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Alexandra Baj

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Alex Baj’s practice primarily involves export controls and economic sanctions laws and regulations, anti-corruption investigations and compliance, international trade, and security clearance issues. Alex advises clients on export control and economic sanctions laws and regulations, including the Export Administration Regulations (EAR), International Traffic in Arms Regulations (ITAR), US sanctions regulations administered by the Office of Foreign Assets Control (OFAC), and nuclear export controls under the jurisdiction of the Nuclear Regulatory Commission (NRC).  Alex specializes in the development and implementation of export and anti-corruption compliance policies and procedures and training, internal investigations and voluntary disclosures under the EAR, the ITAR, and OFAC rules, due diligence for mergers and acquisitions, and on encryption and cybersecurity export controls.  Her clients include companies involved in defense, aerospace, software, semiconductor, and uranium processing industries.

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On February 23, 2022, the White House announced sanctions on the Nord Stream 2 pipeline following the announcement that Germany would halt certification of the project. Shortly after, the US Treasury Department’s Office of Foreign Assets Control (OFAC) named Nord Stream 2 AG and its managing director as Specially Designated Nationals (SDNs) pursuant to the Protecting Europe’s Energy Security Act (PEESA) and Executive Order (EO) 14039 of August 20, 2021. OFAC also issued General License No. 4 (GL-4) under EO 14039 authorizing US persons to engage in transactions that are ordinarily incident and necessary to the wind down of transactions involving Nord Stream 2 AG and any entity owned 50 percent or more by it, until March 2, 2022.

The day before, on February 22, 2022, OFAC named more than 40 entities, five individuals, and five vessels as SDNs under EO 14024 of April 15, 2021. The targets included two banks: Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank (VEB) and Promsvyazbank Public Joint Stock Company (PSB). US persons are prohibited from engaging in any transfer, transaction, export, import, withdrawal, or other dealing involving property or interests in property of SDNs, including the two banks and Nord Stream 2 AG, and if in the possession of a US person or otherwise in the United States, such property or interest in property must be blocked and reported to OFAC in no more than ten days. The prohibitions also apply to any legal entity owned 50 percent or more by one or more SDNs, even if not specifically named or included on the OFAC SDN list.…

Continue Reading Update: Biden Administration Announces Sanctions on Nord Stream 2, Russian Banks, Sovereign Debt and Other Targets

On February 21, 2022, the White House issued a new Executive Order (EO) imposing comprehensive sanctions on the disputed Donetsk and Luhansk regions of Ukraine following President Vladimir Putin’s announcement that Russia would recognize the independence of the so-called Donetsk People’s Republic (DNR) and Luhansk People’s Republic (LNR) and place Russian military forces in those territories for purported peacekeeping operations.

The new EO prohibits:

  • new investment in the DNR or LNR by US persons, wherever located;
  • the importation into the United States, directly or indirectly, of any goods, services, or technology from the DNR or LNR;
  • the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a US person, wherever located, of any goods, services, or technology to the DNR or the LNR; and
  • any approval, financing, facilitation, or guarantee by a US person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited if performed by a US person or within the United States.

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Continue Reading White House Announces First Sanctions after Russia Enters Ukraine’s Donetsk and Luhansk Regions

Economic sanctions and export controls will form a core part of any multilateral response to an escalation of Russia’s military actions targeting Ukraine. While it is not possible to predict with certainty whether an escalation will occur or what form the responsive measures would take, this blog post outlines some of the current US sanctions proposals and authorizations to assist companies in taking preliminary steps to assess their potential exposure.

