OFAC FAQ (Removed) # 625 -Ukraine-/Russia-related Sanctions

Date issued: Jan. 25 2022

TURBOFAC Commentary (324 words)

Notes:

1) See also interpretive Guidance letter in Case No. Ukraine-EO13662-2018-354754-1, dealing with the question of the scope of "maintenance" in the secondary sanctions context. That guidance suggests, without saying so explicitly as is the case here, that "transactions ordinarily incident to the continuity of operations" is the applicable standard.

See also the interpretive guidance letters and other documents dealing with the scope of "winding down" operations generally, as those transactions are permitted under Ukraine GL 14, Ukraine GL 15 and Ukraine GL 16 in a manner distinct (i.e. narrower) from the authorizations related to the "maintenance" of operations. In those cases, new significant contracts may be outside the scope of a "wind-down" GL, but within the scope of a "maintenance" GL. Indeed, OFAC appears to be explaining what falls within the scope of "maintenance" as much as it is explaining what is not within the scope of "winding down."

Query whether the "contingent contracts" described in the FAQ are within the scope of a wind-down GL that does not include "maintenance." It seems not.

2) With the exception of the “executory contracts” bit, a general rule of thumb that seems extractable from this guidance is that if OFAC could be persuaded that a given deal would have been done even in the absence of the sanctions, it falls within the scope of permitted “maintenance.”

3) Compare FAQ 648, virtually identical substantively in the Venezuela context, and FAQ 806.

4) FAQ Amended on 7-22-2020 to reflect the expiry of GLs 14 and 16, which also contained "maintenance" provisions.

5) See generally Examples of Transactions Deemed to be, and not to be, Within the Scope of the Standard "Wind-down" and "Maintenance" GLs

6) FAQ amended on 1-24-2022 to update the number of the GL to the one that was active at the time.

7) FAQ removed between 1-25-2022 and 5-17-2022.