OFAC FAQ (Current) # 391 - Ukraine-/Russia-related Sanctions

Ed. Note: if you’re new to TURBOFAC, please take note that the text string filtration function generally shouldn’t be used for terms such as “ordinarily resident,” “causing” or “new debt”. For research on the meaning of words and phrases such as those, i.e. terms central to the key legal issues in sanctions law that appear on a cross-programmatic basis, you’re typically better off locating and checking the appropriate box in the “Key Legal Issues” search category, which will limit the results to those that have been manually assessed as being relevant for the interpretation of the terms at issue.

Try typing your search term (“ordinarily resident,” “new debt,” or something else) in the “Find a Search Filter” box at the top of the page, and the corresponding “Key Legal Issues” check box will pop up instantly, if one exists. Once you check the box (e.g. “new debt,” with ~55 results), you can always use the text string filtration function to further refine your search (e.g. by typing “invoice” and narrowing the ~55 results to ~10).

Note in addition that the same applies to text string searches such as “14071” (if you’re looking for items related to EO 14071). By typing “14071” in the “Find a Search Filter” field up top, you will be able to instantly narrow the results down to items manually assessed as relating to EO 14071. Ditto terms such as “515.204” or “Iran General License G” (try the “Discrete Legal Provision” search category). Please contact [email protected] or [email protected] with any questions on search results and efficiency.

Please click "Apply Text String Filters" again after clicking the "Close" button immediately below.

TURBOFAC Commentary (208 words)

Notes:

1) FAQ clarifies that depository receipts based on otherwise prohibited equity is considered dealing in prohibited equity. This would be probably be characterized as a form of "indirect" dealing.

2) OFAC appears to be saying that if a depository receipt is issued subsequent to an SSI being designated, but the reference asset is equity issued prior to the designation, it is not within the scope of the SSI directive prohibiting dealings in new equity.

3) FAQ amended in 2017 to clarify that equity prohibitions only apply to Directive 1. A prior version of this FAQ read as follows:

391. Can U.S. persons issue and deal in new depositary receipts that are based on the equity of an entity subject to the Sectoral Sanctions Identification List (an SSI entity)?

"Yes, in certain circumstances. U.S. persons, including U.S. financial institutions, may issue and deal in depositary receipts that are based on equity issued by an SSI entity prior to the effective date of the sanctions. U.S. persons may not, however, deal in or issue depositary receipts that are based on equity issued by an SSI entity on or after the effective date of the sanctions. Such transactions would constitute prohibited transactions or dealings in new equity. [7-28-2014]"

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OFAC FAQ (Current) # 391 - Ukraine-/Russia-related Sanctions

TURBOFAC Commentary (208 words)