Washington, D.C. (November 29, 2022) – In recent weeks, U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) has issued several general licenses that provide limited exceptions to certain activities that have been prohibited under various Executive Orders (E.O.s). Many U.S. persons and industries have been affected by these prohibitions and the logistical difficulties they have caused. These licenses will provide some relief to those affected, while still safeguarding the national security interests protected by the sanctions.
General License No. 53
On November 10, 2022, OFAC issued General License No. 53, Authorizing Transactions for Diplomatic Missions of the Russian Federation Prohibited by Directive 4, under Executive Order 14024. Directive 4 prohibits any transactions involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation, all of which were determined to be political subdivisions, agencies, or instrumentalities of the Government of the Russian Federation. General License No. 53 authorizes U.S. persons to engage in all transactions "ordinarily incident and necessary to the official business of diplomatic or consular missions of the Government of the Russian Federation," with certain exceptions.
OFAC FAQ 1096 provides an example of a transaction ordinarily incident and necessary to the official business of diplomatic or consular missions of the Russian Federation. In this example, General License No. 53 authorizes the payment of salaries to employees of Russian missions, such as a payment originated by the Ministry of Finance of the Russian Federation from a non-blocked Russian bank.
General License No. 8D
Also on November 10, 2022, OFAC issued General License No. 8D, Authorizing Transactions Related to Energy. The license broadly defines the term "related to energy" to include "the extraction, production, refinement, liquefaction, gasification, regasification, conversion, enrichment, fabrication, transport, or purchase of petroleum products, natural gas, or other products capable of producing energy, such as coal, wood, or agricultural products used to manufacture biofuels, or uranium in any form, as well as the development, production, generation, transmission, or exchange of power, through any means, including nuclear, thermal, and renewable energy sources."
General License 8D, which supersedes General License 8C, extends the winding down period on these energy related transactions that were previously prohibited by E.O. 14024 until May 15, 2023 (previously December 5, 2022). Specifically, General License 8D permits transactions related to energy involving one or more of six specified Russian entities, along with "any entity in which one or more of the [aforementioned] persons owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest," or the Central Bank of the Russian Federation.
General License No. 40C
On November 14, 2022, OFAC issued General License 40C, Civil Aviation Safety. This license permits "all transactions ordinarily incident and necessary to the provision, exportation, or reexportation of goods, technology, or services to ensure the safety of civil aviation involving one or more of the [specified] blocked entities," provided the aircraft is registered outside of the Russian Federation and the goods, technology, or services are for use on an aircraft operated solely for civil aviation purposes.
General License 40C replaces 40B, permitting transactions with one additional blocked entity (Emperor Aviation LTD).
General License No. 21
On November 15, 2022, OFAC issued General License 21, Authorizing Limited Safety and Environmental Transactions Involving Certain Vessels, allowing certain exceptions to the Global Terrorism Sanctions Regulations through 12:01 a.m. (EST) on December 15, 2022. Specifically, General License 21 permits transactions with specified vessels that are ordinarily incident and necessary to the safe docking and anchoring of the blocked vessels in port, the preservation of the health or safety of the crew of any of the blocked vessels, and emergency repairs of any of the blocked vessels or related environmental mitigation or protection activities.
At the same time, OFAC issued a FAQ related to this license. FAQ 1097 further explains that General License 21 does not authorize the offloading of any cargo onboard these vessels.
General License No. 54
On November 18, 2022, OFAC issued another license, General License 54, Authorizing Certain Transactions Involving VEON Ltd. Prohibited by Executive Order 14071, which allows "all transactions ordinarily incident and necessary to the purchase or receipt of any debt or equity securities of VEON Ltd," provided the securities were issued prior to June 6, 2022. VEON is a global digital provider, and the General License was intended to reassure market participants that trade in these securities is consistent with E.O. 14071, which prohibited new investment in Russia.
General License No. 13C
Most recently, on November 21, 2022, OFAC issued General License 13C, Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024. This license permits U.S. persons and entities to "pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, or certifications, to the extent such transactions are prohibited by Directive 4 under E.O. 14024," through 12:01 a.m. (EST) March 7, 2023, superseding the December 7, 2022, deadline imposed by General License 13B. Directive 4, described above, prohibits transactions involving certain political subdivisions, agencies, or instrumentalities of the Government of the Russian Federation.
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