On December 30, 2014, the Office of Foreign Assets Control (“OFAC”) issued General License No. 5 to authorize certain otherwise prohibited activities necessary to wind down operations involving the Crimea region of Ukraine, which has been occupied by Russia since March 2014. OFAC’s announcement is available here.
The general license follows the December 19, 2014 issuance of Executive Order 13685, which imposed comprehensive sanctions on Crimea and provided the authority for blocking certain persons in connection with the situation in Crimea, as detailed in our recent post.
Specifically, General License No. 5 authorizes all transactions and activities prohibited under Executive Order 13685 that are ordinarily incident and necessary to the:
· Winding down or divestiture or transfer to a foreign person of a U.S. Person’s share of ownership, including an equity interest, in pre-December 20, 2014 investments located in Crimea;
· Winding down of operations, contracts, or other agreements that were in effect prior to December 20, 2014, involving the exportation, reexportation, sale, or supply of goods, services, or technology to Crimea; or
· Winding down of operations, contracts, or other agreements that were in effect prior to December 20, 2014, involving the importation of any goods, services, or technology from Crimea into the United States.
Under General License No. 5, such transactions and activities are authorized through February 1, 2015. U.S. Persons participating in such transactions must file a report with OFAC detailing the wind-down activities within 10 business days after the conclusion of authorized activities. The use of General License No. 5 is subject to certain conditions, including a prohibition on any transactions or dealings with any specially designated nationals (aka “SDNs”).
