Sanctions Watch

Roundup: May 16 - May 30, 2023

May 31, 2023

 The G7 meeting highlighted efforts to increase pressure on Russia while attempting to bring members into alignment with respect to China policy. Congressional focus with respect to China continues with activity likely to increase around the National Defense Authorization Act (NDAA) and appropriations processes.


Russia continued to be the epicenter of the Biden Administration’s sanctions efforts, particularly in advance of the G7 meeting during the reporting period, including its support for the oil cap. In coordination with other G7 members, the State Department, Treasury Department, and Department of Commerce imposed sanctions or restrictions on over 300 individuals and entities to hit multiple sanctions evasion networks. Treasury also expanded sectoral prohibitions and sanctionable conduct to target the architecture, engineering, construction, manufacturing, and transportation sectors of the Russian economy. Other such sanctions authorities include metals and mining, quantum computing, accounting, trust and corporate formation, management consulting, aerospace, marine, electronics, financial services, technology, and defense and related materiel sectors of the Russian Federation economy. Commerce also imposed tariffs on electronics, instruments, and composite materials. Multilaterally, the U.S., its allies and partners continue to focus on the international diamond and gold trade with Russia. 

Sanctions designations in other areas relevant to Russia continued apace. During the reporting period, the Treasury Department also designated the principal administrator of the Wagner Group, a private military company, for supporting their operations in Mali, and a Russian national for ransomware attacks against police, business, and critical infrastructure in the U.S. 

The Russian government is reportedly leveraging its defense and energy agreements with India to pressure that government to help block international economic measures aimed at isolating Russia, including any effort by the Financial Action Task Force to add Russia to its black or gray list. It was also reported that the Russian government ended plans to create a state-owned cryptocurrency exchange, planning instead to set rules and regulations for already existing enterprises.  


The G7 Summit also saw a considerable amount of activity and focus related to China. The G7 announced the creation of the Coordination Platform on Economic Coercion to “increase our collective assessment, preparedness, deterrence and response to economic coercion, and further promote cooperation with partners beyond the G7.” While the U.S. and E.U. continue to develop closer coordination mechanisms within the G7 through the U.S.-E.U. Trade and Technology Council, the E.U. is still reluctant to specifically mention China in official documents. 

The Chinese government has imposed sanctions on the U.S. firm Micron Technology and directed Chinese companies to stop buying products from Micron Technology, which was met with a rebuke from the Administration. Reports emerged that Apple, General Electric, Ford, Boeing, Nike, Walt Disney, and Starbucks are facing mounting stakeholder pressure to rethink their supply chains related to China. Additionally, the Department of Justice unveiled a series of criminal cases tracing the illegal flow of sensitive technology foreign adversaries including China. 

Efforts by the Department of Defense to meet with their Chinese counterparts have been stymied by the designation of China’s Minister of Defense. The Chinese have argued that the Secretary of Defense and Minister of Defense would not be on equal levels if the sanctions designation remains in place.  


Given revelations during the reporting period of increased weapons-related traffic between Iran and Russia, expect the U.S. and E.U. sanctions efforts to enhance their focus on Caspian-related trade, particularly as Russia attempts to rearm. The E.U. Council imposed sanctions against several individuals and the Islamic Revolutionary Guard Corps. (IRGC) Cooperative Foundation for human rights violations in Iran, while the Department of Justice filed charges against a Chinese national for conspiring to provide weapons of mass destruction-related materials to Iran. However, the most significant event to watch for is a prospective interim or limited arrangement with Iran. According to reports, talks between Iran and the U.S. on the release of Tehran’s frozen assets could result in a deal soon in exchange for arms control limitations and U.S. detainees in Iran. Iraqi banks may release $10 billion, and South Korean banks as much as $7 billion in frozen funds.


In response to increasing violence, the U.S. warned rival Sudanese factions that a continuation in fighting would result in additional sanctions designations. The U.S. warnings, combined with multilateral cooperation, has largely resulted in a quieting of the situation. This came after the Treasury Department amended its South Sudan Sanctions Regulations to implement EO 13664 expanding Sudan sanctions to deal with the recent violence. 

North Korea

North Korea reportedly launched its satellite that the Biden Administration says will violate U.S. and international sanctions. In the interim, the Administration continues to focus on North Korean crypto and cyber operations. The Biden Administration sanctioned a network involved in North Korean cyber operations, and promotion of North Korean expatriate labor. During the reporting period, Binance noted that it helped U.S. law enforcement agencies seize $4.4 million in crypto assets connected to North Korean cybercrime organizations. Finally, during the reporting period, the Department of Commerce imposed a 10-year export privilege ban on Ethereum developer Virgil Griffith.


In a high-profile report, the House Select Committee on the Chinese Communist Party called for additional sanctions and restrictive measures against the CCP, including reducing the de minimis threshold for the rebuttable presumption of goods manufactured in areas like Xinjiang, imposing sanctions on Chinese technology companies, and restricting outbound U.S. investments in critical technology sectors in China. With respect to the latter recommendation, the Chairman of the House Financial Services Committee sent a letter to the Administration with concerns about the Administration’s rumored approach to outbound investment screening.  

Some in Congress also called for trade restrictions on Chinese chip maker Changxin Memory Technologies after China’s decision to restrict Micron chips from China and for the imposition of sanctions on 29 Hong Kong national security judges. 

The focus on fentanyl-related sanctions measures continued (see April 22-May 16 Roundup)), with the House Foreign Affairs Committee advancing two sanctions measures targeting the narcotics trade with a focus on China. This is an area that will likely continue to expand with multiple provisions being inserted into the NDAA and/or appropriations legislation.  


The House Energy and Commerce Committee approved by 29-21 vote the Prohibiting Russian Uranium Imports Act, which prohibits the importation of such materials into the U.S. Russia also issued an arrest warrant for Sen. Lindsey Graham (R-SC) during the reporting period as well.  

In the aftermath of the G7 meeting, and with the Congress getting back to work after the debt ceiling deal, expect a flurry of activity related to the NDAA and appropriations processes on a range of sanctions-related issues.


  • Fentanyl sanctions legislation with a China nexus; 
  • Enhancements to Uyghur-related sanctions and restrictive measures; 
  • Iran-related sanctions targeting their ballistic missile programs and conventional arms trade.