Russia Sanctions

Russia Sanctions

OFAC DIRECTIVE 1 AS AMENDED SEPTEMBER 29, 2017

As required by the Countering Russian Influence in Europe and Eurasia Act of 2017 (CRIEEA), the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) on September 29, 2017 amended and reissued OFAC Directive 1 (Directive 1). As amended, Directive 1 continues to prohibit certain “new” debt, equity, and related transactions involving entities subject to U.S. Sectoral Sanctions targeting Russia’s financial services sector. This Business Update discusses the background to and mechanics of Directive 1 as amended and reissued.

Russia Sanctions

OFAC Directive 1: Financing, Debt & Equity Prohibitions

On July 30, 2015, the Office of Foreign Assets Control (OFAC) made explicit the sanctioned status of certain entities operating in Russia’s financial services sector by adding them to the Sectoral Sanctions Identifications List (SSIL).The SSIL identifies parties subject to U.S. Sanctions targeting specific sectors of the Russian economy (Sectoral Sanctions) within the framework of Ukraine/Russia-related sanctions adopted in response to events in Ukraine. Currently Russia’s financial services, defense, and energy sectors are targeted. Nevertheless, they may encounter legal, commercial, or reputational risk in the context of current or planned business with or involving a sanctioned entity, whether listed on the SSIL (or another sanctions list) or sanctioned as a matter of law (such as under the 50% Rule).

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