US Launches Sweeping Sanctions on Russian Economy Including Arctic LNG 2

 

Timed to coincide with tomorrow’s celebration of Ukrainian Independence Day and to support the G7 initiatives, the United States today announced one of its broadest and most comprehensive sanction packages targeting the Russian economy and companies ranging from China to the Middle East that are aiding the Russian efforts. The effort was coordinated by the Biden Administration, the State Department, and the Department of Treasuring, targeting nearly 400 individuals and entities both in Russia and outside its borders which the U.S. contends are enabling Russia to sustain its war effort and evade sanctions. 

“Treasury’s actions today continue to implement the commitments made by President Biden and his G7 counterparts to disrupt Russia’s military-industrial base supply chains and payment channels,” said Deputy Secretary of the Treasury Wally Adeyemo. “Companies, financial institutions, and governments around the world need to ensure they are not supporting Russia’s military-industrial supply chains.”

One of the key targets was aimed at disrupting Russia’s future energy production and exports, including specifically LNG from the Arctic LNG 2 project. The effort designates multiple companies related to Arctic LNG 2 including the LNG tankers used to transport the products. The U.S. points out the project is facing a critical shortage of vessels forcing it to resort to tactics similar to those used with the crude oil exports. The U.S. also targeted Arctic LNG 2 with sanctions in September 2023.

The sanctions cite specific examples of LNG carriers in recent weeks using deceptive practices such as shutting off AIS transmissions and providing false locations. They note that commercial satellite images showed the vessels loading LNG and as such the vessels are being added to the sanction designations. Three vessels from a company called Ocean Speedstar Solutions were designated as well as four newbuilds that the U.S. contends were acquired by a shell company to obfuscate ownership to eventually avoid EU sanctions and expand the Arctic LNG 2 exports. A UAE-based company called White Fox Ship Management was designated with four vessels.

The sanctions also include a Russia-based construction project management company, a UAE-based company providing parts, and 10 companies involved in pipeline development for Russia’s Vostok Oil project. It also lists companies involved in the development of LNG production and export from the Yakutia region to China. 

Novatek China Holdings, a Chinese company set up a year ago is also being designated. Treasure reports it is involved in the implementation of marketing programs for the LNG from Arctic LNG 2. They also included a Russian company responsible for the infrastructure for the first LPG shipment from the Far East Sovestskaya Gavan port. The effort even includes a Turkish shipping agent that supported a previously sanctioned vessel. A Panama-based company Jiang Ping Shipping that facilitated a ship-to-ship transfer with a blocked Sovcomflot tanker was also listed.

Chinese companies, 42 by Reuters’ count with more than 20 in Hong Kong, figure heavily in the sanctions. Treasury contends many of the companies are supplying Russia’s military-industrial base.

U.S. officials emphasized the commitment to disrupting all elements of the Russian economy used to support the military operations. The sanctions reach across the technology, metals and mining, financial, military procurement, Chinese-based companies, fighter jet supply network, and more. They are also targeting companies and individuals who are helping Russia to avoid the previous sanctions. 

China has not commented on its inclusion in today’s sanctions. In the past, they have been critical of the U.S. for interfering with what they call normal trade between China and Russia.