Remarks by Secretary of the Treasury Janet L. Yellen at Roundtable with Nkangala Technical and Vocational Education and Training College in Emalahleni, South Africa

As Prepared for Delivery

It is a pleasure to be here today in Emalahleni, “the place of coal,” in some ways the epicenter of South Africa’s Just Energy Transition. Thank you all for the opportunity to meet with you.

I want to thank Premier Refilwe Mtweni-Tsipane and Executive Mayor Nomveliso Nyukwana for their leadership and support for the Just Energy Transition.

The work that you are doing here in Emalahleni and in the broader Mpumalanga Province is important for laying the foundation for a successful transition to a cleaner energy system in South Africa.

We fully recognize that transitioning the local economy and the economy of South Africa to clean energy will not be without challenges.

But the investments that our governments and the private sector will make over the coming years in wind, solar, battery storage, and non-energy infrastructure will pay dividends in terms of well- paying jobs and a growing and cleaner economy.

They will also bring cleaner air for you and your children.

Workers are the core of a just transition, and I am so pleased to be able to meet with some of the individuals who are committed to working for South Africa’s sustainable future.

In the United States, we are also going through a transition. We were able to pass a massive set of laws designed to invest in the infrastructure of the future and allow us to meet our climate goals.

These investments will yield important returns, particularly as we consider workers’ livelihoods at every stop along the way.

Last September, Presidents Ramaphosa and Biden met in Washington and reaffirmed their commitment to the South Africa Just Energy Transition Partnership, or JETP.

This program is a first-of-its-kind partnership that mobilizes the resources of the United States, the United Kingdom, France, Germany, and the European Union to help South Africa achieve the energy transition goals it has identified.

The financial package of $8.5 billion is a substantial down payment. Importantly, it is designed to mobilize additional money from the private sector and philanthropies, and I will meet with representatives from both groups later today.

The JETP Investment Plan drafted by South Africa highlights the need for specific programming in Mpumalanga Province, the largest coal-producing region in South Africa.

The Plan calls for job retraining and reskilling, cash payments to support displaced workers while they find new employment, redevelopment of former coal mines and coal power plants as clean energy production sites and other productive uses.

And it also calls for investment in non-energy infrastructure, including roads, rail, ports, and digital infrastructure that will support new industries.

The United States’ commitment to the energy transition being “just” is firm. That is why President Biden made an additional commitment to President Ramaphosa of $45 million in grant funding to support South Africa’s efforts.

Through our various agencies, including the U.S. Trade and Development Agency, USAID, Power Africa, the International Development Finance Corporation, and the Departments of State, Energy, and Treasury, we are identifying the highest-value opportunities for investing our resources to help achieve these goals.

Our success also depends on committed South Africans such as yourselves. Your hard work to get to where you are, ready and capable of participating fully in the clean energy economy will benefit not only yourselves and your families, but also the whole community of Mpumalanga and South Africa.

I want to applaud you for your achievements thus far in being at the forefront of the economy of the future, and also applaud the leadership of Premier Mtweni-Tsipane. I look forward to all that you will accomplish and to learning more during our conversation.

 

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Remarks by Secretary of the Treasury Janet L. Yellen to Press at Nkangala Technical and Vocational Education and Training College in Emalahleni, South Africa

As Prepared for Delivery

I was pleased to have the opportunity to visit Mpumalanga Province today to see first-hand the difference that South Africa’s Just Energy Transition Partnership can make in advancing an energy transition in communities like this and ensuring the transition delivers on the “just” promise.

The investments that our governments and the private sector are making in renewable energy will play a critical role in creating good-paying jobs and reliable sources of clean energy that will power South Africa’s economic growth.

The United States is committed to the South Africa JETP, and we are committed to a transition that is “just” for the communities and workers that are affected.

Facilitating a transition that leaves no one behind requires job retraining and reskilling like we saw today. It also requires the redevelopment of former fossil fuel and power sites and investments in infrastructure to support the development of new industries and economic opportunities. That is exactly what the United States is committed to do.

The JETP and the initial $8.5 billion financial package from South Africa’s international partners – including the United States – is a demonstration of our support for South Africa as it launches a transition that will grow its economy for the future, expand employment opportunities, capitalize on growing new industries, and improve health outcomes.

Seeing the programs here in Mpumalanga today gives me confidence in South Africa’s commitment to capitalize on this opportunity, and the U.S. will stand alongside and support South Africa in the years to come.

 

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Remarks by Secretary of the Treasury Janet L. Yellen at Lunch with Local and International Philanthropies on South Africa’s Just Energy Transition Partnership (JETP)

As Prepared for Delivery

I want to start by thanking you and your organizations for being here today and for demonstrating your commitment to South Africa’s just energy transition toward renewable sources.

An energy transition that is not just will simply not work. Equally important, however, is the imperative to seize the new opportunities that the transition will offer, keeping a worker-centered perspective in mind at all stages.

