On December 22, 2023, the United States** took further action to tighten sanctions against Russia. The new Executive Order signed by the United States (E.O. 14114) expands U.S. sanctions authority against foreign financial institutions, specifically those with significant transactions with Russian military-industrial complexes. This measure is aimed at further restricting Russia's access to resources through the international financial system to support its military activities.
Executive Order 14114 is an extension of earlier Executive Order 14024, which authorizes the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) to impose sanctions on financial institutions that conduct or facilitate significant transactions in key sectors of the Russian Federation's economy. These sectors include the technology, defense and related materials, construction, aerospace, or manufacturing industries. In addition, any financial institution that directly or indirectly facilitates the transfer to Russia** or of certain critical items identified by the U.S. Secretary of the Treasury in conjunction with the Secretaries of State and Commerce will also face sanctions.
The command,"Foreign Financial Institutions"The definition is very broad and covers many types of establishments, from banks and credit card system operators to brokers, options brokers and gem or jewelry dealers. In addition, a holding company, affiliate or subsidiary is also included in the definition.
The U.S. Department of the Treasury also published a list of critical items, added several new generic licenses, and provided new compliance inquiries and FAQs to guide entities. The purpose of these measures is to ensure that financial institutions and other relevant parties are able to properly understand and comply with the new regulations.
According to the White House statement, sanctioned financial institutions will face full blockade sanctions, the possibility of losing their ** bank accounts in the United States, or facing sanctions with strict conditions. This is the first time that the United States has introduced a tool that allows it to impose secondary sanctions on banks that indirectly contribute to Russia's military activities, the United States emphasized.
The move marks a new stage in the economic pressure of the United States on Russia. By expanding the scope of sanctions and deepening them, the United States intends to cut off Russia's access to resources from the international financial system to support its military activities. These actions not only affect Russia, but also pose a significant challenge to global financial institutions, requiring them to look more carefully at Russia-related transactions and business activities.
The global impact and long-term consequences of this sanction will be felt over time. Financial institutions and the international community need to pay close attention to further developments in the United States and the impact of these measures on the international economic and financial system.
The list of key items released by the U.S. Treasury Department on December 22 is as follows: