More Fallout from Crimea: Commerce and State Departments Announce Holds on New Licenses for Exports to Russia
By THE PAUL HASTINGS GLOBAL TRADE CONTROLS GROUP
The United States continues to ratchet up the pressure on Russia over its annexation of Crimea. Earlier this week, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) declared that, effective March 1, 2014, it had placed a “hold” on issuing all new export licenses to Russia. The move was followed by an announcement by the U.S. Department of State’s Directorate of Defense Trade Control’s (“DDTC”) that it too is halting new licenses for the export of defense articles and services to Russia. In 2013, BIS licensed nearly $1.5 billion in exports to Russia. There are no similar statistics on the value of authorizations issued by DDTC, but the combined action can be expected to have a larger impact on U.S.-Russia trade, in absolute dollars, than the relatively narrow, but much more widely-reported Treasury Department “blocking” sanctions on designated persons. These new measures could also impact third-country companies that sell U.S.-origin items controlled for export to Russia, or engage in joint development activities with Russian parties that that involve U.S. technologies, as some of those transactions fall under the licensing authority of BIS or DDTC.