Indeed, I think we all see both the tremendous need and opportunity for reform of the energy sector in a way that lifts up impacted communities and strengthens sustainable economic growth. That is, in large part, why we joined international partners in creating the Just Energy Transition Partnership or JETP with South Africa.

The United States is firmly committed to this engagement. We have pledged to mobilize over $1 billion from across our government over the next three to five years to achieve the just energy transition priorities that the South Africans identified in their JETP Investment Plan.

South Africa’s Just Energy Transition Investment Plan is the result of a year’s work. It identifies some $98 billion in necessary investments in clean energy and programming to support the “just” transition over the long term, as well as investment in green hydrogen infrastructure and electric vehicle manufacturing.

It is the “just” element of the transition that I want to focus on today, and where we want to collaborate with you closely. The success of the JETP will not be possible unless we support the coalminers and coal mining communities as they transition to new economic activities.

Our South African partners have identified “just” investments of over 60 billion rand, or about

$3.5 billion, for the Mpumalanga [em-POO-mah-lahng-uh] Region, which is where I was this morning touring a US-funded renewable energy job training facility for women.

These investments cover a range of activities, including funding to support local communities and develop supply chains for new energy technologies; remediating and repurposing coal mining land; improving non-energy infrastructure; and partnering with the coal workforce through job reskilling, mobility payments, and temporary income support for displaced workers.

Indeed, we must demonstrate quickly that these coal communities, which are already struggling with unemployment, poverty and the health impacts of coal mining and emissions, will not be left behind in the context of an energy shift that benefits other regions. South Africa will need to see concrete action soon to keep up momentum on the JETP.

In recognition of this importance, President Biden went beyond our initial JETP commitment to pledge an additional $45 million focused specifically on the “just” element of the transition. As the Investment Plan lays out though, much more will be needed.

At COP27, many of the organizations represented here today pledged to invest $500 million in low- and middle-income countries with ambitious energy transition plans. South Africa fits that bill perfectly and many of you have long histories investing in these very communities we hope to support alongside you.

We would like to understand how you are thinking about extending support in the context of the ambitious JETP here in South Africa, where the transition is already at hand and the needs are urgent. I’ll start by asking: how can we work together to achieve the greatest impact for the people of South Africa?

Thank you and I’m looking forward to hearing your perspectives.

 

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Remarks by Secretary of the Treasury Janet L. Yellen at Ford Silverton Assembly Plant in Pretoria, South Africa

As Prepared for Delivery

Thank you for that introduction. And thank you for having me here today at Ford. It’s great to be at an American business in South Africa. This factory is a strong example of how deepening economic integration between the U.S. and South Africa — and the continent more broadly — can produce good jobs and boost economic growth for both of us.

I began this trip in Senegal. There, I explained that the United States’ strategy toward Africa is centered around a simple recognition: that Africa will shape the future of the global economy. And I explained that the United States is ready to work with Africa as an equal partner — defined not by what we can do for each other, but rather what we can do with each other.

We know that a thriving Africa is in the interest of the United States. A thriving Africa means a larger market for our goods and services. It means more investment opportunities for our businesses, like this Ford plant, which can create jobs in Africa and customers for American businesses. And it means that more Americans can benefit from the dynamism and creativity of people in Africa.

A key pillar of the U.S. strategy toward Africa is boosting mutually beneficial trade and investment. The United States is South Africa’s third-largest trading partner and a major destination for South African investment. In turn, South Africa is our largest trading partner in Africa. In the coming years, we intend to build on that strong foundation to promote even deeper economic integration here, as well as with other African countries.

Indeed, the United States sees tremendous economic potential in Africa. Across the continent, people are becoming more connected to the world than at any other time in history. Importantly, Africa is undergoing a significant demographic boom. By 2050, Africans are projected to make up a quarter of the world’s population. Africa’s working-age population is rapidly growing at a time when other regions face the challenges of aging populations. This presents an extraordinary economic opportunity.

Our work to boost trade and investment begins with facilitating business between Americans and Africans. For over two decades, under the African Growth and Opportunity Act, the United States has provided eligible Sub-Saharan countries with duty-free access to our market for thousands of products. South Africa was the biggest beneficiary of this arrangement last year. And since 2021, the United States has helped close more than 800 trade and investment deals in Africa — totaling $18 billion.

Some of America’s biggest companies are doubling down on their commitments in Africa. As you know, Ford recently began production of vehicles made possible by its $1 billion investment here in South Africa. Technology companies like Cisco, manufacturing companies like General Electric, and financial firms like Visa have also made new announcements. We believe that leadership in the industries of the future requires close partnership with companies and people in Africa.

