April 8, 2022

US issues new Russia-related sanctions, general licenses and a new EO banning new investments and services to Russia

On April 6, 2022, the US Department of the Treasury’s Office of Foreign Assets Control imposed additional sanctions upon Russia in response to the recent atrocities against Ukrainian citizens during the Russian invasion.  OFAC has imposed full blocking sanctions against Sberbank, Russia’s largest state-owned bank, and Alfa-Bank, Russia’s largest private bank, expanding upon EO 14024 Directive 2 and 3 sanctions that OFAC previously imposed upon Sberbank and Alfa-Bank, respectively, on February 24, 2022.  OFAC also designated 42 Sberbank subsidiaries, 6 Alfa-Bank subsidiaries, and identified as blocked property 5 vessels that were owned by one of the newly-designated Alfa-Bank subsidiaries.  In addition, OFAC designated the remaining members of the Russian Security Council, including President Vladimir Putin and Foreign Minister Sergey Lavrov as well as their family members.  The Russian Security Council is being designated pursuant to EO 14024 for being complicit in the war against Ukraine. Many of these individuals have also been sanctioned by US allies and partners, including Canada, the EU, Japan, New Zealand, Australia, and the UK.

OFAC has expanded the designations of Sberbank and Alfa-Bank to full blocking sanctions pursuant to EO 14024 for operating or having operated in the financial services sector of the Russian economy.  The 42 Sberbank subsidiaries have been designated pursuant to EO 14024 for being owned or controlled by Sberbank, while the 6 Alfa-Bank subsidiaries have been designated pursuant to EO 14024 for being owned or controlled by Alfa-Bank. It is important to note that all entities owned 50 percent or more by Sberbank and Alfa-Bank are subject blocking under EO 14024, even if they are not designated by OFAC.

In addition to the new sanctions, President Biden issued a new Executive Order, “Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression,” to ban all new investments in Russia by US persons wherever located and prohibiting the export, reexport, sale or supply of any category of services as determined by the Secretary of the Treasury, in consultation with the Secretary of State, from the US to any person located in Russia.

OFAC also issued 6 new Russia-related general licenses to temporarily allow certain activities that would usually be prohibited under the Russian Harmful Foreign Activities Sanctions Regulations (RuHSR), 31 CFR part 587.  General License 8B authorizes transactions with certain named Russian banks for certain energy related transactions until June 24, 2022, while General License 9B authorizes certain dealings in Tranche 1 debt or equity to non-US persons until May 25, 2022 and dealings in Alfa-Bank debt or equity to non-US persons until June 30, 2022.  General License 10B authorizes certain transactions related to derivative contracts, authorizing those involving Tranche 1 entities until May 25, 2022 and those involving Alfa-Bank entities until June 30, 2022.  OFAC also authorizes wind down activities with specific Russian banks, allowing US persons to process transactions necessary to the wind down of Sberbank CIB USA, Inc. until June 7, 2022 (GL 21), and authorizes all activities necessary to wind down transactions involving the Public Joint Stock Company Sberbank of Russia until April 13, 2022 (GL 22) and all activities necessary to wind down transactions involving Joint Stock Company Alfa-Bank until May 6, 2022.

Department of Treasury Press Release | President Biden’s New Executive Order | Department of Treasury Recent Action | General License 8B | General License 9B | General License 10B | General License 21 | General License 22 | General License 23