US and UK sanction dozens of Russia-linked energy, shipping firms

The US and UK on May 19 sanctioned dozens of Russia-linked companies in the energy and shipping sectors, including some associated with Arctic transportation and state-owned nuclear power company Rosatom, with the aim of undermining the country's ability of manufacturing weapons and generating income via selling energy products and other means.

The moves have come as G7 leaders are holding a summit in Hiroshima, Japan, to discuss how to support Ukraine and ramp up pressure on Russia through additional sanctions measures while the EU finalize its 11th sanctions package. The summit runs May 19-21.

In their latest round of sanctions, US officials said the State, Commerce and Treasury departments were targeting those who supported Russia's future energy revenue sources, maintained its war chest and helped the country evade sanctions.

Among those blacklisted by the State Department, 18 were involved in expanding Russia's energy production and export capacity across a range of industries, including shipbuilding, dredging and engineering.

Federal State Unitary Enterprise Hydrographic Company, a wholly owned subsidiary of Rosatom that provided dredging services to the Vostok Oil project in the Arctic region, was sanctioned along with four associated ships.

Separately, the UK Foreign Office sanctioned nine organizations linked to Rosatom, including UMATEX, a producer of carbon fiber-based composite materials that could be used for military purposes. The sanctions are designed to ramp up pressure on Russia's remaining revenue and attempt to use Rosatom to support its "military machine," the Foreign Office said.

Separately, the State Department sanctioned rig services provider Inkomneft, shipbuilder Samusskiy Sudostroitelno Sudoremontniy Zavod, which has constructed up to 10 vessels for Arctic shipping, and five companies involved in developing the Arctic port of Indiga.

With its traditional European buyers look to alternative sources, Russia has aimed to increase the transit goods volume via the Northern Sea Route to 83 million mt in 2024 from 32.3 million mt last year.

'Grain theft'

Separately, the State Department sanctioned Polimetall, the Russian holding company for a major gold and silver producer, and several entities for alleged grain theft from Ukraine.

"Russian state-owned and private enterprises continue to engage in the systematic theft of Ukraine's resources, to include grain," the State Department said in a statement. "The Department is designating a network of Russian entities that use shell companies, falsified documents, and maritime evasion techniques to obfuscate the Ukrainian origin of grain exports and falsely label them as originating from Russia."

Both the US and UK targeted Pawell Shipping, the registered owner of the Syria-flagged, 3,042-dwt general cargo ship Pawell that was allegedly transporting such Ukraine-origin grain.

Having signed a safe corridor deal to allow Ukraine to export grain and other foodstuff from the Black Sea, which was just renewed May 17, Russia has made repeated complaints that it faces trade obstacles to its own grain exports.

Russia's agricultural exports from Black Sea ports reached 3.6 million mt in April, according to S&P Global Commodities at Sea. Ukraine's amounted to 2.7 million mt.

Shipping firms

Following the EU's footstep, the UK Foreign Office sanctioned Sun Ship Management for its connection to Sovcomflot, Russia's largest state-owned tanker company.

The Dubai-based company manages 86 tankers with a total carrying capacity of 8.3 million dwt, according to S&P Global Maritime Portal.

Separately, the State Department blacklisted three companies, including Khazar Sea Shipping Lines, part of the Islamic Republic of Iran Shipping Lines, for serving the Iran-Russia trade.

"These designations will constrain military-related transfers between Russia and Iran as Tehran deepens its support for Moscow's war against Ukraine," the department said.

More sanctions

The Treasury Department's Office of Foreign Assets Control, meanwhile, sanctioned more than a dozen energy research and educational institutions as well as drilling and mining equipment firms. Those include Gazprom VNIIGAZ, the main research center of gas major Gazprom, and Gazpromneft NNGGF, which offers technology services for drilling wells.

"Today's actions will further tighten the vise on Putin's ability to wage his barbaric invasion," Treasury Secretary Janet Yellen said.

Separately, the Commerce Department imposed export controls on 71 entities, some of which associated with building Russia's energy capabilities.

"We will continue to impose costs on the Kremlin for continuing this war both by further restricting their access to additional items, as well as through aggressive enforcement in concert with our allies and partners," said Alan Estevez, Commerce's under secretary for Industry and Security .

Through coordination with the G7, the US is aligning its actions with the measures imposed by the EU and UK, according to government officials.