Prosperity in Africa also requires promoting more trade within Africa. As Africa’s middle class grows, the continent will become a bigger market for its own goods and services. Trade between African countries has the potential to boost good jobs and economic opportunity. And it enables more Africans to benefit from the innovations of their neighbors. That’s why the United States strongly supports the African Continental Free Trade Area. Estimates indicate that this Free Trade Area could boost real income by roughly 9 percent by 2035.

As we deepen our economic ties, we believe that sustained trade and investment depends on continued economic development. Trade requires quality roads and bridges; businesses cannot operate in the 21st century without reliable broadband and electricity; and a skilled workforce requires quality education and training.

Africa’s infrastructure gap is estimated at over $100 billion annually. To invest in global infrastructure, the G7 has announced a Partnership for Global Infrastructure and Investment. This initiative aims to mobilize $600 billion into a variety of quality infrastructure projects by 2027 — including in Africa. Through the Millennium Challenge Corporation and the Development Finance Corporation, the United States has over ten billion dollars of active commitments and programs in Africa, in areas from telecommunications to renewable energy production. And I have personally convened the multilateral development banks to urge them to step up policy and technical assistance – as well as financing – in infrastructure.

Last month, President Biden announced an initiative on digital transformation. We intend to invest over $350 million and facilitate over $450 million in financing for this continent. Funds will go toward expanding Internet access as well as enabling a vibrant digital ecosystem through digital skills and literacy. Strengthening Africa’s digital economy has the potential to unlock innovation, particularly by leveraging the talents of young workers that are early adopters of technology.

Let me be clear: we do not take our investments lightly. Our projects and partnerships are motivated by our mutually beneficial, long-term partnership. That’s why we have rigorous accountability, transparency, and technical standards. And that’s why we assist countries with policy reform and capacity building.  We believe these steps help attract private sector investment and deliver better economic returns. We know that people in Africa are interested in economic arrangements that are fair and open – ones that produce projects that are high quality and sustainable over the long term. And we also share a recognition of the importance of strong, open, and accountable institutions that deliver well for people and businesses. 

I’ve spoken about why U.S. integration with Africa is important for our economic interests. Let me speak briefly about how it furthers our security interests as well.

Over the past three years, we have seen how disruptions in one part of the world can shake the global economy. COVID-19 brought the world’s economic activity to a standstill. Russia’s brutal war against Ukraine has raised energy prices and exacerbated food insecurity. These shocks have taught us about the importance of secure and resilient supply chains.

As we continue to vigorously promote global economic integration, the United States is pursuing “friendshoring” policies aimed at mitigating vulnerabilities in supply chains. We are addressing the over-concentration of the production of critical goods in certain markets — particularly those that may not share our economic values. To do so, we are deepening economic integration with the many countries that we can count on. That includes our many trusted trading partners on this continent — like South Africa. We believe that this policy can help increase the resilience of both our economies.

Success in Africa means success for all of us. A thriving Africa helps support a thriving America. The United States is committed to working with you to deepen our ties: not for show, not for the short-term — but for the long haul.

Thank you for having me.

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READOUT: Deputy Secretary Adeyemo Convenes Roundtable Discussion on How IRS Modernization Will Ensure a More Accessible IRS

WASHINGTON—Yesterday, U.S. Deputy Secretary of the Treasury Wally Adeyemo led a roundtable discussion with more than 20 key stakeholders on IRS efforts to use resources provided by the Inflation Reduction Act to upgrade service for all taxpayers, including underserved communities, this tax filing season and improve accessibility and tax fairness over the coming decade.

During the conversation, Deputy Secretary Adeyemo highlighted how improvements to customer service on the phone, online, and in-person will benefit taxpayers from underserved communities, ensuring returns are processed more quickly and that taxpayers are able to access credits and benefits for which they are eligible in a timely manner. He also discussed ways in which a better-resourced IRS can make the tax code fairer by ensuring wealthy Americans and corporations can’t evade taxes they owe.

The Deputy Secretary and national advocates were joined by U.S. Treasury and IRS officials, including Assistant Secretary for Tax Policy Lily Batchelder and Counselor for Racial Equity Janis Bowdler.

Yesterday’s roundtable was part of an ongoing series of convenings the Deputy Secretary has held since the IRA was passed in August. In addition to hearing from civil rights leaders and national advocates, Deputy Secretary Adeyemo has also convened roundtables with labor leaders, climate change organizations, renewable energy investors, and small businesses.

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Remarks by Secretary of the Treasury Janet L. Yellen at Bilateral Meeting with Minister of Finance of South Africa Enoch Godongwana

As Prepared for Delivery

Minister Godongwana I very much look forward to reconnecting with you today. We have spoken several times over the last year, including last October in Washington. I’m glad to be able to continue our conversation here in South Africa.

The United States strongly values our relationship with South Africa.

The Minister and I will discuss how multilateral development banks can better address emerging global challenges, and how that can benefit African countries. And we will discuss South Africa’s role in developing the Pandemic Fund and its continued involvement.

