OFFICE OF FOREIGN ASSETS CONTROL
Russian Harmful Foreign Activities Sanctions Regulations
31 CFR part 587
GENERAL LICENSE NO. 114
Authorizing Certain Transactions Related to Debt or Equity of, or Derivative Contracts Involving, Certain Entities Blocked on November 21, 2024
(a) Except as provided in paragraphs (d) and (e) of this general license, all transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the divestment or transfer, or the facilitation of the divestment or transfer, of debt or equity issued or guaranteed by the following blocked entities (“Covered Debt or Equity”) to a non-U.S. person are authorized through 12:01 a.m. eastern standard time, December 20, 2024:
(1) Gazprombank Joint Stock Company;
(2) Interstate Bank; or
(3) Any entity in which one or more of the above persons own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.
(b) Except as provided in paragraph (e) of this general license, all transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to facilitating, clearing, and settling trades of Covered Debt or Equity that were placed prior to 4:00 p.m. eastern standard time, November 21, 2024 are authorized through 12:01 a.m. eastern standard time, December 20, 2024.
(c) Except as provided in paragraph (e) of this general license, all transactions prohibited by E.O. 14024 that are ordinarily incident and necessary to the wind down of derivative contracts entered into prior to 4:00 p.m. eastern standard time, November 21, 2024 that (i) include a blocked person described in paragraph (a) of this general license as a counterparty or (ii) are linked to Covered Debt or Equity are authorized through 12:01 a.m. eastern standard time, December 20, 2024, provided that any payments to a blocked person are made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).
(d) Paragraph (a) of this general license does not authorize:
(1) U.S. persons to sell, or to facilitate the sale of, Covered Debt or Equity to, directly or indirectly, any person whose property and interests in property are blocked; or
(2) U.S. persons to purchase or invest in, or to facilitate the purchase of or investment in, directly or indirectly, Covered Debt or Equity, other than purchases of or investments in Covered Debt or Equity ordinarily incident and necessary to the divestment or transfer of Covered Debt or Equity as described in paragraph (a) of this general license.
(e) This general license does not authorize:
(1) Any transactions prohibited by Directive 2 under E.O. 14024, Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions;
(2) Any transactions prohibited by Directive 4 under E.O. 14024, Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation; or
(3) Any transactions otherwise prohibited by the RuHSR, including transactions involving any person blocked pursuant to the RuHSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.
Lisa M. Palluconi
Acting Director
Office of Foreign Assets Control
Dated: November 21, 2024
1) Except as described below, this is standard "debt/equity" GL, as issued in the Russian context (compare e.g. Russia GL 43 and Russia GL 48), that does not license against Directive 4 Under EO 14024. Refer generally to General Note on GLs and Other Types of Authorizations as Applied to Dealings in or Related to Securities of Sanctioned Issuers, for comments on the scope of the typical wind down GL containing language similar to this one.
2) This is the third ever GL of this type that explicitly authorizes dealings in debt "guaranteed" by specified blocked parties. The implication is that any debt instrument guaranteed is debt in which a blocked person has an interest, such that OFAC authorization is required to deal in such debt. Compare Opening Securities and Futures Accounts from an OFAC Perspective (OFAC implies that a blocked person acting as "guarantor" on an account would render that account property in which the guarantor has an interest, and thereby blockable). See Examples Illustrating the Operation of the “Interest" Concept as Applied to Certain Securities and Derivatives.
3) See Russia-related General License 113 (general wind down GL that applies to Gazprombank and Interstate Bank).
4) By licensing against the entirety of EO 14024 without a carveout for Directive 3 Under EO 14024, this GL appears to implicitly license against Directive 3 Under EO 14024 (debt/equity) to which Gazprombank has been subject since 2-24-22. Is it a mistake/oversight that this GL authorizes transactions that implicated Directive 3 Under EO 14024 that were prohibited prior to the 11-21-24 blocking action? We would imagine so.
5) This GL was issued after the expiration of Russia-related General License 100 (NSD), was issued for the specific purpose of allowing dealings in “debt or equity” of Gazprombank, but does not authorize “[a]ny transactions otherwise prohibited by the RuHSR, including transactions involving any person blocked pursuant to the RuHSR other than [Gazprombank or Interstate] unless separately authorized.” See FAQ # 1197, and query whether and to what extent a lingering “interest” of NSD in Gazprombank or Interstate securities renders this GL inoperative with respect to such securities.