Case No. UKRAINE-EO13661-2015-317467-1

Date issued: Jun. 21 2019

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TURBOFAC Commentary (1707 words)

Notes:

1) BACKGROUND

This guidance letter contains notable conclusions regarding the relationship between the basic blocking prohibition and (i) U.S. person involvement in sanctions-implicating transactions of offshore entities, and (ii) the ability of U.S. persons to hold equity in non-sanctioned third country companies that do business substantially (if not exclusively) with blocked persons. Note that the entity at issue here (Kalashnikov Designs Limited) was a small entity incorporated on 5-9-12 and dissolved on 11-19-19 (see native PDF), and Kalashnikov Concern was designated as an SDN on July 16, 2014.

The applicant is a U.S. person (by citizenship) that, from March 2, 2015 through May 6, 2019, "held a 25 percent ownership interest in" a non-U.S. person entity that appeared to be created for the predominant (if not sole) purpose of selling goods "[p]ursuant to a merchandising agreement" with an SDN to which...