I am also eager to hear the Minister’s views on the Common Framework for debt treatment, given South Africa’s membership in the G20 and its role as co-chair of Zambia’s creditor committee.
And, of course, we will discuss South Africa’s economic outlook and energy sector reforms.

As you know, South Africa is the first country with a Just Energy Transition Partnership – to which the United States was proud to commit as a partner.

This partnership represents South Africa’s bold first step toward expanding electricity access and reliability and creating a low carbon and climate resilient economy, a move that I believe will alleviate the deep fiscal strain the energy sector is putting on South Africa’s economy and support strong economic growth.

The partnership will also invest in the jobs of growing industries so that the transition is just and does not leave anyone behind.

I have appreciated the Minister’s cooperation and insightful views in our talks so far, and I look forward to our discussion today.

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Treasury Sanctions Paraguay’s Former President and Current Vice President for Corruption

WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Horacio Manuel Cartes Jara (Cartes), the former President of Paraguay, and Hugo Adalberto Velazquez Moreno (Velazquez), the current Vice President, for their involvement in the rampant corruption that undermines democratic institutions in Paraguay. OFAC is also designating Tabacos USA Inc., Bebidas USA Inc., Dominicana Acquisition S.A., and Frigorifico Chajha S.A.E., for being owned or controlled by Cartes. These individuals and entities are being designated pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world.

“Treasury is committed to addressing systemic corruption around the world, even in its most entrenched forms and at the highest levels of public office,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “Today’s action exposes the endemic corruption undermining Paraguayan democratic institutions and highlights the pressing need for the Government of Paraguay to act in the best interest of its citizens, not line the pockets of its political elites.”   

Today’s action follows the visa restrictions imposed on Cartes and Velazquez in 2022 under Section 7031(c) of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2022, supporting a whole-of-government approach to combatting corruption and illicit finance.

 

TARGETING CORRUPTION AT THE HIGHEST LEVELS OF PARAGUAYAN GOVERNMENT

Horacio Cartes

Cartes engaged in corruption before, during, and after his term as President of Paraguay.

Cartes’ political career was founded on and continues to rely on corrupt means for success. He joined the Colorado Party in 2009, providing financial investments and incentives to induce the party to eliminate its 10-year length-of-affiliation requirement to enable him to run as the party’s presidential nominee. Cartes paid party members up to $10,000 each to support his candidacy ahead of the 2013 elections. While President of Paraguay, Cartes continued his corrupt schemes, including making cash payments to officials in exchange for their loyalty and support. He maintained his grip on policymaking through monthly cash bribes paid out to loyal legislators; payments ranged from $5,000 to $50,000 per member. Cartes ensured the effectiveness of this scheme by terminating payments to legislators who failed to carry out his orders.

In 2017, Cartes pledged $1 million of his own wealth to buy the votes of legislators to support his unsuccessful push for constitutional reform to allow him to run for a second term in 2018. Cartes continued to influence legislative activities after leaving office, targeting political opponents, and bribing legislators to direct votes in his interest, with top supporters receiving as much as $50,000 monthly.  

Cartes is being designated pursuant to E.O. 13818 for being a foreign person who is a current or former government official, or a person acting for or on behalf of such an official, who is responsible for or complicit in, or has directly or indirectly engaged in corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.

OFAC is also designating four entities, Tabacos USA Inc., Bebidas USA Inc., Dominicana Acquisition S.A., and Frigorifico Chajha S.A.E., pursuant to E.O. 13818 for being owned or controlled by Cartes.

Concurrent with this action, OFAC is issuing two general licenses, GL 5 and GL 6, authorizing, respectively, certain transactions related to Frigorifico Chajha S.A.E. and the wind-down of transactions involving any entity 50 percent or more owned by Cartes through 12:01 a.m. eastern standard time, March 27, 2023, as well as associated FAQs 1111 and 1112.

 

Hugo Velazquez

Velazquez, the current Vice President of Paraguay, has also engaged in corrupt practices to interfere with legal processes and protect himself and criminal associates from criminal investigations, including by bribing and threatening those who could expose his criminal activity.

Cartes and Velazquez both have ties to members of Hizballah, an entity designated by the U.S. Department of State as a Foreign Terrorist Organization and the target of multiple OFAC designations. Hizballah has regularly held private events in Paraguay where politicians make agreements for favors, sell state contracts, and discuss law enforcement efforts in exchange for bribes. Representatives of both Cartes and Velazquez have collected bribes at these meetings.

Velazquez is being designated pursuant to E.O. 13818 for being a foreign person who is a current or former government official, or a person acting for or on behalf of such an official, who has engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.

 

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or otherwise exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated person, or the receipt of any contribution or provision of funds, goods, or services from any such person.

The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897 here. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please click here.

