U.S. Imposes Trade Restrictions on Eastern Ukraine


In the first of what could be multiple waves of sanctions and export controls, the White House imposed new sanctions barring trade, financing, and new investments in eastern Ukraine.  The action comes in response to Russia’s decision to formally recognize the independence of two regions in Donbas, Ukraine.

In response to formal appeals from leaders in Donetsk and Luhansk seeing sovereign recognition, Russian President Vladimir Putin delivered a televised address on Monday, saying that it is “necessary to take a long overdue decision to immediately recognize the independence and sovereignty of the Donetsk People’s Republic and the Luhansk People’s Republic.”  Immediately following the address, Putin sent peacekeeping troops to the regions to offer “friendship and mutual assistance” to the “historically Russian territory.”

Within hours of the televised speech, President Biden signed the Executive Order which prohibits the following:

  • Import of any goods, services, or technology – directly or indirectly – from the Donetsk (DNR) and Luhansk (LNR) regions to the U.S.
  • Export, reexport, sale, or supply of goods, services, or technologies – directly or indirectly – from the U.S. to these regions
  • New investments in the DNR and LNR regions by a U.S. person
  • Approving, financing, facilitating, or guaranteeing transactions of a foreign person covered by the above prohibitions by a U.S. person

The executive order also grants authority to impose sanctions on any person determined to be:

  1. a person operating in these regions since February 21
  2. a leader, official, senior executive officer, or member of the board of directors of an entity operating in these regions since February 21
  3. an entity owned or controlled by, or have acted or purported to act for or on behalf of – directly or indirectly – any person whose property or interests in property are blocked pursuant to this executive order
  4. an individual who has assisted, sponsored, or provided goods or services to or financial, material, or technological support for any person whose property or interests in property are blocked pursuant to the executive order

Similar restrictions may also be imposed on other regions of Ukraine if tensions escalate.

The Russian Foreign Affairs Ministry said there will be a “strong response” to the sanctions, “not necessarily a symmetrical one, but measured and considerable for the American side.”

NATO Members and Allies Announce Tough Response on Russia and Separatist Regions of Ukraine

In a united front, the European Union, United Kingdom, Australia, and Japan joined the U.S. in announcing sanction plans targeting Russia and the separatist DNR and LNR regions of Ukraine.

The EU has announced plans to ban trade with the DNR and LNR regions, impose financial sanctions on banks that contribute to the destabilization of Ukraine or finance Russian military apparatus, and implement measures to restrain Russian efforts to raise capital in EU financial markets.  Germany has also announced it will halt the process of certifying the Nord Stream 2 gas pipeline from Russia.

While the UK has so far only imposed sanctions on five Russian banks, they are prepared to impose further sanctions targeting the Russian trade and financial sectors in the event of further aggressive acts by Russia.

Both Australia and Japan are prepared to announce swift and severe sanctions that would target Russian individuals and entities responsible for undermining Ukraine’s territorial integrity and sovereignty, including banning trade and travel, financial sanctions, and freezing assets.