Sweeping US sanctions target Russian energy production

By Daphne Psaledakis (Reuters), Timothy Gardner (Reuters), Simon Lewis (Reuters) - December 13, 2023
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Novatek’s Yamal LNG facility in the Russian Arctic (Photo: Novatek)

WASHINGTON—The United States on Tuesday imposed sanctions on hundreds of people and entities, including in China, Turkey and the United Arab Emirates, as it targets Russia’s sanctions evasion, future energy capabilities, banks and its metals and mining sector.

The US Treasury and State departments targeted more than 250 individuals and entities in Washington’s latest action attempting to crack down on Russia and its evasion of sanctions imposed by the US and its allies over the war in Ukraine.

“We will continue to use the tools at our disposal to promote accountability for Russia’s crimes in Ukraine and those who finance and support Russia’s war machine,” US Secretary of State Antony Blinken said in a statement.

The Treasury said it imposed sanctions on a network of four entities and nine people based in China, Russia, Hong Kong and Pakistan over the facilitation and procurement of Chinese-manufactured weapons and technologies to Russia.

It said the network sought to circumvent US sanctions and Chinese controls on the export of military-related materials.

It also targeted Turkey, United Arab Emirates and China-based companies over the shipment of technology, equipment and inputs, including ball or roller bearings, aircraft parts and X-ray systems.

The China-based firms targeted included commercial satellite imagery companies that Treasury said provided high-resolution observation imagery to Russian mercenary firm Wagner.

The State Department also targeted Chinese entities in an action against a network it said was involved in procuring microelectronic components for Russian state conglomerate Rostec, which itself is under US sanctions.

It said the microelectronics were being used to develop electronic warfare systems. Companies in Russia, Turkey and Hong Kong were also targeted as part of action against the network.

Washington has stepped up diplomatic pressure on countries and private companies globally to ensure enforcement of the sanctions it, the European Union and other Western nations have imposed on Moscow over its invasion of Ukraine.

“The anti-Russian steps announced today … are nothing more than an attempt to put a good face on a bad game,” Russia’s envoy to the United States, Anatoly Antonov, said in comments posted on the Russian embassy Telegram messaging app. “Nothing will help Zelenskiy. But the Americans risk getting even more bogged down in the quagmire of the Ukrainian conflict.”

Liu Pengyu, spokesperson for the Chinese embassy in Washington, said China regulates military and dual-use exports responsibly and opposes the United States’ use of sanctions, which he called “unilateral” and “illegal.”

“We firmly oppose the US side sanctioning relevant companies under groundless pretext,” Liu said in an emailed response to questions about Tuesday’s sanctions.

UAE’s embassy did not immediately respond to a request for comment. Its foreign ministry did not immediately reply to a request outside usual working hours.

A Turkish official, speaking on condition of anonymity, told Reuters that while Turkey only imposed sanctions endorsed by the United Nations Security Council and opposed unilateral measures, Ankara took measures to minimize any circumvention of sanctions.

“Strict monitoring and prevention of efforts to skirt sanctions through Turkey is an integral part of our non-abidance policy,” the official said, and added the Turkish financial and commercial sector dealt primarily with Western markets.

“Inevitably, there are evasion attempts by obscure and insignificant entities that are uneducated about or indifferent to sanctions,” the person said. “Such entities will unavoidably incur the consequences of unilateral restrictive measures.”

Turkish authorities are taking regulatory actions if the circumventions amount to a pattern breaching Turkey’s policy, the official told Reuters.

FUTURE ENERGY
The US targeted three companies developing the Ust-Luga liquefied natural gas (LNG) terminal, a facility at a Baltic seaport in northwest Russia to be operated by Gazprom and RusGazDobycha.

The yet-to-be-built complex is part of Gazprom’s strategy to shift focus to processing and is poised to become Russia’s largest gas processing plant, and one of the world’s largest in terms of production volumes.

The sanctions were put on Russian-based companies Limited Liability Company Northern Technologies, Joint Stock Company Kazan Compressor Machinery Plant, and Limited Liability Company Gazprom Linde Engineering.

Washington is seeking to interfere with Russia’s future energy production and fuel export capacity. The move came a little over a month after Washington put sanctions on an entity developing another LNG project, Arctic-2 LNG in Siberia.

It was not immediately clear how Russia’s future LNG exports would be affected. The US is the world’s largest LNG exporter. German company Linde stopped work at Ust-Luga in 2022 due to Western sanctions. This year Russia has been talking with China to involve Chinese companies in construction of the plant.

Gazprom did not immediately reply to a request for comment.

The State Department also targeted Russian businessman Vladislav Sviblov and Highland Gold Mining Ltd, a UK-registered company owned and controlled by him that it said is Russia’s seventh-largest gold producer, as well as other companies connected to Sviblov following action Britain took in November.

A representative for Sviblov declined to comment.

The State Department also designated three shipping companies and three Russian-flagged commercial vessels it said have been used to transfer munitions between North Korea and Russia.

North Korea’s mission to the United Nations in New York did not immediately reply to a request for comment.

Washington also targeted four Russian financial institutions – including Expobank, the proposed buyer of HSBC’s Russian business – and dozens of Russia-based entities involved in the import, production, modification and sale of defense-related and industrial technology, including drones.

The State Department also listed former telecoms CEO Ivan Tavrin and a network of companies he runs. It said Tavrin “has become one of Russia’s biggest wartime dealmakers since the beginning of Russia’s illegal war against Ukraine.”

A representative for Kismet, owned by Tavrin, did not immediately respond to a request for comment on the sanctions. New Towers, one of the companies in Tavrin’s empire, declined to comment.

Reporting by Daphne Psaledakis, Simon Lewis, Timothy Gardner, Michael Martina, Susan Heavey and Doina Chiacu in Washington, Vladimir Soldatkin in Moscow, Alexander Marrow in London, Maha El Dahan in Dubai, Tuvan Gumrukcu in Ankara and Lidia Kelly in Melbourne; Editing by Daniel Wallis and Gerry Doyle