The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated five Russian entities and three Russian individuals under Executive Order (E.O.) 13694, “Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities,” as amended, and Section 224 of the Countering America’s Adversaries Through Sanctions Act (CAATSA).  One of the designated entities in controlled by and has provided material and technological support to Russia’s Federal Security Service (FSB), while two others have provided the FSB with material and technological support.  OFAC is also designating several entities and individuals for being owned or controlled by, or acting for or on behalf of, the three entities that have enabled the FSB.

The action targets the Russian government’s underwater capabilities.  Russia has been active in tracking undersea communication cables, which carry the bulk of the world’s telecommunications data.  Other examples of Russia’s malign and destabilizing cyber activities cited in Treasury’s press release include the destructive NotPetya cyber-attack; cyber intrusions against the U.S. energy grid to potentially enable future offensive operations; and global compromises of network infrastructure devices, including routers and switches, also to potentially enable disruptive cyber-attacks. 

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British warship shadowing a Russian spy ship in the English Channel earlier this month

“The United States is engaged in an ongoing effort to counter malicious actors working at the behest of the Russian Federation and its military and intelligence units to increase Russia’s offensive cyber capabilities.  The entities designated today have directly contributed to improving Russia’s cyber and underwater capabilities through their work with the FSB and therefore jeopardize the safety and security of the United States and our allies,” said Treasury Secretary Steven T. Mnuchin.  “The United States is committed to aggressively targeting any entity or individual working at the direction of the FSB whose work threatens the United States and will continue to utilize our sanctions authorities, including those provided under CAATSA, to counter the constantly evolving threats emanating from Russia.”

OFAC designated the FSB on March 15, 2018 pursuant to Section 224 of CAATSA for engaging in activities that undermine the cybersecurity of individuals and entities on behalf of the Russian government.  The FSB was also previously sanctioned on December 28, 2016 pursuant to E.O. 13694, as amended.

As a result of the action, all property and interests in property of the designated persons subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.