Russian intermodal container operator PJSC TransContainer is included in the latest sanction package published by the U.S. Department of the Treasury. The Russia-based company will no longer be able to conduct business with U.S. entities. PJSC TransContainer’s official statement on the matter underlines that “the company’s operating activities continue as usual,” while its subsidiaries based outside of Russia remain unaffected.
It should be noted that PJSC TransContainer has not been included in any of the EU sanction packages released so far. Concerning the U.S. Department of the Treasury, the justification regarding PJSC TransContainer’s sanctioning reads as follows: “Russia-based PJSC TransContainer is an intermodal container operator that offers military transportation services to the Russian armed forces and has played a role in the illicit transshipment of North Korean munitions and weapons systems for use on the battlefield in Ukraine.”
The White House National Security Council (NSC) had confirmed in early 2023 that the revived rail freight activity noticed along the North Korean-Russian border was linked to the transport of munition destined for Ukraine. However, NSC had not named any companies that could possibly be involved in this peculiar supply chain. It is also important to note that such information has only been unilaterally confirmed by the U.S. government.
Two U.S.-based think tanks, Beyond Parallel, part of the Center for Strategic and International Studies (CSIS) and 38North.org, part of the Stimson Centre for International Security, had confirmed increased rail transport activity between the two countries without sharing information about the possible type of transported cargo or involved companies.
PJSC TransContainer’s response
In any case, PJSC TransContainer is now included in the U.S. list of sanctioned companies due to the reasons mentioned above.
The Russian company released an official statement on the situation: “Taking into account the information about the inclusion of PJSC TransContainer in the sanctions list of the U.S. Treasury, PJSC TransContainer reports that the company’s operating activities are carried out as usual – the movement of trains in international and domestic traffic continues in compliance with schedules, the operation of the terminals is carried out in the established manner. PJSC TransContainer provides logistics services in full and in accordance with its obligations to customers on all existing routes and destinations”.
PJSC TransContainer has been primarily focusing on domestic and cross-border transportation to and from China in the last couple of years following the invasion of Ukraine and subsequent war. Recently, it also started expanding towards Central Asia with new services to Kazakhstan and Uzbekistan, among others and reported a successful year performance-wise.
What happens to the subsidiaries?
Currently, PJSC TransContainer’s subsidiaries based outside of Russia are not affected by the sanctions since they are isolated entities that deal with different markets. For instance, TransContainer Europe GmbH, based in Austria and dealing with the European market, will see no changes in its legal status and operations.
Additionally, whether the EU will also sanction PJSC TransContainer is still unclear. In general, the EU and U.S. align when it comes to sanctioning certain entities and companies. However, there are many instances where a company sanctioned by the U.S. has not been sanctioned by the EU.
So far, there has been no mention of PJSC TransContainer in any of the EU’s sanction packages. This does not exclude the possibility of being included in one of the upcoming sanction packages. Nevertheless, at the same time, it should not be taken for granted that the EU will sanction the Russia-based company.