New Jersey Narrowly Defines Anti-Russia Law, Following Kyocera Court Win

Trenton, New Jersey – New Jersey’s controversial law aimed at imposing state-level sanctions on Russian-backed companies has been significantly scaled back after a federal court ruling. The law, which initially had wide-ranging implications, sparked a legal battle when it ensnared the American subsidiary of Japanese electronics company Kyocera. However, U.S. District Court Judge Robert Kirsch issued a permanent injunction in December, deeming the state’s efforts to blacklist Kyocera unconstitutional. While Kirsch did not strike down the law entirely, he stated that it could be constitutional if applied to companies facing federal sanctions.

In response to the court ruling, the state’s Treasury department quietly updated its website this week, stating that it would interpret the law in line with Kirsch’s decision. As a result, New Jersey’s sanctions list will now align with the U.S. Treasury’s Specially Designated Nationals and Blocked Persons list for Russia and Belarus. The state believes this enforcement is consistent with the court’s opinion and federal law.

This interpretation of the law significantly narrows its scope, prompting criticism that it simply mandates state agencies to follow existing federal law. Daniel Tannebaum, a former U.S. Treasury official, argues that the state should already be matching federal sanctions. He points out that states are prohibited from doing business with federally sanctioned individuals or entities, a requirement that has always been in place.

The Murphy administration, led by Governor Phil Murphy, chose not to appeal the court ruling in favor of Kyocera, likely recognizing the uphill legal battle. Previous cases, such as a Massachusetts law targeting businesses associated with Myanmar and a Florida law restricting state contracts with companies connected to Cuba, were struck down in court. Consequently, JPMorgan Chase, Xerox, and a leading turf field supplier in the state, all potentially subject to state-level sanctions, will no longer face that concern. However, the Treasury department declined to comment on the status of these companies.

The swift passage of the law, going from introduction in the Legislature to enactment in less than 10 days, marks a timeline that raises eyebrows. Governor Murphy’s office declined to comment on the matter, instead referring to the Treasury’s notice. Kyocera, the central player in the legal battle, has also refrained from commenting. The company was represented in court by former state Attorney General Chris Porrino and former state Supreme Court Justice Barry Albin.

The revised interpretation of New Jersey’s anti-Russia law carries significant implications for companies operating in the state, aligning state-level sanctions with federal measures. The court’s ruling has brought clarity to the law, but it remains to be seen how these developments will impact the broader landscape of economic relations between New Jersey and Russia.

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