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OFAC FAQ (Current) # 973 - Russian Harmful Foreign Activities Sanctions

Date issued: Dec. 22 2023

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973. I am a U.S. individual or company that maintains an account at a foreign financial institution sanctioned pursuant to Directive 2 under Executive Order (E.O.) 14024. What are my obligations?

With respect to foreign financial institutions subject to the prohibitions of Directive 2 under E.O. 14024, “Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions” (Russia-related CAPTA Directive), including Public Joint Stock Company Sberbank of Russia, obligations under this directive apply to U.S. financial institutions only. U.S. individuals and companies that are not “U.S. financial institutions,” as defined in the Russia-related CAPTA Directive, are not prohibited from processing transactions involving foreign financial institutions solely subject to the Russia-related CAPTA Directive.

With respect to the Russian financial institutions blocked on February 22 and 24, 2022 pursuant to E.O. 14024, General Licenses (GLs) 3 and 11 authorized U.S....

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TURBOFAC Commentary (311 words)

Notes:

1) This FAQ contains two statements of cross-programmatic note. One is that, in the context of what appears to be an otherwise ordinary wind-down GL applicable to blocked financial institutions, “withdrawing funds and securities, canceling letters of credit, and amending or canceling performance guarantees” are included within the scope of the GL.

2) With respect to the statement that “obligations under this directive apply to U.S. financial institutions only,” the implication appears to be that a U.S. person can enlist “foreign financial institutions” to process transactions involving CAPTA-listed entities that would be prohibited for “U.S. financial institutions”.

In the 2017 Compliance Services Guidance, OFAC says that “U.S. persons, wherever located, may not otherwise approve, finance, facilitate, or guarantee any transaction by a foreign person, including...