988. Does Russia-related Directive 3 under Executive Order (E.O.) 14024, “Prohibitions Related to New Debt and Equity of Certain Russia-related Entities” (Russia-related Entities Directive) prohibit U.S. persons from engaging in all activities with entities subject to it?
No. The Russia-related Entities Directive prohibits U.S. persons from engaging in only certain activities related to new debt of longer than 14 days maturity or new equity of the entities listed in Annex 1 to the Russia-related Entities Directive, or of entities otherwise determined to be subject to the prohibitions of the Russia-related Entities Directive, as explained in FAQ 984. Please see FAQ 985 regarding the applicability of OFAC’s 50 Percent Rule with respect to this directive.
Some entities determined to be subject to the prohibitions of the Russia-related Entities Directive may also be subject to additional prohibitions under other sanctions authorities, such as additional directives under E.O. 14024...
1) FAQ serves to clarify that the Directive is a "less-than-blocking" sanction. Concerning the following statement:
It is important to note that each directive operates independently of the others. For example, if a transaction involves a person subject to two separate directives, a U.S. person engaging in that transaction must comply with both directives.
Note that while Directive 3 under Executive Order (E.O.) 14024 contains prohibitions that are substantively identical to those found in some SSI Directives, being subject to both directives can have material consequences. Ukraine General License Number 1 authorizes otherwise prohibited derivatives trades on an across-the-board basis, but there is no similar GL that applies to Directive 3 under Executive Order (E.O.) 14024. Some entities are subject to SSI Directives as well as Directive 3 under Executive Order (E.O.)...