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OFAC issues Russian sanctions, general licenses, and expanded E.O.s
On May 8, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced “sweeping” sanctions, which include the designations of board members from two of Russia’s most important banks, a Russian state-owned bank and 10 of its subsidiaries, a state-supported weapons manufacturer, and three of Russia’s state-controlled television stations that generate revenue for the state. OFAC also published a Determination Pursuant to Section 1(a)(i) of Executive Order (E.O.) 14024 and a Determination Pursuant To Section 1(a)(ii) Of E.O. 14071. According to OFAC's press release, the sanctions, issued pursuant to E.O. 14071, “cut off access to services that are used by the Russian Federation and Russian elites to evade sanctions.” OFAC identified accounting, trust and corporate formation, and management consulting as categories of services that are subject to a prohibition on the export, reexport, sale, or supply, directly or indirectly, from the U.S., or by a U.S. person, wherever located, to any person located in the Russian Federation. Additionally, OFAC determined that these same services sectors of the Russian Federation economy are subject to sanctions pursuant to E.O. 14024. OFAC also issued four Russia-related general licenses (GLs): (i) GL 25A authorizes transactions related to telecommunications and certain internet-based communications; GL 33 authorizes the wind down of operations or existing contracts involving certain blocked entities; GL 34 authorizes the wind down of accounting, trust and corporate formation, and management consulting services; and GL 35 authorizes transactions involving credit rating and auditing services. OFAC also issued a new frequently asked question clarifying transactions related to telecommunications and certain internet-based communications that involve Joint Stock Company Channel One Russia, Television Station Russia-1, or Joint Stock Company NTV Broadcasting Company authorized by Russia-related GL 25A.
OFAC also recently published amended Russia-related frequently asked questions 1034, 1035, and 1038 clarifying, among other things, (i) terms related to Executive Order (E.O.) 14071’s prohibition on certain accounting, trust and corporate formation, and management consulting services; (ii) what “credit rating services” and “auditing services” mean under General License 35; and (iii) certain activities related to products and services in or involving the Russian Federation in relation to E.O. 14024.
Find continuing InfoBytes coverage on the U.S. sanctions response to Russia’s invasion of Ukraine here.