The U.S. Department of the Treasury’s Office of Foreign Assets Control recently updated Russia-related Frequently Asked Questions (“FAQs”) 1224 and 1225. The FAQs were issued to clarify the provisions in General License 128B (issued December 4, 2025) and GL 131A (issued on December 10, 2025) following OFAC’s designation of PJSC Lukoil pursuant to Executive Order 14024 on October 22, 2025 and the subsequent designation of Lukoil International GmbH (“LIG”) and its majority-owned subsidiaries (“LIG Entities”) pursuant to EO 14024 on December 4, 2025. GL 128 temporarily authorizes wind down activities with LIG and LIG Entities, including physical retail service stations located outside of Russia, until April 29, 2026. Following the Lukoil designations, OFAC became aware of Lukoil’s effort to divest its assets to non-sanctioned parties outside of Russia in an effort to lessen the impact of sanctions. In response, OFAC issued GL 131A to support these divestments and enable companies to negotiate with and enter into contingent contracts with PJSC Lukoil, LIG or LIG Entities until January 17, 2026, provided that the contracts are expressly contingent upon the receipt of separate authorization from OFAC.
On December 18, 2025, OFAC updated FAQ 1224 to clarify the authorizations in GL 131A and, in particular, what transaction conditions will be considered by OFAC when evaluating requests for further authorization to effectuate a sale of LIG assets. According to FAQ 1224, GL 131A does not allow transactions that effect the actual sale or transfer of any LIG entity or asset, but it emphasizes that any contract executed pursuant to GL 131 “must expressly be made upon the receipt of a separate authorization from OFAC.” To this end, OFAC indicated that the U.S. Treasury will consider proposed transactions that support U.S. national security and foreign policy objectives, including proposed transactions that, at a minimum, sever LIG’s ties with Lukoil completely; block funds owed to Lukoil until sanctions are lifted with funds being held in an account subject to U.S. jurisdiction; and that do not provide Lukoil with a windfall. OFAC also reported that, as a condition for obtaining future licenses that effectuate the sale of LIG assets, it will likely require persons that purchase LIG assets to seek OFAC review before material assets can be divested further. In FAQ 1224, OFAC also expressly reserved the right to revoke GL131A at any time, especially if it appeared that Lukoil and LIG were not engaging in good faith negotiations regarding the divestments.
On the same day, OFAC updated FAQ 1225 to provide an overview of activities that GL 128B and GL 131A authorize with regards to LIG. According to FAQ 1225, both GLs authorize transactions undertaken in the ordinary course of business with LIG, provided that the transactions do not involve blocked persons other than the LIG Entities described in GL 128B and GL 131A. OFAC reported that both GLs also authorize transactions that are ordinarily incident and necessary to pre-existing agreements and intracompany transfers with LIG as long they are consistent was previously-established practices and support pre-existing projects and operations. According to OFAC, both GLs also authorize financial institutions and payment processors to debit and credit the accounts of relevant LIG Entities to effectuate their respective authorizations, provided that the payments are not transferred to a person or account in Russia. OFAC also emphasized, in FAQ 1225, that non-U.S. persons are not at risk of violating U.S. sanctions under EO 14024 if they engage in transactions with blocked persons that are generally authorized for U.S. persons.
OFAC Recent Actions | FAQ 1224 | FAQ 1225 | General License 128B | General License 131A