OFAC Targets Additional Entities Crucial to Russia's War Effort
OFAC issued two determinations related to the Russian quantum computer sector and two General Licenses ("GLs") concerning (i) the wind down of transactions with a certain Russian entities and (ii) activities related to "journalistic activities and the establishment of news bureaus. OFAC also designated 22 individuals and two entities, including a paramilitary group supporting Russian combat in Ukraine, and seven new FAQs and five amended FAQs.
The first determination, which was issued pursuant to Section 1(a)(i) of EO 14024, expands the scope of the EO to include the quantum computing sector of the Russian Federation economy. It permits OFAC to impose sanctions on anyone found to be operating in this sector. The second determination was issued pursuant to Section 1(a)(ii), Section 1(b) and Section 5 of EO 14071 and expands the scope of prohibited services in the EO to include quantum computing services. Beginning on October 15, 2022, U.S. persons will be prohibited from exporting, re-exporting, selling or supplying quantum computing services to any person located in the Russian Federation.
The first GL, General License No. 51, authorizes any transaction necessary to the wind down of engagement with the Limited Liability Company Group of Companies Akvarius or any of its affiliates through 12:01 a.m. EST on October 15, 2022. The GL provides that any payment to a designated entity must be made into a designated account connected to that entity in compliance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587.
The second GL, General License No. 52, allows activities ordinarily incident and necessary to a U.S.-affiliated journalist regarding the establishment or operation of a news bureau otherwise prohibited by EO 14024 ("Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian Federation") or EO 14071 ("Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression").
The newly published and updated FAQs provide clarity on the restrictions placed on the quantum computing services industry and how relevant parties can ensure compliance with the new rules.