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8 January 2021

OFAC Issues New And Amended Guidance On CAATSA

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OFAC issued new and amended Ukraine-/Russia-related guidance under the Countering America's Adversaries Through Sanctions Act.
Global International Law

OFAC issued new and amended Ukraine-/Russia-related guidance under the Countering America's Adversaries Through Sanctions Act ("CAATSA"), as implemented by Executive Order 13849.

In FAQ 869, OFAC explained the application of OFAC's "50 Percent Rule" imposed under CAATSA section 235(a) ("Sanctions"). If a sanctioned person owns 50 percent or more of another company (the "subsidiary"), and the owner is subject to sanctions described in section 235(a)(1-8) and (10-11) of CAATSA (which impose "non-blocking sanctions"), then the subsidiary is not automatically subject to the same sanctions. If a person is subject to sanctions under section 235(a)(9) of CAATSA, which blocks the property of the sanctioned person, then its subsidiary is also blocked.

FAQ 869 also detailed how principal executive officers are sanctioned under section 235(a)(12) of CAATSA.

In FAQ 870, OFAC clarified that - pursuant to section 235(a)(3) of CAATSA - U.S. financial institutions are prohibited from making loans or providing credits totaling more than $10,000,000 in any 12-month period for a person added to the Non-SDN Menu-Based Sanctions List. This limit excludes loans or credit provided to the identified person for activities "to relieve human suffering."

OFAC also made technical corrections to FAQ 545 and FAQ 546.

Primary Sources

  1. OFAC FAQ: Ukraine-/Russia-Related Sanctions - 869
  2. OFAC FAQ: Ukraine-/Russia-Related Sanctions - 870
  3. OFAC FAQ: Ukraine-/Russia-Related Sanctions - 545
  4. OFAC FAQ: Ukraine-/Russia-Related Sanctions - 546

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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