In line with G7 efforts to disrupt Russia’s defense industry’s reliance on western IT systems, on June 12, 2024, Treasury issued a determination that restricts the provision of certain IT and software-related services to Russia. The determination, “Prohibition on Certain Information Technology and Software Services,” issued pursuant to Executive Order (E.O.) 14071 (the “IT and Software Services Determination”), prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, to any person located in the Russian Federation of: (1) IT consultancy and design services; and (2) IT support services and cloud-based services for the following categories of software: enterprise management software and design and manufacturing software (collectively, “Covered Software”). The IT and Software Services Determination will take effect at 12:01 a.m. eastern daylight time on September 12, 2024. See FAQs 1185, 1186, 1187, and 1188 for additional information.
The aim of this action is not to prohibit all activity relating to the provision of IT and software-related services to Russia. The United States strongly supports the free flow of information and communications globally as facilitated by telecommunications and the internet. These measures do not prohibit internet access or the delivery of internet-based communications services. Treasury already has in place General License (GL) 25D, which authorizes certain transactions ordinarily incident and necessary to the receipt or transmission of telecommunications involving the Russian Federation and the provision of certain services incident to the exchange of communications over the internet, subject to certain restrictions. For additional information, see FAQ 1040. Treasury has also amended GL 6D to authorize transactions related to certain agricultural and medical activities involving the provision of information technology and software-related services. Additionally, the importation from any country, or the exportation to any country of any information or informational materials, regardless of format or medium, is generally exempt from the scope of sanctions prohibitions under the International Emergency Economic Powers Act. See 50. U.S.C. § 1702(b)(3).
In addition, the IT and Software Services Determination does not prohibit the following IT and software services, which are excluded from its scope: (1) any service to an entity located in the Russian Federation that is owned or controlled, directly or indirectly, by a United States person; (2) any service in connection with the wind down or divestiture of an entity located in the Russian Federation that is not owned or controlled, directly or indirectly, by a Russian person; and (3) any service for software that would be eligible for a license exception or otherwise authorized for export or reexport to Russia by the Department of Commerce.