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State Tech Chief Reminds Agencies About Compliance With Russia Sanctions

Departments should direct all contractors with agreements valued at $5 million or more to desist from “making new investments in, or engaging in financial transactions with, Russian entities, not transferring technology to Russia or Russian entities, and directly providing support to the government and people of Ukraine.”

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The state’s IT chief issued a letter Tuesday to state agencies reminding them that they need to follow Gov. Gavin Newsom’s executive order relating to doing business with Russian individuals and entities sanctioned by the state and federal governments.

Russ Nichols.
Russ Nichols, acting state chief information officer
Newsom’s executive order (EO) “directs all agencies and departments that are subject to the governor’s authority to take certain steps to ensure they are in compliance with the economic sanctions imposed under state law,” says the Technology Letter, which is signed by Russ Nichols, the state’s acting chief information officer and acting director of the California Department of Technology.

The letter refers to Newsom’s March 4 order, which directs that “all agencies and departments subject to my authority shall review all contracts for commodities, services and technology to determine whether they comply with existing economic sanctions,” referring to sanctions imposed by the U.S. government “in response to Russia’s actions in Ukraine, as well as any sanctions imposed under state law.”

The executive order also says, “All agencies and departments subject to my authority shall terminate any contracts with any individuals or entities that are determined to be a target of economic sanctions, and shall refrain from entering into any new contracts with such individuals or entities while economic sanctions are in effect.”

The order then spells out how state agencies should comply with these orders:
  • Agencies must identify any contracts they have with individuals or entities that are determined to be a target of economic sanctions and begin assessments with their legal counsel regarding terminations of such contracts.
  • Agencies should keep a list of all contracts terminated in accordance with the EO, including the name of the contractor, contract number, contract amount, contract type, contract term, the specific reason for termination and the termination date.
  • Agencies shall refrain from entering into any new contracts with individuals and entities that are determined to be a target of economic sanctions, while such economic sanctions are in effect.

State agencies have until April 18 to notify all contractors and grantees.

Newsom’s order also says agencies and departments should direct all contractors with agreements valued at $5 million or more to report on “steps they have taken in response to Russia’s actions in Ukraine, including, but not limited to, desisting from making new investments in, or engaging in financial transactions with, Russian entities, not transferring technology to Russia or Russian entities, and directly providing support to the government and people of Ukraine.”

The California Department of General Services has posted links to informational resources, including a template for a letter that can be sent to contractors.
Dennis Noone is Executive Editor of Industry Insider. He is a career journalist, having worked as a reporter and editor at small-town newspapers and major metropolitan dailies in California, Nevada, Texas and Virginia, including as an editor with USA Today in Washington, D.C. He lives in Northern California.