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OFAC sanctions Russian diamond mining and shipbuilding companies, and issues general licenses
On April 7, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions, pursuant to Executive Order 14024, against a Russian state-owned enterprise (SOE) and the world’s largest diamond mining company, which is also responsible for 90 percent of Russia’s diamond mining capacity. Additionally, the Department of State redesignated a Russian SOE open joint stock company, as well as its subsidiaries and board members. According to OFAC, the company develops and constructs most of the Russian military’s warships, likely including those used in Ukraine. OFAC further noted that it is “cutting off additional sources of support and revenue for the Government of the Russian Federation (GoR) to wage its unprovoked war against Ukraine.” As a result of the sanctions, all property and interests in property belonging to the sanctioned entities in the U.S. are blocked and must be reported to OFAC. Additionally, “any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.” OFAC noted that U.S. persons are prohibited from participating in transactions with the sanctioned persons, which includes “the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person or the receipt of any contribution or provision of funds, goods or services from any such person.”
On the same day, OFAC issued several Russia-related general licenses: (i) General License 9C authorizes “transactions related to dealings in certain debt or equity”; (ii) General License 10C authorizes “certain transactions related to derivative contracts”; (iii) General License 21A authorizes “the wind down of Sberbank CIB USA, Inc. and Alrosa USA, Inc.”; (vi) General License 24 authorizes “the wind down of transactions involving public joint stock company Alrosa”; and (v) General License 25 authorizes “transactions related to telecommunications and certain internet-based communications.”
Find continuing InfoBytes coverage on the U.S. sanctions response to Russia’s invasion of Ukraine here.