 

GLOBAL MAGNITSKY

Building upon the Global Magnitsky Human Rights Accountability Act, E.O. 13818 was issued on December 20, 2017, in recognition that the prevalence of human rights abuse and corruption that have their source, in whole or in substantial part, outside the United States, had reached such scope and gravity as to threaten the stability of international political and economic systems. Human rights abuse and corruption undermine the values that form an essential foundation of stable, secure, and functioning societies; have devastating impacts on individuals; weaken democratic institutions; degrade the rule of law; perpetuate violent conflicts; facilitate the activities of dangerous persons; and undermine economic markets. The United States seeks to impose tangible and significant consequences on those who commit serious human rights abuse or engage in corruption, as well as to protect the financial system of the United States from abuse by these same persons.

 

Click here to view more information on today’s designation.

 

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Treasury Sanctions Russian Proxy Wagner Group as a Transnational Criminal Organization

Sanctions Target Wagner’s Global Support Network, Russia’s Military Complex, Putin Cronies

WASHINGTON — Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is taking additional actions to degrade the Russian Federation’s capacity to wage war against Ukraine by sanctioning six individuals and 12 entities.  Today’s action, concurrent with additional sanctions actions by the Department of State, targets the infrastructure that supports battlefield operations in Ukraine, including producers of Russia’s weapons and those administering Russian-occupied areas of Ukraine.  Notably, today’s actions include the designation of persons that support Russian defense-related entities. 

“As sanctions and export controls on Russia from our international coalition continue to bite, the Kremlin is desperately searching for arms and support – including through the brutal Wagner Group – to continue its unjust war against Ukraine,” said Secretary of the Treasury Janet L. Yellen. “Today’s expanded sanctions on Wagner, as well as new sanctions on their associates and other companies enabling the Russian military complex, will further impede Putin’s ability to arm and equip his war machine.”

DESIGNATING THE WAGNER GROUP AS A SIGNIFICANT TRANSATIONAL CRIMINAL ORGANIZATION

PMC Wagner (Wagner Group) is a Russian private military company led by Yevgeniy Prigozhin, a Putin crony and the target of multiple U.S. sanctions. Wagner Group has been involved in Kremlin-backed combat operations around the world in support of Putin’s war on Ukraine. As Russia’s military has struggled on the battlefield, Putin has resorted to relying on the Wagner Group to continue his war of choice. The Wagner Group has also meddled and destabilized countries in Africa, committing widespread human rights abuses and extorting natural resources from their people. Today, the Wagner Group is being redesignated pursuant to Executive Order (E.O.) 13581, as amended by E.O. 13863, for being a foreign person that constitutes a significant transnational criminal organization. Wagner personnel have engaged in an ongoing pattern of serious criminal activity, including mass executions, rape, child abductions, and physical abuse in the Central African Republic (CAR) and Mali.

In light of the transcontinental threat posed by the Wagner Group, Treasury is concurrently redesignating the Wagner Group pursuant to E.O. 13667 for being responsible for or complicit in, or having engaged in, the targeting of women, children, or any civilians through the commission of acts of violence, or abduction, forced displacement, or attacks on schools, hospitals, religious sites, or locations where civilians are seeking refuge, or through conduct that would constitute a serious abuse or violation of human rights or a violation of international humanitarian law in relation to the CAR. These actions also advance the implementation of President Biden’s “Memorandum on Promoting Accountability for Conflict-Related Sexual Violence (CRSV),” which directs federal agencies to leverage existing sanctions authorities to hold perpetrators of CRSV accountable and combat rampant impunity for these egregious acts.

On June 20, 2017, OFAC designated the Wagner Group pursuant to E.O. 13660 for being responsible for or complicit in, or having engaged in, directly or indirectly, actions or policies that threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine, and on November 15, 2022, the Department of State designated the Wagner Group pursuant to E.O. 14024 for operating in the defense and related materiel sector of the Russian Federation economy.  The Wagner Group has also been sanctioned by Australia, Canada, Japan, the United Kingdom, and the European Union.

DISRUPTING THE WAGNER GROUP’S GLOBAL NETWORK

Treasury is also designating numerous entities and individuals on multiple continents that support the Wagner Group’s military operations. 

Joint Stock Company Terra Tech (Terra Tech) is a Russia-based technology firm that supplies space imagery acquired by commercially active satellites, as well as aerial images acquired by unmanned systems.  Changsha Tianyi Space Science and Technology Research Institute Co. LTD (Spacety China) is a People’s Republic of China (PRC)-based entity that has provided Terra Tech synthetic aperture radar satellite imagery orders over locations in Ukraine. These images were gathered in order to enable Wagner combat operations in Ukraine. In addition, OFAC today took action against Spacety Luxembourg S.A. (Spacety Luxembourg), Spacety China’s Luxembourg-based subsidiary. Joint Stock Company Research and Production Concern BARL (AO BARL) is a Russian space company supporting Russia’s military activities in Ukraine.  AO BARL has shared foreign high-resolution satellite imagery with Russia’s military.

