OFAC Sanctions Russian Individuals and Entities "Critical" to War; Issues General Licenses and Guidance

OFAC took a series of actions targeted at "individuals and entities critical to Russia's ability to wage war against Ukraine." In connection with these actions, OFAC published four new General Licenses, two new Executive Order Determinations and a set of FAQs.

Russian individuals and entities added to OFAC's Specially Designated Nationals and Blocked Persons List include, among others: (i) the board members of two of Russia's most significant banks; (ii) a state-owned bank and its subsidiaries; (iii) a state-supported weapons producer; and (iv) three state-controlled television stations. OFAC also took measures to eliminate services used by the Russian government and Russian elites to evade sanctions.

The four new General Licenses, issued under the "Russian Harmful Foreign Activities Sanctions Regulations" (31 CFR Part 587), include:

  • General License No. 25A, authorizing all transactions pertaining to the receipt or transmission of telecommunications involving the Russian Federation and the sale and export of services, software, hardware, or technology related to internet-based communications;

  • General License No. 33, authorizing the wind-down of operations involving certain designated Russian telecommunications companies pursuant to E.O. 14024, through June 7, 2022;

  • General License No. 34, authorizing the wind-down of accounting, trust and corporate formation and management consulting services to Russian-related enterprises, through July 7, 2022; and

  • General License No. 35, authorizing certain transactions involving credit rating and auditing services that are otherwise prohibited, through August 20, 2022.

Additionally, OFAC issued two determinations. The first, under Section 1(a)(i) of Executive Order 14024, applies the provisions of the Executive Order to the accounting, trust and corporate formation services, and management consulting services sectors of the Russian economy. Accordingly, any person that the Secretary of the Treasury determines operates or has operated in such sectors shall be subject to sanctions. The second, under Section 1(a)(ii) of Executive Order 14071, prohibits the export to Russia of accounting, trust and corporate formation services, and management consulting services.

The new FAQs clarified the types of transactions that U.S. persons are authorized to engage in with certain Russian telecommunications companies. The new FAQs also provided further clarification on the meaning of certain terms, including "accounting sector," "trust and corporate formation services sector" and "management consulting sector."

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