Trade Curb on Crimea-Based Oil Company Adds to Pressure

The U.S. Commerce Department has taken steps to keep American exporters from shipping goods to a company based in Ukraine’s occupied Crimea region, further curbing trade with Russia in the biggest standoff between the Cold War adversaries in decades.

The agency’s Bureau of Industry and Security said today that it placed the oil and gas company Chernomorneftegaz on its “Entity List,” which requires U.S. exporters to have a special license to ship goods to the foreign recipient.

The move “sends a strong message of the United States government’s condemnation of Russia’s incursion into Ukraine and expropriation of Ukrainian assets,” Under Secretary of Commerce Eric Hirschhorn said in a statement.

President Barack Obama’s administration has moved to punish Russia after it annexed Crimea last month, including limiting travel and freezing the assets of some people and putting a hold on the processing of permits for exports that may have a military use. The Commerce Department’s action today indicates that the White House is willing to impose limits on companies that operate in the occupied region, as well as in Russia proper.

Those “who have asserted governmental authority in the Crimean region without the authorization of the government of Ukraine threaten the national security and foreign policy of the United States,” the Commerce Department said.

Treasury Sanctions

Chernomorneftegaz, also known as Chornomornaftogaz and NJSC Chornomornaftogaz, is a regional oil and gas company in Crimea and a subsidiary of the Ukrainian company Naftogaz, the Commerce Department said. Its assets were seized by the Crimean parliament and are now being overseen by Russian government interests, according to the department.

The U.S. Treasury Department today also imposed sanctions on Chernomorneftegaz, six Crimean separatist leaders and a former Ukrainian official. The U.S. moves apply only to the Crimean entity and don’t include the parent company.

The individuals helped to undermine democracy in Ukraine, and the company, which has drilling rigs in the Black Sea and the Sea of Azov, was complicit in misappropriating Ukraine’s state assets, according to a Treasury Department statement.

“Crimea is occupied territory,” David Cohen, the department’s under secretary for terrorism and financial intelligence, said in the statement.

Crimea, home to Russia’s Black Sea fleet, voted March 16 to join Russia, as Russian troops maintained a visible presence in the territory. The Obama administration hasn’t accepted the annexation.

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