In early August 2018, after it was determined that the Russian government was involved in an attempt to assassinate UK citizen Sergei Skripal and his daughter Yulia Skripal with the use of a Novichok nerve agent, the U.S. Department of State (State Department) ruled under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 that the Russian government had used chemical or biological weapons in violation of international law. In an August 27, 2018 Federal Register notice, the U.S. government announced its sanctions in response, which became effective that date:

  • Foreign Assistance: Termination of assistance to Russia under the Foreign Assistance Act of 1961, except for urgent humanitarian assistance and food or other agricultural commodities or products.
  • Termination of Arms Sales: Termination of (a) sales to Russia under the Arms Export Control Act of any defense articles, defense services or design and construction services; and (b) licenses for the export to Russia of any item on the United States Munitions List.
  • Termination of Arms Sales Financing: Termination of all foreign military financing for Russia under the Arms Export Control Act.
  • Denial of U.S. Government Credit or Other Financial Assistance: Denial to Russia of any credit, credit guarantees, or other financial assistance by any department, agency or instrumentality of the U.S. government, including the Export-Import Bank of the United States.
  • Exports of National Security-Sensitive Goods and Technology: Prohibition on the export to Russia of any goods or technology on that part of the control list established under Section 2404(c)(1) of the Appendix to Title 50.

Continue Reading Department of State Imposes Additional Sanctions on Russia

The Department of Commerce has announced the initiation of a Section 232 investigation into whether the present quantity and circumstances of uranium ore and product imports into the United States threaten to impair national security. The decision was in response to a petition filed by two U.S. uranium mining companies and consultations with industry stakeholders, members of Congress, the Department of Defense, Department of Energy and other interested parties. Commerce Secretary Wilbur Ross has sent a letter to Secretary of Defense James Mattis informing him of the initiation of the investigation. Continue Reading Department of Commerce Initiates Section 232 Investigation into Uranium Imports

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), in consultation with the Department of State, has sanctioned numerous Russian oligarchs and the companies they own or control, 17 senior Russian government officials, and a state-owned Russian weapons trading company. In his announcement, Treasury Secretary Steven Mnuchin stated, “The Russian government engages in a range of malign activity around the globe, including continuing to occupy Crimea and instigate violence in eastern Ukraine, supplying the Assad regime with material and weaponry as they bomb their own civilians, attempting to subvert Western democracies, and malicious cyber activities. Russian oligarchs and elites who profit from this corrupt system will no longer be insulated from the consequences of their government’s destabilizing activities.”

The full list of individuals and entities being placed on OFAC’s Specially Designated Nationals (SDN) list is available here. With the placement of these persons and entities on the SDN list, U.S. persons are now generally prohibited from engaging in transactions with them, and all assets subject to U.S. jurisdiction of these designated individuals and entities are frozen. OFAC has cautioned that non-U.S. persons could face sanctions for knowingly facilitating significant transactions for or on behalf of these Russian individuals or entities.

Generally, the Russian oligarchs placed on the SDN list are known for their involvement in Russia’s energy sector and are close allies to Russian President Vladimir Putin or are current Russian government officials. Many of the companies these oligarchs own or control have also been sanctioned and placed on the SDN List. They are: B-Finance Ltd.; Basic Element Limited; EN+ Group PLC; JSC EuroSibEnergo; United Company RUSAL PLC; Russian Machines; GAZ Group; Agroholding Kuban; Gazprom Burenie, OOO; NPV Engineering Open Joint Stock Company; Ladoga Menedzhment, OOO; Russian Machines; and Renova Group. OFAC has cautioned that this list of companies owned or controlled by the sanctioned Russian oligarchs should not be viewed as exhaustive, and reminds U.S. persons and companies of OFAC’s 50 percent rule. Under this rule, property and interests in property of entities directly or indirectly owned 50 percent or more in the aggregate by one or more persons or entities placed on the SDN list are considered blocked regardless of whether such entities appear on the list. Appropriate party screening and due diligence will increasingly be necessary when U.S. persons or companies engage in transactions in Russia.

Given the scope of these sanctions, OFAC has issued General License No. 12 to allow for U.S. companies currently engaged in transactions with these Russian companies to wind down operations and conclude contracts or other agreements that were in effect before April 6, 2018. All activities with these Russian companies must conclude by June 5, 2018. OFAC has issued General License No. 13, authorizing U.S. persons to undertake any necessary transactions necessary to divest or transfer any debt, equity or other holdings in EN+ Group PLC, GAZ Group and United Company RUSAL PLC by May 7, 2018.

Due to Russia’s continued support of the Assad regime and its destabilizing activities in Syria, OFAC has sanctioned Rosoboroneksport, a state-owned Russian weapons trading company, and its related bank, Russian Financial Corporation. Rosoboroneksport has been placed on OFAC’s SDN list and its Sectoral Sanctions Identifications (SSI) list, a list identifying persons and entities operating in certain sectors of the Russian economy (such as financial services, energy, metals and mining, engineering and defense) under which the United States has placed certain additional restrictions limiting U.S. companies from engaging in specific transactions with such SSI listed entities.

