By Alexander Miller, consultant in international politics, for Eurasia Business News – April 8, 2022
Yesterday the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Alrosa, a Russian state-owned company and the world’s largest diamond mining company, which is also responsible for 90 percent of Russia’s diamond mining capacity.
The U.S. Department of State also redesignated Joint Stock Company United Shipbuilding Corporation (USC), as well as its subsidiaries and board members. USC is a Russian state-owned enterprise that develops and builds the majority of the Russian military’s warships, and those built for foreign customers. These actions were taken pursuant to the U.S. Executive Order (E.O.) 14024. Through these designations, U.S. Treasury wants to cut off additional sources of support and revenue for the Government of the Russian Federation (GoR) to fund its military operation in Ukraine.
“These sanctions will continue to apply pressure to key entities that enable and fund Russia’s unprovoked war against Ukraine,” said Brian Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence.
Public Joint Stock Company Alrosa (Alrosa) is a Russian state-owned corporation and the world’s largest diamond mining company, accounting for 28 percent of global diamond mining. In 2021 Alrosa generated over $4.2 billion in revenue. Diamonds are one of Russia’s top ten non-energy exports by value, with exports in 2021 totaling over $4.5 billion. Alrosa is also responsible for 90 percent of Russia’s diamond mining capacity.
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On April 7, OFAC also expanded previous sanctions by designating Alrosa pursuant to E.O. 14024 for being owned or controlled by, or for having acted or purported to act for or on behalf of, directly or indirectly, the Russian government. Alrosa has also been sanctioned by Canada, the United Kingdom, New Zealand, and the Bahamas. All entities owned 50 percent or more, directly or indirectly, by Alrosa are blocked under E.O. 14024, even if not separately designated or identified by OFAC.
United Shipbuilding Corporation (USC) is a major Russian state-owned company responsible for developing and building the Russian Navy’s warships. USC is responsible for the construction of almost all Along with re-designating USC, the U.S. Department of State designated 28 subsidiaries and eight board members. Among them are the Chairman of the Board of Directors of JSC “USC” Georgy Poltavchenko and its General Director Alexey Rakhmanov.
These actions were also taken pursuant to E.O. 14024.
All individuals and legal entities are included in the SDN (Specially Designated Nationals And Blocked Persons List), that is, they fell under the blocking sanctions of the U.S. Treasury. This means that all the property of sanctioned persons in the United States is blocked, and persons in the United States are prohibited from all transactions with them.
Russia launched a military operation in the morning of February 24, with the official goal to “demilitarize Ukraine”, remove the Ukrainian government and protect the right of Russians living in Donbass, Eastern Ukraine. In a televised address to Russian citizens, President Vladimir Putin stated that circumstances “require decisive and immediate action from us, the people’s republics of Donbass have asked for help.”
The Kremlin continues voicing that Moscow’s plans do not include the occupation of Ukrainian territories. The Russian goals would be “demilitarization and denazification” of the country.
Ukraine and its Western partners sees the Russian military operation as an invasion and imposed strong strong sanctions against Russian state officials, banks, companies and oligarchs, to put pressure on the Russian government and lead it to a ceasefire and a withdrawal from Ukraine.
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