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U.S. Sanctions Russia's United Shipbuilding Corporation

Arktika
Courtesy USC / Baltic Shipyard

Published Apr 7, 2022 11:10 PM by The Maritime Executive

The United States Treasury has redesignated Russia's United Shipbuilding Corporation and its many shipyard subsidiaries on the department's Specially Designated Nationals list. The move prohibits USC from accessing the U.S. financial system or transacting with American companies, and it is intended to slow Russia's ability to build and service naval warships. 

The newly-designated companies include Almaz Central Marine Design Bureau, best known as the designer of the unique Bora-class hoverborne missile corvette. The Treasury also designated Baltic Shipyard, the builder of Russia's new Akademik Lomonosov class of floating nuclear power stations, as well as the Arktika-class nuclear-powered icebreaker. Other USC divisions sanctioned include Admiralty Shipyard, which produces nuclear-powered and diesel-electric submarines, and Zvezdochka, USC's ship repair division. Eight USC board members were also added to the SDN list. 

Most leading European engine and marine equipment OEMs have already ceased providing service and parts to the Russian market, preempting further business disruption from sanctions on Russia's main shipyards.

“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. “These actions . . . reflect our continued effort to restrict the Kremlin’s access to assets, resources, and sectors of the economy that are essential to supplying and financing Putin’s brutality.”

The new sanctions were announced in concert with a new package of EU restrictions on trade with Russia, including a gradual four-month phaseout of Russian coal imports. The wind-down period was initially set at three months, but the measure was softened at the request of the government of Germany. Officials involved in the negotiations told the New York Times that a proposed port ban on Russian ships would be limited to Russian-flagged ships only, not all Russian-owned ships, after a request from three EU nations in the Mediterranean region.