OFAC Issues Additional General Licenses, Guidance, and a Final Rule

Washington, D.C. (October 22, 2024) - On September 30, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued a new General License (“GL”) and updated its Specially Designated Nationals (“SDN”) and Sectoral Sanctions Identifications (“SSI”) Lists. Earlier in September, OFAC issued two additional GLs, an updated Russia-related Frequently Asked Question (“FAQ”), and a Final Rule.

Russia-related GL13K, issued on September 30, replaces GL 13J and authorizes, through 12:01 a.m. EST, January 8, 2025, U.S. persons, or entities owned or controlled directly or indirectly by a U.S. person, to pay certain taxes, fees, or import duties, or to purchase or receive permits, licenses, registrations, certifications, or tax refunds otherwise prohibited by Directive 4 under Executive Order 14024. Directive 4 largely prohibits U.S. persons from engaging in transactions with the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation.

Importantly, GL 13K authorizes administrative transactions only where “ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities,” and does not authorize “any debit to an account on the books of a U.S. financial institution” of the Russian Central Bank, National Wealth Fund, or Ministry of Finance, or any transactions otherwise prohibited by the Russian Harmful Foreign Activities Sanctions Regulations (“RuHSR”).

The same day, OFAC deleted several notable entities from the SDN List, including the financial institution Prominvestbank, and altered the SSI List entry for Prominvestbank to reflect its removal from the SDN List.

These actions follow OFAC’s September 13 issuance of GLs 109 and 25F, updated FAQ 1040, and a new Final Rule:

• GL 109 authorizes, through 12:01 a.m. EST, November 13, 2024, certain wind down transactions with (1) Federal State Unitary Enterprise International Information Agency Rossiya Segodnya; (2) Autonomous Non Profit Organization TV Novosti; or (3) any entity in which either own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest.
   
• GL 25F replaces GL 25E and authorizes certain transactions ordinarily incident and necessary for the receipt or transmission of telecommunications and internet communications with Russia that are otherwise prohibited by the RuHSR. Notably, however, GL 25F does not authorize transactions involving, among other entities, Joint Stock Company Channel One Russia, Joint Stock Company NTV Broadcasting Company, Television Station Russia-1, Limited Liability Company Algoritm, New Eastern Outlook, Oriental Review, Garantex Europe OU, Autonomous Non-Profit Organization Dialog, Autonomous Non-Profit Organization Dialog Regions, Federal State Unitary Enterprise International Information Agency Rossiya Segodnya, or Autonomous Non-Profit Organization TV Novosti.
   
• The updated FAQ 1040 reflects the issuance of, and adds additional information related to the authorizations under, GL 25F. Among other clarifications, FAQ 1040 identifies that GL 25F “authorizes the exportation or reexportation, sale, or supply” of software, hardware, or technology incident to the exchange of communications over the internet. However, this authorization is subject to the specific limitations identified by GL 25.
   
• OFAC issued a Final Rule, effective September 17, 2024, which adds explanatory notes to 35 of OFAC’s sanctions regulations. The explanatory notes identify the types of actions OFAC can take, the forms of notices it may yse, and how affected individuals can contact OFAC to inquire about these actions. Further, the Final Rule clarifies an existing explanatory note, specifying that OFAC may not necessarily publish the names of persons blocked during the pendency of an investigation, and explains the procedures for seeking release of blocked property or administrative reconsideration of OFAC actions to add information about additional unblocking procedures available to blocked or otherwise affected persons.

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Author:

George Leahy, Associate

Editor:

Andrew Pidgirsky, Partner and Ukraine Conflict, International Trade, Export, Import and Investment Controls & National Security Practice