OFAC FAQ (Current) # 1054 - Russian Harmful Foreign Activities Sanctions (PDF contains all versions)

Date issued: Jan. 17 2023

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TURBOFAC Commentary (707 words)

Notes:

1) Compare FAQ # 1005, which was amended concurrent with the initial issuance of this FAQ to "clarify" that secondary market trading in pre-existing Russian securities was prohibited by the new investment ban.

2) The relationship between this FAQ and the "maintenance" exclusion to the new investment prohibition is uncertain, and involves a number of important interpretive questions.

Does the exercise of pre-existing call options, rights under warrants, etc., constitute “maintenance,” to the extent that it otherwise constitutes “investment”? What about the restructuring of debt in general, including when a debtor gets new assets in return for debt? Does it matter if the debt restructured is a convertible note that contemplates the conversion of the debt to equity?

The issuance of Russia-related General License 45 suggests that much of this may be within the scope of the new...