625. What types of activities are considered “maintenance,” as the term is used in General License 15K?
As a general matter, the authorization for “maintenance” in General License 15K includes all transactions ordinarily incident to the continuity of operations. Additionally, for the purposes of General License 15K, the authorization for “maintenance” generally includes all transactions and activities ordinarily incident to performing under a contract or agreement in effect prior to April 6, 2018, provided that the level of performance is consistent with the terms of the general license and consistent with past practices that existed between the party and the blocked entity prior to April 6, 2018. Notwithstanding the absence of a contract or agreement in effect prior to April 6, 2018, the authorization for “maintenance” also generally includes all transactions and activities ordinarily incident to obtaining goods or services from or providing goods or services to a blocked entity listed in General License 15K in a manner consistent with the terms of the general license and consistent with past practices that existed between the party and the blocked entity prior to April 6, 2018. OFAC will consider the transaction history between the party, or any intermediary party, and the blocked entity prior to April 6, 2018 in assessing whether activity is consistent with past practices. The authorization for “maintenance” also generally includes authorization to enter into contingent contracts for transactions and activities consistent with the above, extending beyond the current expiration of General Licenses 15K, where any performance after the expiration of the general license is contingent on such performance either not being prohibited or being authorized by OFAC.
For example, maintenance transactions and activities authorized by General License 15K could include issuing or accepting purchase orders and making or receiving shipments consistent with the terms of the general license that were initiated after April 6, 2018 involving the blocked entities if such activity is ordinarily incident and necessary to contracts in effect prior to April 6, 2018 (provided the purchase and shipment amounts are consistent with past practices, as demonstrated by transaction history). Similarly, transactions and activities that are not within the framework of a preexisting agreement may be considered “maintenance” if such activity is consistent with the transaction history between the person and the blocked entity prior to April 6, 2018. Conversely, General License 15K would not authorize as maintenance transactions purchase orders and shipments involving the blocked entities listed in the general license where there was no preexisting relationship between a person and a blocked entity or where the contemplated activity exceeds past practices that existed between the party and the blocked entity prior to April 6, 2018 as demonstrated by transaction history. Stockpiling inventory, for example, would not be authorized as maintenance unless transaction history indicates that the scope and extent of maintaining inventory is consistent with past practice.
In addition, General License 15K authorizes certain activities beyond maintenance. See FAQ 586.
Note that past general licenses, such as General License 14 and General License 16, also authorized maintenance with respect to certain entities, but have expired.
Date Updated: January 24, 2022
Date Released
July 22, 2020
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.