On September 25, 2020, the Department of the Treasury’s Office of Foreign Assets Control issued General License 2A, to the Global Magnitsky Sanctions Regulations, 31 CFR Part 583, “Authorizing Certain Wind Down and Divestment Transactions and Activities Related to Blocked Subsidiaries to the Xinjiang Production and Construction Corps (XPCC).” This General License gives persons and entities until November 30, 2020, to take necessary steps to wind down transactions with any entity associated with the XPCC or any entity owned fifty percent or more by a XPCC entity. GL 2A also authorizes any efforts to transfer debt, equity, and holdings in any Blocked XPCC subsidiary to a non-US person, as well as efforts to facilitate such transfers between non-US parties.
All US persons who participate in transactions authorized by GL 2A must file a comprehensive, detailed report of each transaction with OFAC within 10 days of the November 30, 2020 expiration date. GL 2A is effective immediately, and replaces and supersedes GL 2, dated July 31, 2020, in its entirety.
OFAC also issued Frequently Asked Question No. 835, to clarify the provisions in GL 2A. FAQ 835 emphasizes, among other things, that GL 2A does not authorize any debit to accounts belonging to any Blocked XPCC Subsidiary on the books of a US financial institution. The FAQ also states that US persons will be prohibited from engaging or facilitating any transaction with Blocked XPCC Subsidiaries after the expiration date, unless they are exempt or authorized by OFAC. Furthermore, US persons who are unable to wind down transactions with blocked XPCC entities by the expiration date, are encouraged to contact OFAC for guidance.
OFAC Notice | OFAC General License 2A | OFAC FAQ 835