On October 27, 2017, the US Department of State, pursuant to Section 231 of the Countering America’s Adversaries Through Sanctions Act (CAATSA), published the list of entities that are part of, or operate for or on behalf of, the Russian defense or intelligence sectors, as well as Guidance that sets out indicators of how the Trump Administration intends to implement Section 231. President Trump reluctantly signed the CAATSA on August 2, 2017, and Section 231 of CAATSA requires the imposition of sanctions on any person (US or otherwise) that, on or after that date, “knowingly…engages in a significant transaction with a person that is part of, or operates for or on behalf of, the [Russian] defense or intelligence sectors.” See our previous advisory on CAATSA. When Section 231 sanctions are triggered, the State Department (to which the authority to implement Section 231 was delegated) must impose five or more measures from a menu of sanctions. These measures range in severity from a restriction on financing by the US Export-Import Bank for exports to the sanctioned person, to more severe measures such as prohibiting US persons from conducting any transactions or dealings with the person that engages in sanctionable conduct. Beginning on January 29, 2018, these measures are to be applied to any person that engages in a significant transaction with a listed entity on or after August 2, 2017.
For more information, please see our advisory.