Cyber General License (No. 1C) - Authorizing Certain Transactions with the Federal Security Service

Date issued: Apr. 27 2023

TURBOFAC Commentary (389 words)

Notes:

1) See FAQ 501, FAQ 502, FAQ 503 and FAQ 504, each dealing with specific elements of the GL. FAQ # 504 is notable for its confirmation that the Berman Amendment exemption for travel applies to the Cyber-related Sanctions Regulations, even though it contains no "exempt transactions" provision. FAQ # 504 also confirms that the travel exemption applies to entities sanctioned pursuant to Sec. 224 of the CAATSA, as is the case with the Russian FSB.

2) GL originally issued 2017, with a non-substantive amendment in 2018 to include CAATSA as an authority for the issuance of the GL. The GL was further amended on March, 2, 2021, to account for the designation of the FSB pursuant to the WMDPSR. The GL was further amended on April 28, 2023 to (i) account for the designation of the FSB pursuant to EO 14078 (Bolstering Efforts to Bring Hostages and Wrongfully Detained United States Nationals Home), and (ii) remove CAATSA as an authority for the issuance of the GL, since Section 224 of CAATSA was incorporated into the Cyber-Related Sanctions Regulations in 2922 (see 578.201).

3) Compare with Ukraine General License Number 11 - ​Authorizing Certain Transactions With FAU Glavgosekspertiza Rossii (December 20, 2016), authorizing limited permitting and compliance-related transactions with a state-owned entity designated as an SDN. As there, this GL has no expiration date.

4) By its terms, the GL is not limited to activities in which a U.S. person is a party to an underlying transaction. This means that U.S. persons may engage in ancillary transactions that would be subject to the otherwise-applicable prohibitions, even if such activities pertain to a transaction involving no U.S. person. For example, the U.S. person “facilitation” of transactions between non-U.S. person subsidiaries and the FSB is authorized, provided that they otherwise fall within the scope of the GL. Compare e.g. FAQ # 661, comments thereto. See also FR Notice Explaining OFAC's Implementation of Sec. 218 of the TRA (77 FR 75849, Dec. 26, 2012).

5) Compare Russia-related General License 42, which is substantively identical in scope and designed to not disturb the status quo with respect to the FSB.

6) Note: on 9-6-22, section 224 of CAATSA was implemented into the Cyber-related Sanctions Regulations (see 578.201).