On August 19, 2022, the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) replaced existing General License (“GL”) 38 with GL 38A and issued a new GL 50. These GLs authorize certain activities otherwise prohibited by EO 14024, which targets, among other things, specific sectors (including the financial services sector) of the Russian economy. Our prior blog post regarding EO 14024 and the financial sanctions imposed thereunder can be found here, here, here, and here. The content of the two GLs is summarized below.
As explained in detail in our prior blog post, GL 38 authorizes all transactions ordinarily incident and necessary to the processing of pension payments to US Persons to the extent otherwise prohibited by Executive Order (“EO”) 14024. The only substantive change made by GL 38A to GL 38 is that GL 38A expanded the authorization under GL 38 to also cover transactions related to the processing of pension payments to non-US persons outside of Russia. This expanded authorization is subject to the same conditions and limitations prescribed in GL 38.
GL 50 authorizes all transactions that are ordinarily incident and necessary to (1) the closing of a non-blocked/non-SDN individual’s account at a financial institution blocked pursuant to EO 14024 and (2) the unblocking and lump sum transfer of all remaining funds and other assets in the closed account to the non-blocked/non-SDN individual, including to the non-blocked/non-SDN individual’s other account at a non-blocked/non-SDN financial institution. GL 50 specifically excludes certain transactions from the scope of the authorization, such as the opening or maintaining of a correspondent or payable-through account for or on behalf of any entity subject to Directive 2 under EO 14024 or transactions prohibited by Directive 4 under EO14024.