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1129. Do blocking sanctions issued by the State Department on May 19, 2023 on Polimetall AO apply to its corporate parent and affiliates?
On May 19, 2023, the Department of State designated Russia-based Polimetall AO pursuant to Executive Order (E.O.) 14024. These blocking sanctions apply only to this entity and any entities in which it owns, directly or indirectly, a 50 percent or greater interest.
Neither the Department of State nor OFAC have designated this entity’s ultimate parent company, Jersey-based Polymetal International PLC, and based on information available to OFAC, Polymetal International PLC is not owned 50 percent or more by blocked persons or otherwise considered the blocked property of any blocked persons. U.S. persons, therefore, are not prohibited from dealing with Polymetal International PLC, its non-blocked subsidiaries, or non-blocked affiliates to the extent the proposed dealings do not involve any blocked person, any...
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1) Compare FAQ # 1073, FAQ # 1074, FAQ # 1075, FAQ # 1104 and FAQ # 1131, which are similar FAQs seeking to provide comfort with respect to the non-blocked status of an entity related to a person blocked concurrent with the issuance of the FAQ. Here, OFAC does not exactly break new legal ground; the FAQ is consistent with OFAC's practice of applying the 50% Rule downward in the corporate chain, rather than upward or horizontally. Still, it is notable that OFAC is willing to explicitly take the position that, non-applicability of the 50% Rule notwithstanding, a subsidiary does not have an "interest" in transactions of a parent. Compare Case No. SDGT-1051 (USP can wire money to a non-blocked head office of an NGO of which a branch is an SDN)....