OFAC “Derivative Designation” Notice - Treasury Targets Russian Oil Brokerage Firm for Supporting Illegitimate Maduro Regime (Rosneft Trading S.A.)

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 (270 words)

Notes:

1) As of the date on which this press release was issued, this was probably the most economically significant use of the "operating in" derivative designation criterion as a "quasi-secondary sanctions" authority. Here, OFAC designated a subsidiary of the Russian state-owned oil/gas firm Rosneft for brokering oil sales on behalf of PdVSA, in addition to other transactions that OFAC did not allege to be violative of either UN sanctions or the laws of any country having jurisdiction over the transactions. In that sense, the designation was, in effect and in the absence of any formal secondary sanctions authority that targets Venezuela, a "secondary sanction." See General Note on "Sectoral Sanctions" and Determinations Made Pursuant to EOs Providing for the Blocking of Persons Determined to "Operate In" a Certain Sector.

2) Note the distinction between "Rosneft Oil Company" and "Rosneft Trading S.A.," which OFAC makes in the designation notice. Rosneft Oil Company is not blocked as a result of the designation simply because it owns Rosneft Trading S.A. The 50% rule only blocks entities that are owned by blocked entities, not entities that own blocked entities. However, both Rosneft Trading S.A. and Rosneft Oil Company are subject to SSI Directive 2 and SSI Directive 4, which operate independent of the blocking pursuant to 13850.

3) See FAQ # 817, FAQ # 818 and the wind-down general license referred to in the designation notice; Venezuela General License 36.

*For the criteria we use to determine what designation notices to include in the Research System, see Introductory Note Common to all Derivative Designation Notices Included in the Research System.

Welcome!

Welcome!

Notable "Derivative" Designations - Treasury Targets Russian Oil Brokerage Firm for Supporting Illegitimate Maduro Regime (Rosneft Trading S.A.)

TURBOFAC Commentary (270 words)