The Office of the U.S. Trade Representative (USTR) has released its annual report on significant foreign trade barriers, providing an inventory of the most important foreign barriers affecting U.S. exports of goods and services, foreign direct investment by U.S. persons and protection of intellectual property rights. The term “trade barriers” does not have a fixed definition but is broadly defined by the USTR as government laws, regulations, policies or practices that either protect domestic goods and services from foreign competition, artificially stimulate exports of particular domestic goods and services, or fail to provide adequate and effective protection of intellectual property rights. The report classifies foreign trade barriers into 10 different categories, including import policies, government procurement, export subsidies, lack of intellectual property protections and service/investment barriers. Continue Reading USTR Releases 2018 National Trade Estimate Report on Foreign Trade Barriers

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned five entities and 19 individuals it has identified as engaging in Russian cyber activity, including “attempted interference in U.S. elections, destructive cyber-attacks, and intrusions targeting critical infrastructure,” according to Treasury Secretary Steven Mnuchin. The Treasury Department indicated that these sanctions were in response to interference in the 2016 U.S. election and the execution of destructive cyber-attacks, including the NotPetya attack attributed to the Russian military that is believed to be the most destructive and costly attack in history. The sanctions are also in response to continuing efforts by Russian government cyber actors who have targeted U.S. government entities and multiple critical U.S. infrastructure sectors, including energy, nuclear and commercial facilities and the water, aviation and critical manufacturing sectors. The White House also joined France, Germany and the United Kingdom in condemning the recent use of a military-grade nerve agent in an attempt to murder two UK citizens and noted that this incident further demonstrates the reckless and irresponsible conduct of the Russian government.

The sanctions are being implemented pursuant to Executive Order 13694, which targets malicious cyber actors, and under the Countering America’s Adversaries Through Sanctions Act (CAATSA). Particularly, the sanctions include the Federal Security Service (FSB) and Main Intelligence Directorate (GRU), a Russian military intelligence organization, which have both been key actors in Russia’s ongoing efforts to undermine cybersecurity. As a result of these designations, all property and interests in property of the designated entities/persons subject to U.S. jurisdiction are blocked and U.S. persons are generally prohibited from engaging in transactions with them.

The Department of Commerce’s Bureau of Industry and Security (BIS) has sanctioned 21 entities determined by the U.S. government to be acting contrary to the national security or foreign policy interests of the United States. BIS has taken this action to ensure the efficacy of existing sanctions on the Russian Federation (Russia) for violating international law and fueling the conflict in eastern Ukraine. These entities have been placed on the BIS Entity List, which identifies entities and other persons that are subject to specific license requirements for the export, reexport and/or transfer (in-country) of specified items. Engaging in transactions with any of these entities now entails additional export licensing requirements and approval from BIS. The license review policy for each listed entity is identified in the License Review Policy column on the Entity List.

Energy Fuels Inc. and Ur-Energy Inc. (the petitioners) have jointly submitted a petition to the U.S. Department of Commerce for relief under Section 232 of the Trade Expansion Act of 1962 from imports of uranium products from state-owned and state-subsidized enterprises in Russia, Kazakhstan and Uzbekistan. According to the petition, such imports now supply nearly 40 percent of U.S. demand and threaten U.S. national security. Despite uranium’s critical role in the United States supporting clean electricity and the national defense, “imports of cheap, foreign state-subsidized uranium have swelled in recent years to the point that domestic suppliers currently provide less than 5% of our nation’s demand.” As recently as 1980, the petitioners argue, “U.S. producers supplied nearly 100% of our domestic uranium needs, and in 1989 the DOC initiated a Section 232 investigation at the request of the U.S. Department of Energy (“DOE”) because of concerns that uranium imports exceeded 37.5% at that time. The problem is far worse now.” The petition also notes that China is significantly growing its state-owned nuclear enterprises and intends to penetrate the U.S. market with nuclear fuel that will directly compete with U.S. uranium miners. Under U.S. law, the petitioners argue that the warheads in U.S. nuclear weapons must be manufactured from uranium sourced from U.S. mines; tritium (an essential component of nuclear weapons) must be produced in a U.S. reactor using domestic uranium; and highly-enriched and fabricated uranium fuel for the U.S. Navy must be U.S. in origin. If this import trend continues and the condition of the U.S. uranium mining industry continues to worsen, the petitioners contend that the United States will lose the ability to supply these essential national security requirements with domestic sources. The petition seeks remedies that will set a quota to limit U.S. uranium imports, effectively reserving 25 percent of the U.S. nuclear market for U.S. uranium production. It also seeks implementation of a requirement for U.S. federal utilities and agencies to buy U.S. uranium in accordance with President Trump’s Buy American policy.

Once the Department of Commerce initiates the investigation, it will have 270 days to prepare a report for the president. Following receipt of that report, the president will have 90 days to act on any recommendations and take action if necessary to “adjust the imports of an article and its derivatives” and/or pursue other lawful non-trade related actions necessary to address the threat. A full copy of the petition is available on Energy Fuels’ website.