On March 24, 2023, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued a final rule amending and reissuing the Belarus Sanctions Regulations, 31 CFR part 548 (the “Regulations”), to implement Executive Order (“EO”) 14038, including Directive 1 issued pursuant to EO 14038. The final rule is effective as of March 27, 2023.
OFAC had previously sanctioned certain Belarussian parties as a result of Belarus’ support for and facilitation of Russia’s invasion of Ukraine. For more information on these designations and other Belarus-specific restrictions, please see our prior blog post here.
Background on EO 14038 and Directive 1
On August 9, 2021, President Biden issued EO 14038 “Blocking Property of Additional Persons Contributing to the Situation in Belarus”, expanding sanctions against Belarus due to the US Government’s concerns related to its harmful activities aimed at suppressing democracy and human rights in the country. OFAC had also issued Directive 1 pursuant to EO 14038 prohibiting US Persons from dealings in new debt with a maturity of greater than 90 days issued on or after December 2, 2021 by the Ministry of Finance (“Ministry”) or the Development Bank of Belarus (“DBB”). Directive 1 does not prohibit any other activities involving the Ministry or the DBB, or their property or interests in property. This restriction also does not extend to entities owned 50% or more by the Ministry or DBB. These have now been incorporated into the Regulations.
Amendments to the Regulations
In addition to updating the Regulations to confirm with EO 14038 and Directive 1, OFAC also made the following key amendments to the Regulations:
- Removing license requirement for legal services payments. OFAC updated its statement on its licensing policy, including removing the requirement that payment for legal services be specifically licensed. OFAC is adding a new authorization for payment for legal services from funds originating outside the United States.
- Removing license requirement for certain emergency medical services.
- Adding General License 3 to the Regulations: OFAC is also incorporating Belarus General License 3 to the Regulations, which authorizes certain transactions with the State Security Committee of the Republic of Belarus and was previously issued on OFAC’s website on June 21, 2021 and will be removed from the website upon publication of this rule.
- New Authority Delegation: Lastly, OFAC amended section 548.802 of the Regulations to add the delegation of the Director of OFAC or by other authorized parties the Secretary of the Treasury Department can delegate with certain authorities with respect to EO 14038.