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[White & Case] US Expands Cyber-Related Sanctions Executive Order and Designates Russian Parties
 작성자 : 관리자
Date : 2017-01-09 23:36  |  Hit : 329  

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White & Case Ukraine News Update

On December 29, 2016, President Obama issued a new Executive Order (EO) entitled "Taking 

Additional Steps to Address the National Emergency with Respect to Significant Malicious 

Cyber-Enabled Activities."1

This new EO amends Executive Order 13694, originally issued on April 1, 2015,2 to expand cyber-related 

sanctions and, in an Annex, designates five Russian entities and four Russian individuals. These parties were 

determined to have tampered with, altered, or caused a misappropriation of information with the purpose or 

effect of interfering with or undermining election processes or institutions. They are deemed blocked and have 

been added to the US Department of the Treasury's Office of Foreign Assets Control's (OFAC) List of Specially 

Designated Nationals and Blocked Persons (SDN List).

OFAC also designated two Russian individuals pursuant to EO 13694 for using cyber-enabled means to cause 

misappropriation of funds and personal identifying information.

These new sanctions are accompanied by the release of a joint analysis report by the Federal Bureau of 

Investigation (FBI) and Department of Homeland Security (DHS) on Russian Malicious Cyber Activity.3 In 

addition, the US Department of State has declared thirty-five Russian diplomats and consular officials operating 

in the US persona non grata for acting in a manner inconsistent with their diplomatic or consular status, and has 

expelled them from the US. The State Department also informed the Russian Government that Russian 

personnel would be denied access to two recreational compounds in the US owned by the Russian 

Government.4

These measures follow actions by the US Department of Commerce's Bureau of Industry and Security (BIS) on 

December 27, 2016 designating twenty-three entities on the Entity List consistent with US sanctions against 

Russia.5 BIS also clarified its licensing policy with regard to exports and re-exports to Russia to clearly indicate 

a presumption of denial for applications to export items controlled for chemical/biological weapons, nuclear 

proliferation, and national security reasons. This is consistent with the measures taken by OFAC on December 

20, 2016 designating additional individuals, entities, and vessels under the Ukraine/Russia-related sanctions.6

 

New Executive Order Expands the Scope of Cyber Sanctions

As originally issued, EO 13694 authorizes blocking the property and interests in property located in the US or in 

the possession or control of a US Person7 of any person determined to be responsible for or complicit in, or to 

have engaged in, directly or indirectly, cyber-enabled activities originating from, or directed by persons located, 

in whole or in substantial part, outside the US that are reasonably likely to result in, or have materially 

contributed to, a significant threat to the national security, foreign policy, or economic health or financial 

stability of the US and that have the purpose or effect of:

  • Harming, or otherwise significantly compromising the provision of services by, a computer or network of
    computers that support one or more entities in a critical infrastructure sector;8
  • Significantly compromising the provision of services by one or more entities in a critical infrastructure
    sector;
  • Causing a significant disruption to the availability of a computer or network of computers; or
  • Causing a significant misappropriation of funds or economic resources, trade secrets, personal identifiers,
    or financial information for commercial or competitive advantage or private financial gain.

The new EO expands the scope of activity sanctionable under EO 13694 to include cyber-enabled activities that 

have the purpose or effect of tampering with, altering, or causing a misappropriation of information with the 

purpose or effect of interfering with or undermining election processes or institutions. President Obama has 

stated that the new EO "provides additional authority for responding to certain cyber activity that seeks to 

undermine our [US] election processes and institutions, or those of our allies and partners."9

The Annex to the new EO lists four individuals and five entities who have been designated on the SDN List 

pursuant to the authority provided by the new EO to designate individuals who have tampered with, altered, or 

caused a misappropriation of information with the purpose or effect of interfering with or undermining election 

processes or institutions.

EO 13694 additionally was used as a basis for the designation of two Russian individuals found to have used 

cyber-enabled means to cause misappropriation of funds and personal identifying information. These 

designations are described in greater detail below.10

Although the actions taken under EO 13694 and the new EO currently target Russian parties, the authority 

established in EO 13694 and the new EO can apply to persons wherever located.

 

Additions to the SDN List

OFAC designated a total of six individuals and five entities under the authority of EO 13694 (as amended) on 

December 29, 2016. For parties designated on the SDN List, all of their property and interests in property 

located in the US or within the possession or control of a US person, wherever located, are considered 

blocked and may not be dealt in. Any entity in which one or more blocked persons directly or indirectly 

holds a 50 percent or greater ownership interest in the aggregate is itself considered blocked by operation 

of law. US persons may not engage in any dealings, directly or indirectly, with blocked persons.

Designations Pursuant to the New EO

The individuals and entities listed in the Annex to the new EO that have been added to the SDN List are 

identified below:

Individuals:

ALEXSEYEV, Vladimir Stepanovich; DOB 24 Apr 1961; Passport 100115154 (Russia); First Deputy Chief of GRU

(individual) [CYBER2] (Linked To: MAIN INTELLIGENCE DIRECTORATE).

