US sanctions Hong Kong companies for alleged support of Russian 'war economy' – JURIST

The US Treasury Department on Wednesday sanctioned Hong Kong companies under Executive Order (EO) 14024, in response to these companies' alleged support of the Russian economy amid the war in Ukraine. This comes after the United States unveiled nearly 300 sanctions on May 1, including sanctions targeting Hong Kong entities for supporting Russia.

Wednesday's sanctions were imposed on Hong Kong-based companies including GBL International Logistics Co Ltd (GBL), Tavit Hong Kong Co Limited (Tavit), Holden International Trading Limited (Holden), Taube Precious HK Limited (Taube) and VPower Finance Security Hong Kong. Limited (VPower). GBL and Tavit have been designated to operate in the manufacturing and technology sectors of the Russian economy respectively. The director of Tavit is a Russian national. Holden, Taube and VPower have been appointed to operate in the metals and mining sector in Russia. The Treasury said Holden and Taube were used in a laundering scheme by a U.S.-designated Russian gold producer and its Hong Kong-based associate “to funnel payments related to gold sales through institutions foreign financial services to the Russian financial system”, and VPower was used to transport gold from Russia. All property of designated persons located, controlled, or owned by the United States is blocked.

According to Treasury, the sanctions target individuals and entities in Russia and abroad that enable Russia to “support its war effort and evade sanctions.” The Treasury also said that “foreign financial institutions that support Russia's war economy are at greater risk of sanctions.”

Treasury Secretary Janet L. Yellen said:

Russia's war economy is deeply isolated from the international financial system, leaving the Kremlin's military desperate for access to the outside world… Today's actions undermine their last material supply options and international equipment, including their dependence on essential supplies from third countries. We increase risk for financial institutions servicing Russia's war economy, eliminate escape routes, and reduce Russia's ability to benefit from access to IT technologies, equipment, software () and services foreigners.

On May 23, Russian President Vladimir Putin signed Executive Order No. 422 authorizing Russia to seize U.S. assets to compensate for damages resulting from the seizure of Russian assets in the United States. This was a response to the United States' enactment of the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act, which took effect April 24 and gives the U.S. president the power to “seize , confiscate, transfer () or delegate” any Russian sovereign state. active in the United States. On May 17, the U.S. Treasury sanctioned two Russian individuals and three Russian companies for the transfer of weapons between Russia and North Korea, including ballistic missiles for use in Ukraine. This was a continuation of previous actions taken by the Treasury and the State Department against the transfer and testing of ballistic missiles used in Ukraine.