February 26, 2024

OFAC designates Sovcomflot, Russia’s largest shipping company, and issues related general licenses

On February 23, 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control designated state-owned Joint Stock Company Sovcomflot, Russia’s largest shipping company.  The designation was imposed to reduce the Russian revenues generated from the sale of Russian oil.  In addition to the designation, OFAC also identified 14 crude oil tankers as property in which Sovcomflot has an interest.

The designation of Sovcomflot was imposed pursuant to Executive Order 14024 for being an entity that operates in a key sector of the Russian economy or has acted on behalf of the Government of Russia.  According to OFAC, Sovcomflot has also been sanctioned by Australia, Canada, New Zealand, and the United Kingdom and is subject to certain restrictions in the European Union.  As a result of this designation, all property and interests in property of the designated persons within the United States or within the possession or control of a U.S. person are blocked, and U.S. persons are generally prohibited from engaging in transactions involving a designated person.  Entities owned 50 percent or more by one or more blocked persons are also blocked.

In light of the Sovcomflot designation, OFAC issued two related general licenses under Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587.  One of the general licenses authorizes transactions involving Sovcomflot vessels that have not been identified on OFAC’s List of Specially Designated Nationals and Blocked Persons (GL 93).  The other authorizes, until April 8, 2024, transactions involving the offloading of cargo from identified Sovcomflot vessels that were loaded prior to February 23, 2024 (GL 92).

On February 23, 2024, OFAC also imposed more than 300 designations to mark the two-year anniversary of Russia’s war in Ukraine.  In parallel with these designations, OFAC issued General License 88A to authorize wind down transactions involving one or more of the newly-designated entities, including Sovcomflot, until April 8, 2024.  OFAC also issued General License 91A to authorize limited safety and environmental transactions involving certain newly-designated persons or vessels, including Sovcomflot, until May 23, 2024.

U.S. Department of Treasury Press Release | OFAC Recent Actions