As of January 2022, none of the United States, the EU, or the UK have implemented any new, significant Russia-related sanctions or export control measures concerning Russia’s recent military buildup near the Russia-Ukraine border. Based on events in 2014 and the sanctions that ensued, companies could face rapid and potentially disruptive regulatory restrictions with wide-ranging impacts on a variety of industries. Some measures could be imposed within hours of a triggering event, or even prior to a specific triggering event. The US, EU, and UK are likely to coordinate a sanctions response to some extent, but some variations across different jurisdictions’ sanctions measures are also to be expected.  According to reports, policymakers have yet to agree on the triggers for new sanctions, and diplomatic efforts are ongoing.…

Continue Reading Preparing for New Russia-Related Sanctions and Export Controls

On April 15, 2021, the White House and the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) announced a package of economic sanctions targeting Russia, including expansive new legal authorities that would allow for the imposition of additional future sanctions on Russia in the technology sector and on Russian government bodies.  OFAC has also issued expanded restrictions on participation in the primary market for Russian sovereign debt, and lending to the Russian government, by US financial institutions.  In addition, OFAC blocked nearly 40 additional individuals and entities for “attempt[ing] to influence the 2020 [US] presidential election” and engaging in certain activities in Crimea.  At the same time, the US Department of State announced the expulsion of 10 Russian diplomats.

The centerpiece of the package is Executive Order (“E.O.”) 14024, which, according to an OFAC press release, “elevates the [US] government’s capacity to deploy strategic and economically impactful sanctions to deter and respond to Russia’s destabilizing behavior.”  As the first significant Russia sanctions action by the Biden Administration, E.O. 14024 appears to have been intended to send a strong signal to Russia, but without taking action at this stage that would be highly or disproportionately economically damaging.  In taking this approach, it appears that the Administration has left open the possibility of an improvement in relations with Russia.  Indeed, these sanctions were preceded by President Biden’s April 13th proposal of a possible summit with President Putin to “discuss the full range of issues facing the United States and Russia.”…

Continue Reading New Russia Sanctions Focused on the Technology Sector and Sovereign Debt Markets

On March 2, 2021, the US Departments of Treasury, State, and Commerce announced the coordinated imposition of sanctions and other restrictive measures on Russia and Russian officials and entities for the “poisoning and subsequent imprisonment of Russian opposition figure Aleksey Navalny.” The Department of the Treasury added seven Russian officials and entities to the Specially Designated Nationals and Blocked Persons List (the SDN List) pursuant to Executive Order (EO) 13661 and EO 13382, thereby blocking their property or interests in property that come within the possession of US persons or the jurisdiction of the United States. US persons are now prohibited from engaging in transactions with these SDNs. The State Department designated seven entities under its own authority, including four that were already on the SDN List. Treasury further expanded the sanctions applied to Russia in 2018 after the poisoning of Sergei Skripal in the UK, and named six entities as operating for the Russian defense sector, triggering sanctions. The Commerce Department announced the addition of fourteen entities to the Entity List, which triggers a licensing requirement for exports, re-exports, and in-country transfers to those entities of all items subject to the US Export Administration Regulations (EAR).
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Continue Reading US Applies Wide Range of Sanctions to Russian Officials and Entities

On August 27, 2020, the US Department of Defense (“DoD”) published a second tranche to its list of “Communist Chinese military companies,” pursuant to Section 1237 of the of the National Defense Authorization Act for Fiscal Year 1999 (the “DoD List”).

The announcement follows the DoD’s June 24, 2020, publication of a letter to Senator Tom Cotton enclosing a list of twenty companies headquartered in the People’s Republic of China (“PRC”) which DoD determined are operating directly or indirectly in the United States and are “Communist Chinese military companies.”

(Click here for Steptoe’s blog post following the June 24, 2020 publication of the DoD letter.)…

Continue Reading Update: US Department of Defense Publishes Update to List of “Communist Chinese Military Companies”

On July 16, 2020, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued two new Ukraine-/Russia-related general licenses:  General License 15I, Authorizing Certain Activities Involving GAZ Group, which replaces General License 15H; and General License 13O, Authorizing Certain Transactions Necessary to Divest or Transfer Debt, Equity, or Other Holdings in GAZ Group, which replaces General License 13N.  OFAC also updated nine related FAQs – 570, 571, 586, 588, 589, 590, 591, 592, and 625 – on July 22.