GIZUNOV, Sergey (a.k.a. GIZUNOV, Sergey Aleksandrovich); DOB 18 Oct 1956; Passport 4501712967 (Russia); 

Deputy Chief of GRU (individual) [CYBER2] (Linked To: MAIN INTELLIGENCE DIRECTORATE).

KOROBOV, Igor (a.k.a. KOROBOV, Igor Valentinovich); DOB 03 Aug 1956; nationality Russia; Passport 

100119726 (Russia); alt. Passport 100115101 (Russia); Chief of GRU (individual) [CYBER2] (Linked To: MAIN INTELLIGENCE DIRECTORATE).

KOSTYUKOV, Igor (a.k.a. KOSTYUKOV, Igor Olegovich); DOB 21 Feb 1961; Passport 100130896 (Russia); alt. Passport 100132253 (Russia); First Deputy Chief of GRU (individual) [CYBER2] (Linked To: MAIN 

INTELLIGENCE DIRECTORATE

Entities:

AUTONOMOUS NONCOMMERCIAL ORGANIZATION PROFESSIONAL ASSOCIATION OF DESIGNERS OF 

DATA PROCESSING SYSTEMS (a.k.a. ANO PO KSI), Prospekt Mira D 68, Str 1A, Moscow 129110, Russia; 

Dom 3, Lazurnaya Ulitsa, Solnechnogorskiy Raion, Andreyevka, Moscow Region 141551, Russia; 

Registration ID 1027739734098 (Russia); Tax ID No. 7702285945 (Russia) [CYBER2].

FEDERAL SECURITY SERVICE (a.k.a. FEDERALNAYA SLUZHBA BEZOPASNOSTI; a.k.a. FSB), Ulitsa 

Kuznetskiy Most, Dom 22, Moscow 107031, Russia; Lubyanskaya Ploschad, Dom 2, Moscow 107031, 

Russia [CYBER2].

MAIN INTELLIGENCE DIRECTORATE (a.k.a. GLAVNOE RAZVEDYVATEL'NOE UPRAVLENIE (Cyrillic: 

ГЛАВНОЕ РАЗВЕДЫВАТЕЛЬНОЕ УПРАВЛЕНИЕ); a.k.a. GRU; a.k.a. MAIN INTELLIGENCE DEPARTMENT),

Khoroshevskoye Shosse 76, Khodinka, Moscow, Russia; Ministry of Defence of the Russian Federation, 

Frunzenskaya nab., 22/2, Moscow 119160, Russia [CYBER2].

SPECIAL TECHNOLOGY CENTER (a.k.a. STC, LTD), Gzhatskaya 21 k2, St. Petersburg, Russia; 21-2 

Gzhatskaya Street, St. Petersburg, Russia; Website stc-spb.ru; Email Address stcspb1@mail.ru; Tax ID No. 

7802170553 (Russia) [CYBER2].

ZORSECURITY (f.k.a. ESAGE LAB; a.k.a. TSOR SECURITY), Luzhnetskaya Embankment 2/4, Building 17, 

Office 444, Moscow 119270, Russia; Registration ID 1127746601817 (Russia); Tax ID No. 7704813260 (Russia);

alt. Tax ID No. 7704010041 (Russia) [CYBER2].

Designations Pursuant to EO 13694

OFAC designated two other Russian individuals pursuant to EO 13694 for using cyber-enabled means to cause

misappropriation of funds and personal identifying information.

  • Evgeniy Mikhailovich Bogachev was designated for having engaged in significant malicious cyber-
    enabled misappropriation of financial information for private financial gain. OFAC stated that Bogachev
    was involved in malicious cyber-enabled activities utilizing the Zeus malware and Cryptolocker, a
    form of ransomware which OFAC indicates has held over 120,000 US victims’ data hostage for
    financial gain. OFAC stated that Bogachev is responsible for the theft of over $100 million from US
    financial institutions and government agencies. The designation on the SDN List is as follows:

o   BOGACHEV, Evgeniy Mikhaylovich (a.k.a. BOGACHEV, Evgeniy Mikhailovich; a.k.a. "Lastik";
a.k.a. "lucky12345"; a.k.a. "Monstr"; a.k.a. "Pollingsoon"; a.k.a. "Slavik"), Lermontova Str.,
120-101, Anapa, Russia; DOB 28 Oct 1983 (individual) [CYBER2].

·    Aleksey Alekseyevich Belan was designated for having engaged in the significant malicious cyber-

   enabled misappropriation of personal identifiers for private financial gain. OFAC stated that Belan 

   compromised the computer networks of at least three major US-based e-commerce companies to 

   steal user data belonging to approximately 200 million accounts worldwide and sold the stolen 

   information for private financial gain. The designation on the SDN List is as follows:

o   BELAN, Aleksey Alekseyevich (a.k.a. Abyr Valgov; a.k.a. BELAN, Aleksei; a.k.a. BELAN, 

    Aleksey Alexseyevich; a.k.a. BELAN, Alexsei; a.k.a. BELAN, Alexsey; a.k.a. "Abyrvaig"; 

    a.k.a. "Abyrvalg"; a.k.a. "Anthony Anthony"; a.k.a. "Fedyunya"; a.k.a. "M4G"; a.k.a. "Mag"; 

    a.k.a. "Mage"; a.k.a. "Magg"; a.k.a. "Moy.Yawik"; a.k.a. "Mrmagister"), 21 Karyakina St., 

    Apartment 205, Krasnodar, Russia; DOB 27 Jun 1987; POB Riga, Latvia; nationality Latvia; 

    Passport RU0313455106 (Russia); alt. Passport 0307609477 (Russia) (individual) [CYBER2].

