Updated as of February 25, 2022

Key Takeaways

  • On February 21, 2022, the White House issued a new Executive Order (EO) that imposes comprehensive sanctions on the Donetsk People’s Republic (DNR) and Luhansk People’s Republic (LNR) regions of Ukraine (collectively the “Covered Regions”). These sanctions appear to be modelled on those imposed on Crimea since late 2014 under Executive Order 13685 (EO 13685).
  • In parallel, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) published six general licenses (GLs) authorizing certain transactions involving the Covered Regions.
  • The EU has also announced similar measures with respect to those breakaway regions.
  • In parallel, the Allies (U.S., Canada, EU, UK, South Korea, Japan, Australia and New-Zealand) have also taken broad sanctions against Russia in response to the invasion of Ukraine, as further detailed here and here.

U.S. Comprehensive Sanctions Against the DNR and the LNR

Scope: the DNR and LNR

The new EO does not detail which parts of the Donetsk and Luhansk regions[1] are subject to the new U.S. sanctions. It is likely that the U.S. Treasury and State Departments will clarify further the scope of the Covered Regions targeted by the sanctions in public guidance to be issued by OFAC.


Under the new sanctions, U.S. persons[2] are prohibited to:

  • Export, reexport, sell, or supply, directly or indirectly, any goods, services, or technology to the Covered Regions;
  • Engage in new investments in the Covered Regions;
  • Import into the United States any goods, services, or technology from the Covered Regions; and
  • Provide any approval, financing, facilitation, or guarantee of a transaction by a non-US party where the transaction would be prohibited if performed by a US Person with respect to the Covered Regions.[3]

SDN Designations

The new EO also provides authority for OFAC to designate parties that operate in the Covered Regions or provide material support to SDNs designated pursuant to the new Order.[4]

General Licenses

OFAC issued a number of GLs on February 21 for the Covered Regions, as follows:

  • Ukraine GL 17 to allow a wind-down of operations and contracts involving the DNR and LNR by March 23, 2022;
  • Ukraine GL 18 for the export to the Covered Regions of food, medicine and medical devices and transactions related to the COVID-19 pandemic;
  • Ukraine GL 21 to ensure personal remittances can continue to flow and the operation of bank accounts;
  • Ukraine GL 19 to allow telecommunications and mail services to continue ;
  • Ukraine GL 22 for internet services to remain operational; and
  • Ukraine GL 20 to allow international organizations (e.g., United Nations, certain international development banks, Organization for Co-operation and Security in Europe) to engage in activities related to the Covered Regions.

Further Export Restrictions

On February 24, 2022, BIS has imposed a comprehensive export, reexport and transfer (in-country) restrictions for the Donetsk and Luhansk regions of Ukraine similar to the restrictions already in place for the Crimea Region of Ukraine.[5]

The new rules expand the territorial reach of the EAR’s Crimea embargo to apply to the DNR and LNR. The rules prohibit the export, re-export, or transfer of goods, software, or technology subject to the EAR to the embargoed regions, with limited exceptions.

License applications related to exports to the embargoed regions are subject to a policy of denial.

EU Restrictions on Economic Relations with the DNR and the LNR

On February 23, 2022, the EU has introduced the following restrictions with respect to the breakaway areas of Donetsk and Luhansk:[6]

  • An import ban on goods from the non-government controlled areas of the Donetsk and Luhansk;
  • A prohibition on certain investment in the regions, including the purchase of land, the purchase of shares and securities of entities in the regions, entering into financing and joint venture agreements with entities in the regions, and the provision of investment services related to these activities;
  • An export ban for goods and technologies suited to the transport, telecommunications, energy or oil, gas and mineral sectors;
  • A ban on the provision of technical assistance, brokering, construction or engineering services to infrastructure in the regions and within the aforementioned sectors; and
  • A prohibition to supply tourism services.

Those new restrictions only apply to the “non-government controlled areas of the Donetsk and Luhansk oblasts of Ukraine”, signifying that trade with areas under Ukrainian government control is not affected.

We will closely monitor activity around the Russia-Ukraine war and provide ongoing updates at our blog here.


[1]       The DNR and LNR represent approximately 30% of the larger Donetsk and Luhansk regions of Ukraine

[2]       Any United States citizen, lawful permanent resident, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.

[3]       Section 1(a) of the EO.

[4]       Section 2(a) of the EO.

[5]       See 15 C.F.R. § 746.6.

[6]       See Council Decision (CFSP) 2022/266 & Council Regulation (EU) 2022/263.