response to its invasion of Ukraine, on March 8, 2022, President Biden announced in a televised speech a ban on imports of Russian oil, natural gas, and coal into the US.
Shortly thereafter, the White House issued a new Executive Order on Prohibiting Certain Imports and New Investments With Respect to Continued Russian Federation Efforts to Undermine the Sovereignty and Territorial Integrity of Ukraine.
General License 8A, which authorizes energy-related transactions involving the listed Russian financial institutions listed therein, does not provide an exemption from the import ban imposed under the new Executive Order. However, the Executive Order does not affect, or restrict US persons involvement in, imports of Russian oil in third countries. While the import ban has immediate effect for new contracts, the Office of Foreign Assets Control (OFAC) of the US Department of Treasury issued General License 16, permitting a wind-down period through 12:01 am, April 22, 2022 for imports pursuant to written contracts entered into prior to March 8. OFAC has confirmed that imports under existing contracts entered prior to March 8 will be allowed through April 22, and that OFAC may issue specific licenses for those scheduled to arrive after April 22 pursuant to contracts entered prior to March 8th.
In addition, members of Congress have now introduced a number of bills to ban imports of Russian petroleum products into the US:
Lastly, late in the evening on March 9, 2022, the US House of Representatives overwhelmingly passed (414-17) the bipartisan Suspending Energy Imports from Russia Act (H.R.6968), which would impose a ban, effective 45 days after enactment, on the importation of all products of the Russian Federation classified under chapter 27 of the Harmonized Tariff Schedule of the United States. The language of the bill closely tracks the spirit of the Executive Order and General License 16 issued the day before and gives authority to the US President to allow imports pursuant to written contracts or agreements that existed prior to enactment. The bill also authorizes the US President to issue a waiver if the President certifies that the waiver would be in the “national interest.” In addition, the bill calls for the US Trade Representative to use its influence at the World Trade Organization (WTO) to suspend trade concessions to Russia as well as suspend Russia’s participation in the WTO. If passed, the bill would also amend and expand the scope of the Magnitsky Human Rights Accountability Act. The bill will need to be passed by the US Senate and signed by the President in order to be enacted and become law.
In sum, the new Executive Order affects (1) imports of Russian-origin products enumerated above that were agreed to on or after March 8, 2022, or which conclude on or after April 22, 2022; and (2) new investment in new energy sector activities in Russia. This means companies should not enter into any new contracts involving the import of Russian origin covered products into the United States and US persons may not engage in, finance or facilitate new investments in energy sector activities in Russia.
We will continue monitoring developments in this fluid situation.
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