On January 5, 2021, the US Department of the Treasury’s Office of Foreign Assets Control, issued new and amended Frequently Asked Questions related to Countering America’s Adversaries Through Sanctions Act (CAATSA). OFAC and the State Department issued CAATSA in August 2, 2017, in order to, among other things, impose new sanctions on Iran, Russia, and North Korea. FAQs 869, 870, 545, and 546 are Ukraine and Russia-related sanctions.
FAQ 869 indicates that non-blocking sanctions do not apply to entities owned 50 percent or more by persons subject only to non-blocking menu-based sanctions, described in section 250(a) (1-8) and (10-11) of the CAATSA, as implemented by Executive Order 13849. However, OFAC emphasizes that sanctions made pursuant to section 235 (a)(9) of CAATSA, as implemented by section 1(a)(iv) of EO 13849, blocks the property interests of the sanctioned person and would apply to any entity owned 50 percent or more by the blocked person, according to OFAC’s 50 Percent Rule. Persons sanctioned under 235(a)(12) of CAATSA, as implemented by section 1(a)(vi) of EO 13849, may be listed on the Non-SDN Menu-Based Sanctions (NS-MBS) List or OFAC’s Specially Designated Nationals and Blocked Persons (SDN) List.
FAQ 870 addresses the recent addition of a person to the NS-MBS list on December 14, 2020, subject to loan and credit-related sanctions, pursuant to CAATSA section 235(a)(3), in order to clarify that the sanction prohibits any US financial institution from providing loans or credit of more than $10 million in any 12-month period, unless that person engages in activities to relieve human suffering and the loans or credits are being requested to provide for such activities.
The amendment to FAQ 545 provides definitions for several key terms in Section 10 of 22 USC Ch. 96, of the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine (SSIDES), while the amendment to FAQ 546 emphasizes that persons described in section 10(a)(2)(A) of SSIDES who are “subject to sanctions imposed by the US with respect to the Russian Federation” include persons listed on OFAC’s SDN List, the Sectoral Sanctions Identifications (SSI) List, or NS-MBS List, as well as persons subject to sanctions pursuant to OFAC’s 50 Percent Rule.
Department of Treasury Recent Actions (links to FAQs) | HR 3364 – CAATSA | OFAC’s 50 Percent Rule | Chapter 96 – SSIDES