The Non-SDN Menu-Based Sanctions List
On December 14, 2020, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) published a new Non-SDN Menu-Based Sanctions List (“NS-MBS List”). The NS-MBS List is not the result of new sanctions but rather is designed as a reference tool to identify persons subject to certain non-blocking menu-based sanctions, including certain sanctions described in Section 235 of the Countering America’s Adversaries Through Sanctions Act (“CAATSA”), as implemented by Executive Order 13849, and the Ukraine Freedom Support Act of 2014, as amended by CAATSA.
The NS-MBS List is distinct from OFAC’s List of Specially Designated Nationals and Blocked Persons (“SDN List”) or OFAC’s List of Foreign Financial Institutions Subject to Correspondent Account or Payable-Through Account Sanctions (“CAPTA List”). When asset blocking is chosen as a menu-based sanction and imposed on a person, that person is identified solely on the SDN List with any other non-blocking menu-based sanctions imposed on that person also identified on the SDN List entry. When only non-blocking menu-based sanctions are imposed on a person, that person will be placed on the NS-MBS List. In addition to the sanctioned person’s name and other relevant identifiers, the NS-MBS List will also specify the sanctions measures imposed and the legal authority for the sanctions.
The information available in the NS-MBS List is included in the data associated with OFAC’s Consolidated Sanctions List, and a search of that list will therefore include a search of the NS-MBS List.
The State Department and OFAC Sanction Turkey’s Presidency of Defense Industries for Weapon Procurement from Russia
On December 14, 2020, OFAC also imposed non-blocking menu-based sanctions on the Republic of Turkey’s Presidency of Defense Industries (“SSB”), Turkey’s primary defense procurement entity with responsibilities in defense industrial development. SSB was sanctioned pursuant to Section 231 of CAATSA for knowingly engaging in a significant transaction with Rosoboronexport (“ROE”), Russia’s main arms export entity, by procuring the S-400 surface-to-air missile system. Section 231 of CAATSA requires the imposition of at least five of the twelve sanctions described in Section 235 of CAATSA on any person determined to have knowingly engaged in a significant transaction with a person that is a part of, or operates for or on behalf of, the defense or intelligence sectors of the Russian government. ROE is identified on the CAATSA “List of Specified Persons” (“LSP”) for operating on behalf of the defense sector of the Russian government.
The State Department, in consultation with OFAC, has imposed the following non-blocking menu-based sanctions on SSB, which is the first and only entity on the NS-MBS List to date:
- a prohibition on loans or credits by US financial institutions to SSB totaling more than $10 million in any 12-month period (Section 235(a)(3));
- a prohibition on granting specific US export licenses and authorizations for any goods or technology transferred to SSB (Section 235(a)(2));
- a ban on US Export-Import Bank assistance for exports to SSB (Section 235(a)(1));
- a requirement for the United States to oppose loans benefitting SSB by international financial institutions (Section 235(a)(4)); and
- the imposition of full asset blocking and visa restrictions (Section 235(a)(7), (8), (9), (11), and (12)) on four of SSB’s principal executive officials, including the president and vice president. These four individuals have been added to the SDN List with the chosen menu-based sanctions listed in their respective SDN List entries.
In its press release, the US Department of Statement indicated that the sanctions are not intended to undermine the military capabilities or combat readiness of Turkey or any other US ally or partner, but rather to impose costs on Russia “in response to its wide range of malign activities.”