The Treasury Department’s Office of Foreign Assets Control (OFAC) on Tuesday designated one of the world’s largest steel-producing companies as part of its latest round of sanctions against Russia in response to the country’s invasion of Ukraine.
Magnitogorsk Iron and Steel Works (MMK) and its majority owner and board chairman, Viktor Filippovich Rashnikov, were designated pursuant to Executive Order 14024 for “operating or having operated in the financial services sector of the Russian Federation economy.” MMK ranked among the top 50 steel-producing companies globally in 2021 and is regarded as one of Russia’s largest taxpayers, according to OFAC.
Also designated were MMK subsidiaries MMK-FINANS and MMK Metalurji, the latter of which is located in Turkey.
The actions taken by OFAC serve as a reminder of the still-evolving U.S. sanctions landscape despite Russia first invading Ukraine more than five months ago. Initial restrictions prioritized hamstringing the Russian economy while also limiting the country’s elites in transferring their assets.
Of note in Tuesday’s announcement, Russian financial institution JSC PPIT was designated for its alleged role in a sanctions evasion scheme. The deputy chief executive officer of the Russian Direct Investment Fund in February indicated plans to transfer all assets and cash from the RDIF to JSC PPIT in anticipation of the former being sanctioned. JSC PPIT was designated for helping facilitate that action, OFAC stated.
Another noteworthy designation included Alina Maratovna Kabaeva, Russian President Vladimir Putin’s rumored girlfriend.
Regarding MMK, OFAC issued a series of deadlines for entities to cease business with the steel producer. Transactions necessary to wind down involvement with MMK must be completed by Sept. 1, while divestment or transfer of MMK debt or equity and wind down of related derivative contracts is authorized through Oct. 3. Transactions involving MMK Metalurji must be completed by Jan. 31, 2023.
The Department of State also announced a series of Russia-related restrictions Tuesday, including the designation of the largest transportation leasing company in Russia, JSC GTLK, and more than a dozen entities operating in the country’s technology and electronics sectors.