The U.S. Treasury Department Office of Foreign Assets Control ("OFAC") issued two new FAQs to clarify the definition of the term "maintenance," as used in General Licenses 14, 15 and 16 under the Ukraine-Related Sanctions Regulations. These general licenses were issued in connection with blocking sanctions imposed on April 6, 2018, and generally permit transactions ordinarily incident to the maintenance or wind-down of previously existing operations, contracts or other agreements with specified sanctioned companies.
In two new FAQs, OFAC explained that the "authorization for 'maintenance' generally includes all transactions and activities ordinarily incident to performing under a contract or agreement in effect prior to April 6, 2018, provided that the level of performance is consistent with the terms of the general license and consistent with past practices that existed between the party and the blocked entity prior to April 6, 2018." In addition, "maintenance" activities may be authorized in the absence of a contract or agreement in effect prior to April 6, if consistent with past practices that existed between the parties before that date. Stockpiling, however, would not be permitted "unless the transaction history indicates that the scope and extent of maintaining inventory is consistent with past practice between the party and the blocked entity."
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