OFFICE OF FOREIGN ASSETS CONTROL
Russian Harmful Foreign Activities Sanctions Regulations
31 CFR part 587
GENERAL LICENSE NO. 69
Authorizing Certain Debt Securities Servicing Transactions Involving International Investment Bank
(a) Except as provided in paragraph (c) of this general license, all transactions prohibited by Executive Order (E.O.) 14024 that are ordinarily incident and necessary to the processing of interest or principal payments on debt securities issued by International Investment Bank (IIB) prior to April 12, 2023 are authorized through 12:01 a.m. eastern daylight time June 30, 2023, provided that such interest or principal payments are not made to persons located in the Russian Federation and that any payments to a blocked person, wherever located, are made into a blocked account in accordance with the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587 (RuHSR).
Note to paragraph (a). For the purposes of this general license, the term “person located in the Russian Federation” includes persons in the Russian Federation, individuals ordinarily resident in the Russian Federation, and entities incorporated or organized under the laws of the Russian Federation or any jurisdiction within the Russian Federation.
(b) U.S. financial institutions are authorized to unblock interest or principal payments that were blocked on or after April 12, 2023 but before May 31, 2023 on debt securities issued by IIB prior to April 12, 2023, provided that the funds are unblocked solely to effect transactions authorized in paragraph (a) of this general license.
Note to paragraph (b). U.S. financial institutions unblocking property pursuant to paragraph (b) of this general license are required to file an unblocking report pursuant to 31 CFR § 501.603.
(c) 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 person described in paragraph (a) of this general license, unless separately authorized.
Andrea M. Gacki
Director
Office of Foreign Assets Control
Dated: May 31, 2023
1) The International Investment Bank (IIB) (https://iib.int/en) is a formerly multilateral development institution. According to Wikipedia:
Initially made it up of all Warsaw Pact members led by the Soviet Union alongside Cuba, Mongolia and Vietnam under the Eastern Bloc during the Cold War, IIB's membership was largely maintained until that point. East Germany withdrew from the IIB in 1990 following German reunification, Poland left in 2000 prior to joining the European Union and the Czech Republic and Slovakia (formerly part of Czechoslovakia) exited the organization following the 2022 Russian invasion of Ukraine with Bulgaria and Romania to follow. In April Hungary announced it was leaving as a result of sanctions on the Hungarian management of the bank.[2] This leaves Russia as the remaining European member of IIB.
https://en.wikipedia.org/wiki/International_Investment_Bank
The IIB was blocked pursuant to EO 14024 on 04/12/2023. On May 25, 2023, the bank issued a statement that:
"as a result of the imposed US OFAC sanctions, all correspondent banking entities of IIB in the EU blocked all transactions in connection with IIB, including Bank’s nostro accounts in EUR, USD, HUF, CZK, RON.
By the decisions of the correspondent banking entities, IIB is technically unable to make payments under standard payment arrangements and therefore has been deprived of the possibility to fulfil obligations in the abovementioned currencies to bondholders, creditors and clients."
This GL is clearly designed at rectifying that problem, particularly as it relates to non-Russian creditors of the bank.
2) As with Russia-related GL 43, this GL explicitly states that "U.S. financial institutions are authorized to unblock interest or principal payments that were blocked on or after April 12, 2023 but before May 31, 2023" because of the gap between the blocking of the relevant bank and the issuance of this GL. If the two were done concurrently, there would have been no "blocking" of the interest and principal payments to begin with (and no report filed).