On March 24, 2022, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued two new and two reissued General Licenses and issued new and revised Frequently Asked Questions (FAQs). OFAC also added more than 400 parties to the Specially Designated Nationals and Blocked Persons List (“SDN List“). A summary of these developments can be found on OFAC’s Recent Actions page here and here.
New and Revised General Licenses
OFAC issued two new general licenses, as follows:
- Russia-related General License No. 20 authorizes US persons to engage in all transactions ordinarily incident and necessary to the official business of third-country diplomatic or consular missions located in the Russian Federation that are prohibited by Executive Order 14024 or section 1(a)(iv) of Executive Order 14068.
- Ukraine/Russia-related General License No. 25 authorizes news reporting organizations that are US persons, and individuals who are US persons regularly employed by a news reporting organization, either as journalists (including photojournalists) or as supporting broadcast or technical personnel, to engage in the following transactions in the Crimea region of Ukraine, the so-called Donetsk People’s Republic (DNR) or Luhansk People’s Republic (LNR) regions of Ukraine, or such other regions of Ukraine as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State (collectively, the “Covered Regions“):
- Hiring and compensating support staff in the Covered Regions (e.g., stringers, translators, interpreters, camera operators, technical experts, freelance producers, or drivers), persons to handle logistics, or other office personnel as needed
- Leasing or renting office space
- Purchasing, leasing, or renting Covered Regions-origin goods and services (e.g., mobile phones and related air time), selling such goods when no longer needed, or importing them into the United States
- Renting and using telecommunications facilities in the Covered Regions and paying fees or taxes related to the dissemination of information and transmission of news feeds (e.g., fees for satellite uplink facilities, or live news feeds)
- Exporting and reexporting to the Covered Regions, and subsequently reexporting from the Covered Regions, equipment necessary for and ordinarily incident to journalistic activities, provided such equipment is designated as EAR99 under the Export Administration Regulations, (EAR), and further provided that such equipment is reexported from the Covered Regions to the United States or a third country when no longer needed for journalistic activities in the Covered Regions
- Paying for all expenses ordinarily incident and necessary to journalistic activities, including sales or employment taxes
General License 25 does not authorize (1) any new investment in the Covered Regions prohibited by Executive Orders 13685 or 14065 other than as authorized in paragraphs (a) or (b), unless separately authorized; or (2) any transactions involving any person blocked pursuant to Executive Orders 13685 or 14065, unless separately authorized.
In addition, OFAC reissued General Licenses 6A and 17A.
- General License No. 6A expands the scope of the original General License authorizing certain transactions related to ongoing clinical trials and other medical research activities that were in effect prior to 24 March 2022.
- General License No. 17A extends the authorization window for transactions through 12:01 a.m. eastern daylight time on 23 June 2022 that are ordinarily incident and necessary to the import of Russian-origin fish, seafood, and preparations thereof, pursuant to written contracts entered into prior to 11 March 2022. Authorizations for transactions that are ordinarily incident and necessary to the import of Russian-origin alcoholic beverages and non-industrials diamonds were not extended in the reissued General License.
New and Revised Frequently Asked Questions
OFAC revised FAQs 1,023 and 1,024, and issued the new FAQ 1,029.
- The revised FAQ 1,023 was amended to clarify the change of dates for authorized transactions in the revised General License No. 17A.
- The revised FAQ 1,024 confirms that US persons are not prohibited from finding a new buyer for and/or redirecting shipments containing prohibited goods en route to the United States to another country under Executive Order 14068. The FAQ was amended to reflect the reissuance of General License 17.
- The new FAQ 1,029 clarifies that gold-related transactions involving Russia may be sanctionable under Executive Order 14024.
Additions to the SDN List
OFAC designated more than 400 Russian parties to the SDN List. Targets added to the SDN List include the State Duma of the Federal Assembly of the Russian Federation, 328 of its members, as well as other Russian elites and state-owned defense enterprises. As a result of these designations, US Persons are generally prohibited from dealing directly or indirectly with SDNs, entities that are owned 50% or more by one or more SDNs, and their property or property interests. Non-US persons can be held liable for “causing” violations by US Persons involving transactions with SDNs and can also be subject to secondary sanctions risks (which would include, in particular, the risk of designation as an SDN themselves) for providing “material support” to SDNs. The White House issued a fact sheet and OFAC issued a press release on the new designations.
The authors acknowledge the assistance of Ryan Orange in the preparation of this blog post.