Terra Tech and AO BARL are being designated pursuant to E.O. 14024 for operating or having operated in the technology sector of the Russian Federation economy. Spacety China is being designated pursuant to E.O. 14024 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of Terra Tech. Spacety Luxembourg is being designated pursuant to E.O. 14024 for being owned or controlled by, or for having acted or purported to act for or on behalf of, directly or indirectly, Spacety China.

As a part of this action, Treasury is also designating persons in the CAR and the United Arab Emirates (UAE) that are connected to the Wagner Group’s operations in CAR.  The Department of State is amplifying this action by concurrently designating two persons pursuant to E.O. 14024. Wagner Group personnel first deployed to CAR in January 2018 purportedly to “train” CAR military and security forces. Since then, the Wagner Group has used entities it controls – Officer’s Union for International Security and Sewa Security Services – to provide a veneer of legitimacy for the presence of Wagner Group personnel in CAR, operating under the guise of “instructors.” Wagner Group personnel have perpetrated numerous instances of human rights abuses against civilians in the CAR, including mass summary executions, rape, arbitrary detention, torture, and displacement of civilians. Moreover, the Wagner Group controls numerous gold and diamond mines in CAR, while raiding and plundering others. The Wagner Group has denied access to CAR government officials seeking to inspect mining operations at Wagner Group-controlled sites.

Sewa Security Services (Sewa) is a CAR-based security company controlled by the Wagner Group that provides protection for senior CAR government officials. Sewa has also claimed to provide “instructors” for “training exercises” in CAR. Sewa is being designated under E.O. 13667 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, PMC Wagner, a person whose property and interests in property are blocked pursuant to E.O. 13667.

Officer’s Union for International Security (OUIS) is a Wagner Group front company operating in CAR. Based in Russia, OUIS claims to represent Russian “instructors” in CAR. Starting in early 2021, the Wagner Group used OUIS to obscure an increase of Wagner Group personnel operating in CAR. OUIS is being designated under E.O. 13667 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, PMC Wagner, a person whose property and interests in property are blocked pursuant to E.O. 13667.

Aleksandr Aleksandrovich Ivanov (Ivanov) is a Russian national and the director of OUIS. As director, Ivanov provided an official response to a United Nations report that accused Russian “instructors” of committing human rights abuses in CAR. Ivanov is being designated under E.O. 13667 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, PMC Wagner, a person whose property and interests in property are blocked pursuant to E.O. 13667.

Kratol Aviation (Kratol) is a UAE-based aviation firm. The Wagner Group uses Kratol-provided aircraft to move personnel and equipment between the CAR, Libya, and Mali. Kratol is being designated under E.O. 13667 for having materially assisted, sponsored, or provided financial, material, logistical, or technological support for, or goods or services in support of, PMC Wagner, a person whose property and interests in property are blocked pursuant to E.O. 13667.

Valery Nikolayevich Zakharov (Zakharov) is a Russian national and Wagner Group employee, who served as the National Security Advisor to CAR’s President, serving in both roles simultaneously. During his tenure as the CAR’s National Security Advisor, Zakharov influenced the strategic direction of the Wagner Group in the CAR, while advising CAR’s President on security matters. Zakharov is being designated under E.O. 13667 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, PMC Wagner, a person whose property and interests in property are blocked pursuant to E.O. 13667.

SANCTIONING RUSSIA’S DEFENSE INDUSTRIAL COMPLEX, INCLUDING THOSE SUPPORTING PREVIOUSLY SANCTIONED RUSSIAN FEDERATION DEFENSE-RELATED ENTITIES

Treasury is also designating the following targets to further degrade Russia’s war machine. 

JSC Aviacon Zitotrans (Aviacon Zitotrans) is a Russian cargo airline that has handled cargo shipments for sanctioned Russian Federation defense entities. Additionally, Aviacon Zitotrans has shipped military equipment such as rockets, warheads, and helicopter parts all over the world.  For instance, Aviacon Zitotrans has shipped defense materiel to Venezuela, Africa, and other locations. As one example of its efforts, as of September 2022, Aviacon Zitotrans sought to use a Turkish company and Turkish diplomats to facilitate the sale of Russian defense equipment abroad on behalf of Rosoboroneksport OAO, a U.S.-designated Russian Federation state-owned defense firm. Aviacon Zitotrans is being designated pursuant to E.O. 14024 for operating or having operated in the defense and related materiel and aerospace sectors of the Russian Federation economy.  OFAC identified as property in which Aviacon Zitotrans has an interest four Russia-registered Ilyushin aircraft with tail numbers RA-76842, RA-76502, RA-76846, and RA-78765.

