Last week saw further activity expanding US sectoral sanctions against Russian industry. The sanctions against Russia, developed as a reaction to the invasion of Crimea, differ from other American sanctions in that they target specific sectors of the Russia economy. We see the Russian sanctions as a test case to see if such sectoral sanctions work and if they represent a new generation of “smart sanctions”. So far, the jury is out.

This week’s sanctions were imposed by the Bureau of Industry and Security (BIS), amending the Export Administration Regulations (EAR), barring exports, re-exports, and transfers of its subject to EAR to the Yuzhno-Kirinskoye oil and gas field – a Gazprom project. License applications submitted to BIS will be reviewed with a presumption of denial.

This action was taken immediately after the addition of more people and companies to the Russian sanctions list, including affiliates of the Rosneft oil company and organizations tied to major Russian banks.