OFAC FAQ (Current) # 1113 - Russian Harmful Foreign Activities Sanctions

Date issued: Feb. 08 2023

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TURBOFAC Commentary (192 words)

Notes:

1) OFAC doesn't explain it's reasoning for the "new investment" conclusion, but it appears to constitute a determination that, where a recipient of shares by operation of law receives such shares in the absence of an "exchange for value," the receipt of the shares does not constitute "investment," as the term was defined in FAQ # 1049. More specifically, FAQ # 1049 says that "views 'investment' as the commitment of capital or other assets for the purpose of generating returns or appreciation." In an ordinary inheritance situation, transfer of the estate occur by operation of law, and with no "exchange for value". Here, "exchange for value" appears to stand in for "commitment of capital or other assets". The "purpose of generating returns or appreciation" would, on the other hand, be present. (See generally section II of the Russia-related New Investment System Note). ...