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Commerce Restricts the Export of Luxury Goods to Russia and Belarus in Latest Response to Aggression Against Ukraine

ban Commerce Restricts the Export of Luxury Goods to Russia and Belarus and to Russian and Belarusian Oligarchs and Malign Actors in Latest Response to Aggression Against Ukraine

Commerce Restricts the Export of Luxury Goods to Russia and Belarus in Latest Response to Aggression Against Ukraine

Today, the U.S. Commerce Department’s Bureau of Industry and Security (BIS) forced limitations on the product, reexport, and move (in nation) of extravagance merchandise to all end clients in the Russian Federation (Russia) and Belarus and to specific Russian and Belarusian oligarchs and defame actors found around the world. This activity is in light of Russia’s fierce, proceeding with intrusion of Ukraine (as considerably empowered by Belarus) in blatant infringement of worldwide regulation.

“Putin’s conflict of choice in Ukraine keeps on negatively affecting blameless regular folks in Ukraine, powering one of the most obviously awful compassionate emergencies Europe has found in many years,” expressed Secretary of Commerce Gina M. Raimondo. “Putin and the oligarchs who fund him have gotten rich off of Putin’s uncontrolled debasement and the exploitation of the Russian public. We won’t permit Putin and his cohorts to keep living in extravagance while causing colossal affliction all through Eastern Europe. The present activity removes one more wellspring of solace and advises them that Russia is progressively secluded.”

The Deputy Secretary of Commerce Don Graves said “The Department of Commerce will continue to vigorously exercise its authorities to deprive the Russian leadership of the material support it needs to sustain its aggression as well as the material comfort that insulates them from the harm they are inflicting, The people who have benefited most from Putin’s rule should know that they are international pariahs and that their money cannot insulate them from the unlawful actions they have facilitated.  This action also targets Russian and Belarusian oligarchs and other malign actors who have supported Putin.”

The Assistant Secretary of Commerce for Export Administration Thea D. Rozman Kendler said “Before today, controls on luxury goods only applied to rogue state North Korea—a regime where its leaders and their political cronies live in opulence while their people struggle. Today’s action should remind Putin and his Russian and Belarusian cronies that the world strongly condemns the horrors they have wrought. The U.S. and our allies and partners will continue to stand together in imposing severe consequences on Russia and Belarus for the continued invasion of Ukraine.”

Today’s rule imposes significant restrictions on persons and organizations within Russia and Belarus that have the financial resources to purchase U.S.-origin luxury goods.  Additionally, this rule imposes additional costs on certain Russian and Belarusian oligarchs and malign actors (regardless of their location) who have been designated by the Department of the Treasury as Specially Designated Nationals in connection with their support for the Russian government.   This action underscores the consequences of Russia’s invasion of Ukraine and also demonstrates to influential Russian and Belarusian individuals the material impact on their lifestyle for their support of the Russian government’s actions in Ukraine.

The rule provides a list of U.S.-origin luxury goods that are impacted by today’s sanctions and includes certain spirits, tobacco products, clothing items, jewelry, vehicles, and antique goods.

The rule takes effect when released in the Federal Register on March 11, 2022.

For more information on the Commerce Department’s actions in response to Russia’s invasion of Ukraine is available online here.

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New Executive Order Authorizes Imposition of Additional Sanctions on the Government of Belarus and Certain Sectors of the Belarusian Economy

On August 9, 2021, President Biden issued Executive Order 14038 (the “EO”) which expanded the scope of the national emergency previously declared in EO 13405 of June 16, 2006. The EO imposes additional sanctions in response to conduct by the Government of Belarus (“GoB”) and the President Alyaksandr Lukashenka regime which the Biden Administration described as “long-standing abuses aimed at suppressing democracy and the exercise of human rights and fundamental freedoms.” As specific examples, the EO cites the “fraudulent” August 9, 2020 election administered by the GoB, in which Lukashenka was reelected, and the GoB’s forced grounding of an international flight to arrest Belarusian journalist Raman Pratasevich and his partner Sofia Sapega.

Among other things, the EO gives the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) the discretionary authority, in consultation with the U.S. Secretary of State, to impose blocking sanctions on GoB agencies, GoB leaders and officials, and individuals and companies operating in the defense and related materiel, security, energy, potassium chloride (potash), tobacco products, construction or transportation sectors of the Belarusian economy. The EO also authorizes OFAC to sanction individuals and entities “responsible for or complicit in” activities such as “actions or policies that threaten the peace, security, stability, or territorial integrity of Belarus,” suppression of human rights and freedom of the press, electoral fraud, deceptive transactions, and public corruption.

