OFAC Issues Guidance as Russia Securities-Related General Licenses Expire
The Office of Foreign Assets Control declined to renew two Russia-related licenses that had authorized certain transactions related to Russia’s Moscow Exchange, National Clearing Center and National Settlement Depository (see 2406120036), warning in guidance last week that it planned to let the licenses expire 12:01 a.m. EDT Oct. 12.
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The agency renewed general licenses 99A and 100A in August (see 2408020017), which had authorized the wind down of certain transactions related to debt, equity of, or derivative contracts involving those entities, and the divestment of securities held at the National Settlement Depository. When they expire, “any securities in the possession or control of U.S. persons that are held at NSD should be treated as blocked, and dividends or other income received via NSD should be treated as blocked,” OFAC said.
The agency added that it’s “aware” that Russia has “attempted to take action to evade or avoid OFAC sanctions on NSD via Presidential Decree 840 by requiring the transfer of certain securities to local Russian registrars.” Those transfers “may not be authorized under the general licenses and may be considered null and void pursuant to OFAC’s regulations,” it said.
OFAC said those transactions may involve other sanctioned parties, including “local Russian registrars,” and said it’s “investigating the remaining non-blocked local Russian registrars for future designation” under its sanctions authorities.
“The general licenses do not authorize transactions involving any blocked person other than those identified in the authorizations, and any transfer made in violation of OFAC sanctions is null and void,” the agency said. “As such, U.S. persons should continue to treat these securities as blocked.”