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OFAC FAQ (Current) # 976 - Russian Harmful Foreign Activities Sanctions (PDF contans all versions)

Date issued: Jun. 14 2022

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976. Can a U.S. financial institution process transactions related to energy where a Russian financial institution sanctioned pursuant to Executive Order (E.O.) 14024 is involved?

General License (GL) 8A authorizes certain transactions “related to energy” (as defined in the GL; see also FAQ 977) involving the following entities (collectively, “Covered Entities”):
• State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank (VEB);
• Public Joint Stock Company Bank Financial Corporation Otkritie;
• Sovcombank Open Joint Stock Company;
• Public Joint Stock Company Sberbank of Russia;
• VTB Bank Public Joint Stock Company;
• Any entity owned 50 percent or more, directly or indirectly, individually or in the aggregate, by one of the above entities; and
• The Central Bank of the Russian Federation.

GL 8A does not authorize any transaction prohibited by Directive 1A under E.O. 14024, “Prohibitions Related to Certain Sovereign Debt...

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TURBOFAC Commentary (265 words)

Notes:

1) Much will turn on the scope of the term "related to energy," less so as it concerns the meaning of "energy," which is defined, and more as it concerns "related to" (how closely related?).

2) The following statement is extremely important:

For purposes of assessing whether certain transactions are authorized under GL 8, U.S. persons may rely upon the information available to them in the ordinary course of business, including reasonable reliance on information about the underlying transaction provided by the parties thereto.

This acts as a diligence-related safe harbor that is not actually included in the text of the GL itself.

See section 3(ii) of General Note on the Terms "Knowingly," "Should Have Known" And "Reason to Know" In the Primary Sanctions, Secondary Sanctions and Derivative Designation Contexts (System Ed. Note) for...