AO Ural Civil Aviation Factory (UCAF) has developed the Altius unmanned aerial vehicle (UAV) for Russia’s Ministry of Defense. UCAF has specifically leveraged personnel to repair UAVs used in Russia’s full-scale invasion of Ukraine. UCAF is being designated pursuant to E.O. 14024 for operating or having operated in the defense and related materiel sector of the Russian Federation economy.

Joint Stock Company National Aviation Service Company (NASC) is a Russia-based state-owned enterprise that repairs and maintains aircraft and electronic equipment. Per a Russian Federation presidential decree, NASC was designated as Russia’s state intermediary for the service of Russian military aircraft supplied abroad. Despite existing restrictions against Russia’s military-industrial complex, NASC has represented itself as not subject to sanctions for the purpose of facilitating Russian defense contracts. NASC is being designated pursuant to E.O. 14024 for operating or having operated in the aerospace sector of the Russian Federation economy.

LLC Research & Production Enterprise Prima (Prima) is a Russia-based entity that develops and produces communication equipment for Russian-manufactured helicopters and airplanes. Prima is being designated pursuant to E.O. 14024 for operating or having operated in the aerospace sector of the Russian Federation economy.

Federal State Unitary Enterprise Scientific and Production Enterprise Gamma (Gamma) is a Russia-based technology entity that carries out work in the interest of the U.S.-designated Federal Security Service (FSB) and the Ministry of Defense of the Russian Federation. Gamma is being designated pursuant to E.O. 14024 for operating or having operated in the defense and related materiel and technology sectors of the Russian Federation economy.

Alan Valeryevich Lushnikov (Lushnikov) is the largest shareholder and president of the U.S.-designated Kalashnikov Concern, the original manufacturer of the AK-47 assault rifle.  Lushnikov indirectly owns 75 percent of Kalashnikov Concern’s shares with the remaining 25 percent being owned by U.S.-designated State Corporation Rostec. Lushnikov is being designated pursuant to E.O. 14024 for operating or having operated in the defense and related materiel sector of the Russian Federation economy.

LLC TKKH-Invest (TKKH-Invest) is the financial vehicle through which Lushnikov owns shares in Kalashnikov Concern. Lushnikov owns 100 percent of TKKH-Invest, and TKKH-Invest owns 75 percent of Kalashnikov Concern. TKKH-Invest was designated pursuant to E.O. 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Lushnikov, a person whose property and interests in property are blocked pursuant to E.O.14024.

JSC Aerospace Defense Concern Almaz-Antey (Almaz-Antey) is a Russia-based state-owned enterprise that designs, develops and manufactures anti-aircraft, anti-missile, and non-strategic missile defense systems.  OFAC first designated Almaz-Antey on July 16, 2014, pursuant to E.O. 13661.  Today, OFAC redesignated Almaz-Antey pursuant to E.O. 14024 for operating or having operated in the defense and related materiel sector of the Russian Federation economy. 

Yan Valentinovich Novikov (Novikov) is a Russian national and the Director General and CEO of Almaz-Antey. Novikov is being designated pursuant to E.O. 14024 for operating or having operated in the defense and related materiel sector of the Russian Federation economy, and for being or having been a leader, official, senior executive officer, or member of the board of directors, of the Government of the Russian Federation (GoR).

OFAC will continue to target Russia’s efforts to resupply its weapons and sustain its war of aggression against Ukraine and destabilizing activities worldwide, including any foreign individuals or entities that assist the Russian Federation in those efforts. Non-U.S. persons risk exposure to sanctions pursuant to E.O. 14024 for supporting Russia’s military-industrial complex.

TARGETING PUTIN’S CRONIES AND THEIR FAMILY MEMBERS

OFAC also sanctioned Rustam Nurgaliyevich Minnikhanov (Minnikhanov), a Russian national and the chairman of the board of U.S.-designated Tupolev Public Joint Stock Company, which produces strategic bombers for Russia’s armed forces. Minnikhanov is also the longtime head of Tatarstan, a federal subject of the Russian Federation. Minnikhanov is being designated pursuant to E.O. 14024 for being or having been a leader, official, senior executive officer, or member of the board of directors of the GoR and for operating or having operated in the defense and related materiel and aerospace sectors of the Russian Federation economy.

Much of Minnikhanov’s property is formally registered in the name of his wife, Gulsina Akhatovna Minnikhanova (Minnikhanova). Minnikhanova’s main asset is Obshchestvo s Ogranichennoi Otvetstvennostyu Luchano (Luciano), a hotel and spa complex in Kazan, a city in the Russian Federation. In 2016, a non-governmental organization (NGO) in Russia accused Minnikhanov and Minnikhanova of accepting bribes in the form of investment in Luciano and a mansion in Kazan. The same NGO estimates that the Minnikhanov family owns properties worth almost $50 million, spread across Russia, France, and the United Arab Emirates.

Minnikhanova is being designated pursuant to E.O. 14024 for being a spouse of Minnikhanov.  Luciano was designated pursuant to E.O. 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Minnikhanova.

