1050. What types of transactions are considered to be “maintenance” activities described in FAQ 1049 and therefore outside the scope of the “new investment” prohibitions of Russia-related Executive Order (E.O.) 14066, E.O. 14068, or E.O. 14071 (collectively, “the respective E.O.s”)?
For the purposes of the respective E.O. prohibitions, “new investment” generally excludes the maintenance of investments in the Russian Federation that were made prior to the effective dates of the respective E.O. prohibitions (“pre-existing projects or operations”). “Maintenance” of investments includes:
• Transactions to ensure continuity of pre-existing projects or operations located in the Russian Federation, including payments to employees, suppliers, landlords, lenders, and partners;
• The preservation and upkeep of pre-existing tangible property in the Russian Federation; and
• Activities associated with maintaining pre-existing capital investments or equity investments.
As a general matter, “maintenance” includes all transactions ordinarily incident to performing under...
1) These key FAQs describe the ad-hoc "maintenance" exclusion to the “new investment” prohibition, which exist as a distinct ad-hoc exclusion from the exclusion for transactions “related to divestment” (see FAQ 1053).
2) The maintenance FAQs raise a number of interpretive questions. Of particular note:
(i) Does the exclusion for “maintenance” apply, in practice, to “all transactions ordinarily incident to” covered maintenance activities as if there were a general license for all transactions otherwise prohibited that qualify for OFAC’s definition of “maintenance” and were prohibited solely by the “new investment” prohibition?
(ii) Does the limitation of the maintenance exclusion for “expansion” of pre-existing projects apply solely with respect to the intent of the otherwise prohibited commitment of assets at the time they were committed?
(iii) Is the reinvestment of profits from a pre-existing entity necessarily covered under the...