U.S. Commerce Department Expands Export Restrictions Aimed at Russia’s Defense Sector

WASHINGTON– The U.S. Department of Commerce's Bureau of Industry and Security (BIS) today announced additional steps that will further restrict trade with Russia in response to Russia's continued efforts to destabilize eastern Ukraine. Today's actions are being announced in conjunction with an announcement by the U.S. Department of the Treasury that it is also imposing a new set of targeted prohibitions and designations against a range of Russian entities.

BIS will add five entities operating in the Russian Federation’s defense sector to the BIS Entity List. Designation on the Entity List imposes a license requirement for the export, reexport or foreign transfer of items subject to the Export Administration Regulations (EAR) to the designated entities, with a presumption of denial. BIS will also require licenses for an additional group of items destined to military end uses or end users in Russia.

The entities added to the BIS Entity List are:

• Almaz-Antey Air Defense Concern Main System Design Bureau, JS is one of the world’s largest defense industry complexes, specializing in development of anti-air, anti-missile and space defense systems.
• Tikhomirov Scientific Research Institute of Instrument Design specializes in the development of weaponry control systems for fighter planes and mobile medium range anti-aircraft surface to air missile (SAM) defense vehicles.
• Mytishchinski Mashinostroitelny Zavod, OAO manufactures and supplies ordnance and accessories, including naval, aircraft, anti-aircraft and field artillery products.
• Kalinin Machine Plant, JSC designs and manufactures machines for military and civil applications.
• Dolgoprudny Research Production Enterprise develops and manufactures high-technology defense products.

In addition, BIS also added five Russian energy companies to the Entity List to impose a license requirement for the export, reexport or foreign transfer of items subject to the Export Administration Regulations (EAR) to those companies when the exporter, reexporter or transferor knows those items will be used directly or indirectly in exploration for, or production from, deepwater, Arctic offshore, or shale projects in Russia. License applications for such transactions will be reviewed with a presumption of denial when for use directly or indirectly for exploration or production from deepwater, Arctic offshore, or shale projects in Russia that have the potential to produce oil.

The Russian energy sector entities added to the BIS Entity List are:

• Gazprom, OAO major business lines are geological exploration, >production, transportation, storage, processing and sales of gas, gas condensate and oil, sales of gas as a vehicle fuel as well as generation and marketing of heat and electric power.
• Gazpromneft is a Russian oil company engaged primarily in oil & gas exploration and production, the sale and distribution of crude oil, and the production and sale of petroleum products.
• Lukoil, OAO is a leader of Russia’s petroleum industry.
• Rosneft a leader of Russia’s petroleum industry. Rosneft activities include hydrocarbon exploration and production, upstream offshore projects, hydrocarbon refining, and crude oil, gas and product marketing in Russia and abroad.
• Surgutneftegas is a Russian oil and gas company that was created in 1993 by merging several previously state-owned companies owning large oil and gas reserves in Western Siberia.

BIS controls exports and reexports of commodities, technology, and software to support national security and foreign policy, including nuclear, chemical and biological weapons, and missile non-proliferation, human rights, regional stability, and curbing terrorism. Criminal penalties and administrative sanctions can be imposed for violations of the Export Administration Regulations. For more information, please visit: www.bis.doc.gov.