US State Dept and OFAC Sanction Chinese Firms for Assisting Russia

US State Dept and OFAC Sanction Chinese Firms for Assisting Russia
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The Lede: The U.S. Department of State imposed sanctions on China HEAD Aerospace Technology Company, which, as it said, supplied Russia with satellite imagery of locations in Ukraine. The U.S. Treasury Department has also taken action against King-Pai Technology HK Co., Ltd., a company based in China that provides supplies to several entities within Russia's military-industrial complex.

What we know:

  • The Treasury and State departments, in collaboration with Britain, have imposed sanctions on over 120 individuals and entities in more than 20 countries and jurisdictions for their role in supporting and facilitating Russian aggression against Ukraine and in an effort to limit Russia's access to the global financial system by targeting intermediaries and their associated businesses.
  • China HEAD Aerospace Technology Company, a PRC-based satellite image reseller, has been providing satellite imagery of Ukrainian locations amid the ongoing war to entities linked with PMC Wagner and Yevgeny Prigozhin, according to the Department of State.
  • China HEAD is being designated pursuant to Section 1(a)(vi)(B) for “being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Prigozhin” – Putin’s trusted ally and founder of Wagner group who is also on FBI’s wanted list for meddling in the 2016 U.S. presidential election through the Internet Research Agency (IRA).
  • The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) targeted King-Pai Technology HK Co., Limited (King-Pai) - a company based in PRC that supplies multiple entities in Russia's military-industrial complex. One of these entities is Radioavtomatika LLC (Radioavtomatika), which focuses on acquiring foreign goods for Russia's defense industry. On March 3, 2022, Radioavtomatika was designated for its involvement in the defense and related material sector of the Russian economy. King-Pai provides microelectronics that have defense applications, such as guidance systems for cruise missiles.
  • All of these individuals and entities will have their assets frozen and properties in the United States or under the control of U.S. citizens blocked from access. Also, entities that are owned, either directly or indirectly, by 50% or more by any person on the list will also be blocked. Transactions involving the assets or properties of the blocked individuals are prohibited for U.S. citizens or within the U.S. unless they have a special license from OFAC or are exempt. This includes giving or receiving any funds, goods, or services to or from a blocked person. Any such transactions must be reported to the Department of OFAC.

The background: In January the U.S. Department of Treasury sanctioned Changsha Tianyi Space Science and Technology Research Institute, also known as Spacety, and its Luxemburg-based subsidiary for being accused of providing radar satellite images of Ukraine to Russia's Wagner Group, which allegedly used them to aid their military operations. Spacety allegedly supplied Terra Tech, a technology firm based in Russia, with orders for synthetic aperture radar satellite imagery of locations in Ukraine. The sanctions prohibit the transfer, payment, or export of any property or interests in the United States to the entities targeted.

China HEAD Aerospace Technology Company has also already been sanctioned when the U.S. Commerce Department added the firm to the “entity list” for reportedly supplying products and services to the Russian military. The decision came soon after China issued 12-point proposal on one year anniversary of the Russia-Ukraine War. Mao Ning, a spokesperson of the Chinese foreign ministry, said instead of promoting peace, the U.S. was putting "fuel into the fire."

Likely outcomes/Takeaway:

  • It’s likely that the latest set of sanctions imposed by the Department of State and OFAC is not just about Russia. The U.S. government has become increasingly concerned about the potential transfer of sensitive technologies and materials to countries or entities that could pose a threat to its national security interests. China, with its growing technological capabilities and economic power, has been a particular focus of concern in recent years.  The U.S. government's scrutiny of Chinese companies in sensitive sectors, such as space technology and defense, has been a response to this concern. The U.S. government has been using a variety of tools, including sanctions, export controls, and investment restrictions, to limit China's access to sensitive technologies and materials.
  • By targeting Chinese companies that are allegedly providing military-related products and services to Russia, the U.S. government is taking a firm stance against any actions that could contribute to destabilizing activities by Russia or other countries. Meanwhile, it also limits the ability of Chinese firms to do business in the United States. Individuals and entities that have been sanctioned will not be able to access any funds, property, or assets within the United States. Additionally, any transactions involving their assets or properties will be prohibited for U.S. citizens or within the U.S.


  • “The United States will continue to take action against Russia and those supporting its war in Ukraine, including further implementing the G7’s commitment to impose severe consequences on third country actors who support Russia’s war in Ukraine,” United States Secretary of State Antony Blinken.
  • “On the first anniversary of the Ukrainian crisis, China has issued a position paper on a political solution to the Ukrainian crisis, while the US has issued sanctions against companies in China and other countries. We can all see clearly who is promoting peace talks and who is putting fuel into the fire.” Mao Ning, a spokesperson of the Chinese Foreign Ministry.

Good Reads:

U.S. sanctions hit over 120 targets supporting Russia's invasion of Ukraine (Reuters)

Beijing complains of new ‘illegal’ US sanctions (Asia Times)

U.S. sanctions Chinese satellite firm for allegedly supplying SAR imagery to Russia’s Wagner Group (Space News)