Key Takeaways:
- U.S. augments current sanctions on Russia by designating additional entities that help facilitate Russia's war against Ukraine, including Russian defense, high-technology, chemical, and mining companies, as well as five Russian financial institutions.
- OFAC issued General Licenses No. 70 and 71 to authorize the wind-down and rejection of certain transactions involving some of the newly-sanctioned entities.
On July 20, 2023, the Department of Treasury's Office of
Foreign Asset Control ("OFAC") designated additional
entities in order to further disrupt Russian access to military
supplies and deprive the Russian government of revenue to fund the
war.
OFAC designated Russian entities that directly aid Russia's war
against Ukraine. These entities manufacture goods for the defense
and material sector, operate in key industries (such as aerospace,
quantum technologies, and advanced computing), or conduct research
and development related to high-technology goods. Certain entities
in the metals and mining industry, manufacturers in the energy
industry, and an investment house that focuses on extractive
industries were blocked as well. To combat sanctions evasion, OFAC
targeted several Kyrgyz Republic-based entities as frequent
exporters of controlled electronics components and other technology
to Russia since the invasion.
Furthermore, five Russian financial institutions were designated to
constrain Russia's ability to access the global financial
market. These include:
- Joint Stock Company Locko Bank
- Joint Stock Company Petersburg Social Commercial Bank
- Joint Stock Company Commercial Bank Solidarnost
- JSC Tinkoff Bank (Tinkoff Bank)
- Unistream Commercial Bank JSC
General Licenses
OFAC concurrently issued two General Licenses to authorize certain
prohibited activities in connection with the July 20, 2023
designations. U.S. persons are authorized, until 12:01 a.m. eastern
daylight time, October 18, 2023, to engage in all transactions
ordinarily incident and necessary to the wind down of any
transaction with the following entities:
- Joint Stock Company Ural Mining and Metallurgical Company ("UMMC"), or any entity owned 50 percent or more, directly or indirectly, by UMMC (subject to certain restrictions such as the prohibitions found in Directives 2 and 4 of E.O. 14024 and in accordance with the Russian Harmful Foreign Activities Sanctions Regulations) (General License No. 70).
- Joint Stock Company Petersburg Social Commercial Bank, Joint Stock Company Locko Bank, Unistream Commercial Bank JSC, Joint Stock Company Commercial Bank Solidarnost, JSC Tinkoff Bank, or any entity in which one or more of these persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest (subject to certain restrictions such as the prohibitions found in Directive 2 of E.O. 14024, a prohibition against any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation, and in accordance with the Russian Harmful Foreign Activities Sanctions Regulations) (General License No. 71).
General License No. 71 also authorizes U.S. persons to reject, rather than block, and return to the originator, originating financial institution, or their successor-in-interest, all transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the processing of funds involving one or more of the five blocked financial institutions as an originating, intermediary, or beneficiary financial institution, through 12:01 a.m. eastern daylight time, October 18, 2023.
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