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OFAC FAQ (Current) # 1080 - Russian Harmful Foreign Activities Sanctions

Date issued: Sep. 15 2022

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1080. I am a U.S. person with an account at a Russian financial institution blocked pursuant to Executive Order (E.O.) 14024. What am I required or allowed to do under OFAC sanctions with respect to such accounts?

Since Russia’s further invasion of Ukraine beginning in February 2022, OFAC has blocked a number of Russian financial institutions pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy (see FAQ 966). In addition, all property and interests in property of any financial institution that is owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Accordingly, U.S. persons are prohibited from transacting with these financial institutions unless the activity is exempt or authorized by OFAC.

In practice, this means that accounts held by U.S. persons...

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TURBOFAC Commentary (385 words)

Notes:

1) IMPLICIT “POSSESSION OR CONTROL” STATEMENT; THE DEFINITION OF “BLOCKED PROPERTY’

501.603 of the RPPR only applies to “blocked property,” and “blocked property” is property within the “possession or control” of a U.S. person. OFAC states that “[i]n practice,” Russian banks being blocked “means that accounts held by U.S. persons at any blocked Russian financial institutions generally are themselves considered blocked property, unless exempt.” What OFAC appears to be saying here is that when an account at a foreign bank is “held” by a U.S. person, it qualifies as being within the “possession or control” of the account holder (at least “generally”). The circumstances in which this may not be the case may include those in which the account holder is prohibited under Russian law from taking any action with respect to the account.