Two shipyards designated in latest round of Russia sanctions

Russian government footage shows Ukrainian tug being rammed in November 2018 incident

Two shipyards, a marine diesel manufacturer and an offshore oil and gas exploration company are among Russian entities designated Friday by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

The latest round of sanctions “targets individuals and entities playing a role in Russia’s unjustified attacks on Ukrainian naval vessels in the Kerch Strait, the purported annexation of Crimea, and backing of illegitimate separatist government elections in eastern Ukraine.”

Ukrainian crew members still detained

According to the Treasury, 24 Ukrainian crew members remain illegally detained in Russia following a November 25, 2018 incident in which Russian authorities opened fire on and rammed three Ukrainian ships off the coast of Crimea, seizing the ships and capturing the crew members

The U.S. actions complement sanctions also taken Friday by the European Union and Canada.

“This joint initiative with our partners in the European Union and Canada reinforces our shared commitment to impose targeted and meaningful sanctions in response to the Kremlin’s attempts to disregard international norms and undermine Ukraine’s sovereignty and territorial integrity,” said Treasury Secretary Steven T. Mnuchin. “The international community is strongly aligned against Russia’s naval attacks in the Kerch Straight, purported annexation of Crimea, and support for the illegitimate separatist-conducted elections in eastern Ukraine.”

As a result of today’s designations, all property and interests in property of the designated individuals and entities are blocked, and U.S. persons are generally prohibited from transacting with them. Moreover, any entities owned 50 percent or more by these designated persons are also blocked by operation of law.

Designations Related to Russia’s Attack in the Kerch Strait

OFAC Friday sanctioned four Russian officials who were involved in the Kerch Strait attack. OFAC designated Gennadiy Medvedev, the Deputy Director of the Border Guard Service of Russia’s Federal Security Service; Sergey Stankevich, the Head of the Border Directorate of Russia’s Federal Security Service; and Andrey Shein, the Deputy Head of the Border Directorate and Head of the Coast Guard Unit of Russia’s Federal Security Service. Medvedev and Stankevich directly controlled and organized the attack against the Ukrainian ships and their crew, while Shein participated in the operation against the seized Ukrainian ships and crew.

OFAC also designated Ruslan Romashkin, the Head of the Service Command Point of the Federal Security Service of the Russian Federation for the Republic of Crimea and Sevastopol.

Medvedev, Stankevich, Shein, and Romashkin are being designated pursuant to Executive Order (E.O.) 13661 for being officials of the Government of the Russian Federation.

Designations Related to Russia’s Purported Annexation of Crimea

Today’s action also targets six Russian defense firms with operations in Crimea, several of which misappropriated Ukrainian state assets to provide services to the Russian military. Four of these entities are being designated for operating in the defense and related materiel sector of the Russian Federation economy, and two entities are being designated for operating in the Crimea region of Ukraine.

The firms targeted include:

Yaroslavsky Shipbuilding Plant is a Russian state-owned shipbuilding plant that has built vessels for Russia’s Federal Security Service (FSB) and the Russian Ministry of Defense. Yaroslavsky Shipbuilding Plant is also the project developer for a naval vessel that was completed at the Federal SUE Shipyard “Morye” in Crimea.

Zelenodolsk Shipyard Plant is one of the largest ship manufacturers in Russia and has produced missile frigates and corvettes for the Russian Navy. The Zelenodolsk Shipyard Plant has collaborated with Crimea-based enterprise Skloplastic, which was unlawfully nationalized by the Russian government following its illegal invasion of Crimea in 2014

AO Kontsern Okeanpribor (Okeanpribor) is a producer of hydroacoustic equipment and has supplied components to the Russian Navy. Okeanpribor has also collaborated on a naval project at the Federal SUE Shipyard “Morye” in Crimea, which was designated by OFAC on September 1, 2016.

PAO Zvezda (Zvezda) is a supplier of diesel engines to the Russian Navy. Zvezda has also supplied components for Russian naval vessels that were being built at the Federal SUE Shipyard “Morye” in Crimea.

AO Zavod Fiolent (Fiolent) is a Crimea-based electronics manufacturer that has supplied parts for use in Russian military equipment. Fiolent was unlawfully seized by the Russian Federation following its annexation of Crimea in 2014. Fiolent is being designated pursuant to E.O. 13685 for operating in the Crimea region of Ukraine.

GUP RK KTB Sudokompozit (Sudokompozit) is a Crimea-based producer of defense components that are supplied for Russian military use. Sudokompozit was unlawfully seized by the Russian Federation following its annexation of Crimea in 2014. Sudokompozit is being designated pursuant to E.O. 13685 for operating in the Crimea region of Ukraine.

Entities designated due to their activities in Crimea include LLC Novye Proekty which, in 2016, was an oil and gas exploration license for the Crimean Black Sea shelf. The Crimean shelf is believed to be rich in hydrocarbons and authorities in Ukraine have reported that Ukraine lost about 80 percent of its oil and gas deposits in the Black Sea due to Russia’s purported annexation of Crimea. Novye Proekty’s license permits geological studies, prospecting, and the extraction of raw hydrocarbon materials from the Black Sea’s Glubokaya block. Prior to Russia’s purported annexation of Crimea the Glubokaya block was estimated to hold reserves of 8.3 million tons of crude and 1.4 billion cubic meters of natural gas.

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