 

BIS Entity List Designations and Licensing Policy Clarification

On December 27, 2016, BIS designated twenty-three entities on the Entity List. Fifteen of the entities were 

designated consistent with EO 1366111 for materially assisting or supporting the government of the Russian 

Federation or operating in the defense or related materiel sector in Russia. BIS also designated eight entities 

designated by OFAC on the SDN List12 under EO 1368513 for operations in the Crimea Region of Ukraine. A 

number of designations include subsidiaries of previously designated entities on the BIS Entity List, as the 

BIS Entity List restrictions do not otherwise apply to separately incorporated subsidiaries of foreign entities.

Entity List Designations Consistent with EO 13661

  • Seven subsidiaries of Almaz-Antey Air Defense Concern Main System Design Bureau, JSC, which was
    designated on the Entity List on September 17, 2014:
    • DJSC Factory Krasnoe Znamya;
    • FSUE FNPC Nizhegorodsky Scientific Research Institute of Radiotechnics (NNIIRT);
    • OAO All-Russia Research Institute of Radio Equipment (JSC VNIIRA);
    • JSC GOZ Obukhov Plant;
    • JSC Institute of Instrumentation—Novosibirsk Plant Comintern (NPO NIIP–NZIK);
    • OJSC Ural Production Company Vector (UPP Vector); and
    • Scientific and Production Association "Lianozovo Electromechanical Plant" (NPO LEMZ)
  • Eight subsidiaries of Joint-Stock Company Concern Radio-Electronic Technologies, which was designated
    on the Entity List on July 22, 2014:
    • ElTom Research and Production Company;
    • Ekran Scientific Research Institute, FSUE;
    • JSC Scientific Research Institute of Aircraft Equipment (NIIAO);
    • Kaluga Scientific Research Radio Technology Institute (KRRTI);
    • Research and Production Association KVANT;
    • Research and Production Association M.V. Frunze;
    • Ryazan State Instrument Enterprise (RSIE); and
    • Svyaz Design Bureau, OJSC
  • Entity List Designations Consistent with EO 13685
    • Crimean Ports;
    • Crimean Railway;
    • Institut Stroiproekt, AO;
    • Karst, OOO;
    • LLC Ruschemtrade;
    • OLID Ltd.;
    • Trans-Flot JSC; and
    • Transpetrochart Co. Ltd.

Designation on the Entity List imposes a license requirement for the export, re-export or foreign transfer of items

subject to the Export Administration Regulations to the designated entities, with a presumption of denial. This 

includes most US-origin products, as well as some non-US made items that incorporate greater than de 

minimis US-origin content and items that are the direct product of certain US-origin technology.

This action was supplemented by a clarification by BIS that license applications for export or re-export to 

Russia of items controlled for chemical or biological weapons, nuclear proliferation, or for national security 

reasons will be reviewed under a presumption of denial if the items would make a direct and significant 

contribution to Russia’s military capabilities.

This policy affects not only US businesses engaged in exports to Russia, but also non-US companies 

engaged in exports to Russia from third countries of products that are of US-origin and that require BIS 

licenses. This can include products with US-origin content or made as the direct product of US-origin 

technology.

Companies should monitor closely any measures imposed by the US to ensure compliance. Penalties for 

noncompliance can be severe.

 

Click here to download PDF.

 

1 See the new Executive Order here.
2 See EO 13694 as originally issued
here.
3 See DHS and FBI Report
here.
4 See State Department Press Release
here.
5 See Federal Register Notice
here.
6 For additional information on these designations see our Client Alert
here.
7 A US Person is defined to include any US citizen, permanent resident alien, entity organized under the laws 

of the US or any jurisdiction within the US (including foreign branches), or any person in the United States.
8 The term "critical infrastructure sector" means any of the designated critical infrastructure sectors identified 

in Presidential Policy Directive 21.
9 White House Press Release. "Statement by the President on Actions in Response to Russian Malicious 

Cyber Activity and Harassment." (Dec. 29, 2016). See text here.
10 White House Press Release. "FACT SHEET: Actions in Response to Russian Malicious Cyber Activity and 

Harassment." (Dec. 29, 2016). See text here.
11 See Executive Order 13661
here; our previous Client Alert on EO 13661 is available here.
12 See our Client Alert on the December 20 OFAC designations
here.
13 See Executive Order 13685
here; our previous Client Alert on EO 13685 is available here.

 

This publication is provided for your convenience and does not constitute legal advice. This publication is 

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