OFAC adds sanctions, transactional carve-outs for Russia, Ukraine

The Treasury Department’s Office of Foreign Assets Control (OFAC) on Friday added over three dozen Russian and Ukrainian individual and entity designations pursuant to a sanctions statute enacted in August.    The U.S Treasury Department’s Office of Foreign Assets Control (OFAC) on Friday added several sanctions in the form of new designations of mostly Russian and Ukrainian individuals and entities on its specially designated nationals (SDN) list, and added two general licenses authorizing certain financial actions, including to end existing business relationships.
   OFAC added 24 individual designations and 13 entity designations for Russia and Ukraine to its SDN sanctions list pursuant to the Countering America’s Adversaries Through Sanctions Act (CAATSA), added two Kingpin Act individual designations and one Kingpin Act entity designation, as well as two Syria entity designations.
   Rosoboroneksport OAO, a Moscow-based military equipment manufacturer, is included under both Syria and Russia/Ukraine designations.
   OFAC also issued General License No. 12 (GL 12), “Authorizing Certain Activities Necessary to Maintenance or Wind Down of Operations or Existing Contracts.”
   The license allows all transactions and activities in effect before April 6 that are otherwise prohibited by the Ukraine Related Sanctions Regulations in 31 CFR Part 589, and are ordinarily incident and necessary to “the maintenance or wind down” of certain business activities, including imports into the U.S., to take place with 12 entities named by the license through 12:01 a.m. June 5.
   The license also clarifies that such transactions can take place with any other entity in which one or more of those 12 companies directly or indirectly own a 50 percent or greater interest.
   Any payment to or for the direct or indirect benefit of a blocked person ordinarily incident and necessary to give effect to a transaction authorized by the general license “must be made into a blocked, interest-bearing account located in the United States,” in accordance with U.S. law governing the holding of funds in interest-bearing accounts (31 CFR 589.203).
   GL 12 clarifies that it doesn’t authorize U.S. exports, and that U.S. persons participating in transactions authorized by the license are required within 10 business days of its expiration to file a detailed report of each transaction, including names and addresses of involved parties, the type and scope of conducted activities, and the dates on which the activities occurred.
   OFAC also released General License No. 13 (GL 13), “Authorizing Certain Transactions Necessary to Divest or Transfer Debt, Equity, or Other Holdings in Certain Blocked Persons.”
   That license allows all transactions and activities that are otherwise prohibited by the Ukraine Related Sanctions Regulations in 31 CFR Part 589, and are ordinarily incident and necessary to transfer debt, equity, or other holdings, to take place with three entities named by the license through 12:01 a.m. May 7.
   Similar to GL 12, GL 13 requires U.S. persons participating in eligible transactions to file detailed transaction reports within 10 business days of the license’s expiration.