Foley & Lardner LLP Partner Christopher Swift is quoted in The Wall Street Journal article, “The U.S. Sanctions a Russian Oligarch—but Exempts His Companies,” about the U.S. Treasury Department imposing sanctions on Russian oligarch Alisher Usmanov. The article states, "In imposing economic sanctions after Russia’s invasion of Ukraine, U.S. officials created exceptions. Their worry was that oligarchs like Mr. Usmanov had interests so deeply woven into the global economy that curtailing their businesses could trigger broader economic pain and legal blowback."
Usmanov is one of hundreds of Russian billionaires, politicians, and companies whom the U.S. government has sanctioned over the invasion of Ukraine and other Russian government actions. The situation is particularly sensitive with the U.S. facing inflation and high gas prices. “The Treasury wants to ‘maximize the amount of economic pain inflicted on adversaries, while minimizing’ consequences to the U.S. economy,” said Swift.
Some Office of Foreign Assets Control (OFAC) officials argued that nearly all of Usmanov’s businesses should be exempt from sanctions. Others within OFAC believed such a cautious approach defeated the purpose of the sanctions. Treasury official Lisa Palluconi wrote in a March 1 email that a so-called general license would give the agency space to deal with Usmanov’s business interests. "OFAC grants such licenses, which allow U.S. firms to continue doing business with sanctioned entities, to help the agency fine-tune sanctions, protect the U.S. economy, and react rapidly," said Swift.
As the Russia-Ukraine war continues, so too do new business and legal implications for companies around the world. For more information on how to mitigate risk and protect your business, contact a Foley lawyer today.