OFAC immediately used its authority under the EO in order to add multiple persons and entities to its Specially Designated Nationals & Blocked Persons List (“SDN List”). Those added to the SDN List under the EO include:

-BelKazTrans and Closed Joint-Stock Company New Oil Company, who were sanctioned for operating in the energy sector of the Belarusian economy;

-Inter Tobacco, Energo-Oil and Grodno Tobacco Factory Neman, who were sanctioned for operating in the tobacco product sector of the Belarusian economy;

-Cyprus-based Dana Holdings Limited, who was sanctioned for operating in the construction sector of the Belarusian economy; and

-Belaruskali OAO, who was sanctioned for being owned by the GoB and for operating in the potassium chloride (potash) sector of the Belarusian economy.

The U.S. Treasury Department published a separate press release which identifies all of the SDNs designated by OFAC under the EO. As a result of these designations, all property and interests in property of these SDNs that are or come within the U.S. or the possession or control of U.S. persons are blocked, and U.S. persons are generally prohibited from engaging in transactions involving such SDNs unless authorized by OFAC. OFAC’s “50% Ownership Rule” will also extend these blocking sanctions to any entities owned 50 percent or more, individually or in the aggregate, directly or indirectly, by one or more of these newly designated SDNs. Additionally, the EO gives OFAC the authority to impose blocking sanctions on any non-U.S. persons who provide material assistance to any SDN designated pursuant to the EO.

For Belaruskali OAO, OFAC issued General License 4, which authorizes the wind down of transactions involving Belaruskali OAO, or any entity owned 50% or more by Belaruskali OAO, through 12:01 a.m. eastern standard time on December 8, 2021. OFAC issued FAQ 918 to provide additional information regarding General License 4.

OFAC also issued FAQ 917 which clarifies the scope of the EO’s sector-based sanctions as follows:

The identification of a sector pursuant to E.O. of August 9, 2021 provides notice that persons operating in the identified sector risk exposure to sanctions; however, the identification of a sector does not automatically block all persons operating in that sector of the Belarus economy. Only persons designated on OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List), and entities owned 50 percent or more, individually or in the aggregate, directly or indirectly, by one or more such persons, are subject to blocking sanctions.

As a result, the EO does not automatically sanction persons operating in the identified sectors of the Belarusian economy, but it does provide OFAC with the authority to impose blocking sanctions on such persons at any time.


Cortney O’Toole Morgan is a Washington D.C.-based partner with the law firm Husch Blackwell. She leads the firm’s International Trade & Supply Chain group.

Grant Leach is an Omaha-based partner with the law firm Husch Blackwell focusing on international trade, export controls, trade sanctions and anti-corruption compliance.

Tony Busch is an attorney in Husch Blackwell’s Washington, D.C. office.

Militzer & Münch Continues European Expansion

With continuing efforts towards warehousing in Bulgaria and a new logistics terminal in the near future for its Paris, France branch, global air and sea freight service provider Militzer & Münch shows no signs of slowing down expansion initiatives on the New Silk Road as demand continues to increase, particularly in Southern and Eastern Europe.

“It is important that we adapt to the changing market and position ourselves clearly,” says Guillaume de Laage de Meux, Member of the Board of Directors of M&M Militzer & Münch International Holding AG. “We aim to grow with the change and to further increase our flexibility. This also includes taking into consideration regional features, and positioning the Group sustainably in niche markets as well as in established markets.”

Upon completion of construction for the Bulgarian logistics facility, cross docking, interim storage and faster customizing and distribution will be offered. Additionally, beginning in July of this year, the company’s France location will move to a larger warehouse offering a 60 percent area increase and 25 loading doors, solving the issue of space constraints at the current warehouse.

“We are working on further expanding our logistics services along the Silk Road. Belarus is a major hub between Asia and Europe,” says Guillaume de Laage de Meux. “In Belarus, we handle transport orders with our own truck fleet. We also offer air and sea transports, customs clearance and hazardous goods and heavy lift transports.”

The company has reported additional expansion efforts in regions such as Greece, Turkey and Belarus. In 2018, the Greece branch relocated to a 13,600 square meter distribution area around the same time the Turkey branch rented a new warehouse offering trans-shipping and other various logistics services.

“With the move, the Militzer & Münch Paris branch can assure the smooth handling of all traffics and also has space available for new customer business”, Guillaume de Laage de Meux says. “The additional capacities are to further boost the growth of Militzer & Münch France over the next years.”