NEW US RESTRICTIONS ON LUXURY GOODS EXPORTS TO RUSSIA

On March 11, 2022, President Biden issued Executive Order 14068 (EO 14068) Prohibiting
Certain Imports, Exports, and New Investment with Respect to Continued Russian Federation
Aggression, prompting a set of new regulations addressing, among other things, the luxury goods
market. Below are some key takeaways:

The Scope. The EO prohibits the exportation, re-exportation, sale, or supply (either directly
or indirectly) of “luxury goods” from the United States or by a “United States person,” wherever
the person may be located, to any Russian person in Russia, or to any Belarusian person in Belarus.

United States Person. Means any US citizen, lawful permanent resident, entity organized
under the laws of the United States or any jurisdiction within the United States (including foreign
branches), or any person in the United States.

The March 16, Final Published Rule. The final rule, published last week, finally gave
clarity by defining “luxury goods” to include the following categories:

• Beverages, spirits, and vinegar
• Tobacco and manufactured tobacco substitutes
• Essential oils and resinoids; perfumery, cosmetic, or toilet preparations
• Plastics
• Leather
• Fur and artificial fur
• Wood
• Printed materials (including books and newspapers)
• Silk
• Fabric and textiles
• Apparel, shoes, and accessories
• Ceramic and glass/glassware
• Metals and precious metals
• Machinery
• Vehicles
• Clocks and watches
• Musical instruments
• Art

The above restrictions are in addition to the wide array of US and multilateral sanctions already
existing and recently expanded. Their aim is to further curtail commercial activities with Russia
and are intended to affect Russia’s wealthiest citizens most directly by seeking to prevent them
from obtaining luxury goods. The extensive list of persons already subject to direct sanctions, and
who appear in the Office of Foreign Assets Control’s (“OFAC”) list of specially designated
nationals, are already cut off directly from the supply of the categories of goods described above.

The EO and accompanying restrictions act to further restrict the supply of goods into Russia and
Belarus, regardless of whether the purchaser is included in OFAC’s list.
We are available to analyze and discuss with our clients the implementation of appropriate
compliance measures in view of the above regulations.

Contacting Pavia & Harcourt LLP

Questions regarding matters discussed in this publication may be directed to Giovanni Spinelli at
gspinelli@pavialaw.com or Nicolo’ Majnoni at nmajnoni@pavialaw.com.

About Pavia & Harcourt LLP

Established in 1951, Pavia & Harcourt LLP is a business law firm concentrating in international
commercial and corporate transactions, banking, media and entertainment, real estate, litigation
and arbitration, intellectual property, estate planning and administration, and matrimonial law. We
are based in New York City.