OFAC targets companies that ‘seek to profit’ from Russia’s presence in Crimea

The US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) has designated three individuals and nine entities under its Ukrainian sanctions regime ‘in response to Russia’s continuing malign activity and destabilizing behaviour.’

The Crimean region of Ukraine was annexed by Russia in 2014. The latest US sanctions address the ‘use of force’ to control parts of the Donetsk and Luhansk regions of eastern Ukraine, as well as targeting companies that are active in Crimea, in particular those involved in ‘the Russian-backed sale of Ukrainian assets unlawfully seized and nationalised to actors supporting the Kremlin’s agenda.’

Eight entities and one individual were designated for operating in Crimea. These include the Mriya Resort and Spa, a significant private investment project and five-star luxury hotel complex in the city of Yalta, Crimea, and its owner, Garant-SV. Other hotel, construction and energy businesses sanctioned were Infrastructure Projects Management Company (‘LLC UKIP’); Sanatorium AY-Petri; Sanatorium Dyulber; Sanatorium Miskhor and Krymtets, AO. Southern Project was designated for operating in Crimea and because it is owned by blocked persons Bank Rossiya and Yuri Valentinovich Kovalchuk.

Vladimir Nikolaevich Zaritsky, the former Commander in Chief of the Missile Forces and Artillery of Russia has also been sanctioned.

Two individuals and one entity were targeted for serious human rights abuse, under the Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014 (‘SSIDES’) as amended by s228 of CAATSA. Andriy Volodymyrovych Sushko, an officer in the Federal Security Service of the Russian Federation (‘FSB’), was sanctioned for suspected involvement in the abduction and abuse of a Crimean Tatar activist who objected to Russia’s occupation of Crimea.

The Ministry of State Security of the ‘so-called’ Luhansk People’s Republic (‘LPR’) and Aleksandr Basov, the Deputy Minister of State Security of the LRP, were sanctioned for suspected serious human rights abuses, including being responsible for or complicit in violent threats and acts against detainees.

OFAC’s notice can be found here:
https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20181108.aspx

The US Treasury’s press release can be found here:
https://home.treasury.gov/news/press-releases/sm543