Most notably, General License 15I expands the scope of the pre-existing authorization (covering only maintenance, wind-down and a very limited set of additional activities involving GAZ Group) to include new activities relating to the manufacture and sale of vehicles and related products.  Although many activities were able to continue under the prior GAZ Group general licenses (due to the expansive definition of “maintenance” in FAQ 625), this appears to be an important development for GAZ Group and for prospective or new business partners of GAZ Group.  OFAC has not disclosed any specific developments triggering this change, such as with respect to the ownership or control of Oleg Deripaska in GAZ Group, although the new license does provide for new reporting obligations related to ownership and control of GAZ Group.

General License 15I authorizes certain activities, subject to numerous limitations stated therein, for 190 days – from July 16, 2020 through 12:01 a.m. eastern standard time, January 22, 2021 – which is over a month longer than any of its predecessors.…

Continue Reading OFAC Authorizes Additional Activities Involving GAZ Group

On July 15, 2020, the U.S. Department of State updated its public guidance on Section 232 of the Countering America’s Adversaries Through Sanctions Act (“CAATSA”), which authorizes (but does not require) the president to impose sanctions on “a person” that “knowingly” invests in Russian energy export pipelines, or that sells Russia goods, technology or services for such pipelines where certain monetary thresholds are met.

The Department of State announced that the purpose of the updated guidance is “to expand the focus of implementation of Section 232 to address certain growing threats to U.S. national security and foreign policy interests related to Russian energy export pipelines, particularly with respect to Nord Stream 2 and the second line of TurkStream.” This is a significant change, as the prior public guidance stated “The focus of implementation of Section 232 sanctions would be on . . . [Russian] energy export pipeline projects initiated on or after August 2, 2017 . . . For the purposes of Section 232, a project is considered to have been initiated when a contract for the project is signed. Investments and loan agreements made prior to August 2, 2017 would not be subject to Section 232 sanctions.”  This prior guidance had suggested that the focus of implementation of Section 232 would not be on Nord Stream 2 or Turkstream (either line), because these projects were “initiated” before August 2, 2017.…

Continue Reading US Clarifies Secondary Sanctions on Nord Stream 2

On June 24, 2020, the US Department of Defense (“DoD”) sent a letter to Senator Tom Cotton enclosing a list of twenty companies headquartered in the People’s Republic of China (“PRC”) which DoD determined are operating directly or indirectly in the United States and are “Communist Chinese military companies.”  Titled “Qualifying Entities Prepared in Response to Section 1237 of the National Defense Authorization Act for Fiscal Year 1999 (PUBLIC LAW 105-261),” the “DoD List” includes some Chinese companies frequently associated with the Chinese military, and others that may not have been previously associated with the Chinese military.

For companies doing business with the US government, the US government may consider the inclusion of any of the listed companies in a government contractor’s supply chain as a “supply chain risk” that must be assessed, particularly in connection with information technology.  DoD contractors are already prohibited by their contracts from acquiring certain items and services from “any Communist Chinese military company.”

While not a sanctions list itself, the DoD List may lead to sanctions actions by the US government, as well as reactions from business partners assessing the risk of further action against the listed companies by the US government, particularly for listed companies that are not currently subject to US sanctions.  Pressure from Congress may continue for the administration to continue to update this list, and to impose restrictions on the companies on this list.…

Continue Reading US Department of Defense Publishes List of “Communist Chinese Military Companies” Operating Directly or Indirectly in United States Pursuant to Section 1237 of the National Defense Authorization Act for Fiscal Year 1999 (the “Act”)

Today, the U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) is publishing a new set of regulations tightening export controls on China, Russia and Venezuela (the new “Rule”).  The new Rule will take effect on June 29, 2020, and will apply to goods, software and technology subject to U.S. export controls jurisdiction – it will not be limited to U.S. persons.

The most significant parts of this new Rule will increase the licensing requirements and due diligence expectations that apply to trade with China, Russia and Venezuela under the U.S. Export Administration Regulations (“EAR”) when “military end users” or “military end uses” are involved.  However, in light of the way these terms are defined, industry should note that the impact of this new Rule will extend into many areas of commercial technology and trade with these countries, beyond the defense sector.

In two additional rulemakings published today, BIS is removing one license exception under the EAR (CIV) and proposing to modify another EAR license exception (APR).…

Continue Reading Commerce Issues Long-Awaited Export Control Rules for China, Russia and Venezuela