On November 21, 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control designated more than 50 Russian banks, securities registrars and financial officials to diminish Russia’s ability to use the international financial system to support its war against Ukraine. Secretary of Treasury Janet Yellen indicated that OFAC was targeting the largest remaining non-designated banks, financial institutions and officials in Russia in order to degrade Russia’s war machine and its ability to evade U.S. sanctions and fund and equip its military. The designees include Gazprombank Joint Stock Company and six of its foreign subsidiaries.
The new designations were imposed pursuant to Executive Order 14024, as amended, for operating in the financial services sector of the Russian economy. As a result of these designations, 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.
To build upon the new designations, OFAC issued four new general licenses under Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587. General License 53A authorizes transactions related to diplomatic missions involving Gazprombank, entities in which the bank owns more than a 50 percent or greater interest, or those prohibited by Directive 4 under Executive Order 14024. General License 55C permits transactions related to the maritime transport of crude oil originating from the Sakhalin-2, until June 28, 2025, provided that the Sakhalin-2 byproduct is solely intended for importation into Japan. General License 113 allows wind down transactions involving certain newly-designated financial institutions until December 20, 2024, and General License 114 authorizes transactions related to debt or equity of, or derivative contracts involving certain newly-designated entities until December 20, 2024.
On the same day, OFAC issued an alert to warn foreign financial institutions that might be planning to join Russia’s financial messaging system and its “System for Transfer of Financial Messages” (“SPFS”) of the risk of violating U.S. sanctions. According to the alert, foreign financial institutions that join SPFS may be designated by the United States for operating in the Russia’s financial services sector pursuant to Executive Order 14024. After the release of this alert, any foreign financial institution that joins the SPFS would be viewed as a red flag, and OFAC is prepared to target such institutions more aggressively .
U.S. Department of Treasury Press Release | General License 53A | General License 55C | General License 113 | General License 114 | OFAC Alert