HOLDING RUSSIA ACCOUNTABLE FOR ILLEGAL ATTEMPTED ANNEXATION

A critical aspect of Putin’s war against Ukraine is Russia’s effort to control – including through sham annexation referendums – Russia-occupied areas of Ukraine.  As a part of promoting accountability for those involved in this aspect of Russia’s war effort, Treasury is designating two Russian Federation Presidential Administration (PA) officials involved in these reprehensible efforts. 

Aleksandr Dmitrievich Kharichev (Kharichev) and Boris Yakovlevich Rapoport (Rapoport) are Russian Federation PA officials associated with U.S.-designated Sergei Kiriyenko. The PA subdivision led by Kharichev was tasked with hiring personnel to administer Russia-occupied areas of Ukraine’s Donbas region.

Kharichev’s subordinate Rapoport, who is also closely tied to U.S.-designated former PA official Vladislav Surkov, has been engaged in nefarious activity on behalf of the Kremlin for years, including supporting electoral campaigns of Kremlin-backed candidates and implementing Kremlin policy related to self-proclaimed breakaway republics in Ukraine and Georgia. Most recently, Rapoport prepared the sham annexation referendums staged in September 2022 in the Donetsk, Kherson, Luhansk, and Zaporizhzhia oblasts of Ukraine.

Kharichev and Rapoport are being designated pursuant to E.O. 14024 for being or having been leaders, officials, senior executive officers, or members of the board of directors of the GoR. Kharichev and Rapoport have also been sanctioned by the European Union, Switzerland, and the United Kingdom.

The Department of State is concurrently taking a number of actions under E.O. 14024. It is  designating five entities and one individual linked to the Wagner Group and is also designating 23 individuals and entities for their status as government officials, their involvement in the extended networks of designated persons, and/or for being a part of Russia’s military industrial complex. Additionally, the Department of State is identifying two yachts and one aircraft as blocked property. Information on these actions is available in this Fact Sheet [+link].

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the individuals above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.

The power and integrity of OFAC sanctions derive not only from the ability to designate and add persons to the SDN List but also the willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897. For detailed information on the process to submit a request for removal from an OFAC sanctions list.

For identifying information on the individuals and entities sanctioned or property identified today. 

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READOUT: Deputy Secretary Adeyemo Meets with Private Sector and Philanthropic Leaders to Discuss Economic Opportunity and Access to Capital

WASHINGTON – Today, U.S. Deputy Secretary of the Treasury Wally Adeyemo participated in a roundtable discussion on opportunities to advance economic and racial equity and expand access to capital for underserved Americans alongside senior representatives from the White House, six federal agencies, and over 20 organizations from the private and social sectors. The roundtable focused on federal community investment priorities and opportunities for the private and social sector to align their efforts to amplify the impact of these investments.
 
The roundtable participants highlighted how legislation like the American Rescue Plan Act, Bipartisan Infrastructure Law, CHIPS Act, and Inflation Reduction Act provide the federal government the opportunity to drive capital into communities that have long lacked the resources necessary to create sustainable local economic engines, particularly for underserved and marginalized communities, including communities of color and low-income, rural, and Tribal communities. This includes programs like the Biden-Harris Administration’s historic investments of over $8 billion in CDFIs and MDIs under the Emergency Capital Investment Program, the nearly $10 billion provided to support small businesses under the Small Business Credit Initiative, and many others.
 
The private and philanthropic sectors were represented at the roundtable by members of the Economic Opportunity Coalition (EOC), a coalition of private sector companies and foundations working to make historic investments in underserved communities that was announced by Vice President Harris in the summer of 2022. The Deputy Secretary was joined by representatives from each of the six Interagency Community Investment Committee (ICIC) agencies, including USDA Deputy Secretary Jewel Bronaugh, Department of Commerce Under Secretary Don Cravins, Department of Transportation Assistant Secretary Christopher Coes, and Department of Housing and Urban Development Assistant Secretary Julia Gordon, among other federal officials from the Small Business Administration and the White House. Treasury’s Counselor for Racial Equity Janis Bowdler facilitated the discussion. The ICIC is an interagency coordinating body that facilitates collaboration between its member agencies in the administration of federal community investment programs and was announced alongside the EOC by the Vice President last summer.
 
During the conversation, Deputy Secretary Adeyemo highlighted the importance of a coordinated partnership between the public and private sectors to address economic inequality across the nation and maximize the impact of the Biden-Harris Administration’s unprecedented investments. In addition representatives from the ICIC agencies discussed their community investment and economic development priorities, and representatives from EOC members discussed their organizations’ efforts to advance economic and racial equity and ways they are considering supporting these federal investments, with a particular emphasis on supporting mission lenders, small businesses and entrepreneurs, affordable housing and community infrastructure, and financial inclusion.

 

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