US Sectoral Sanctions

CBW Act Sanctions (cont'd) • OFAC CBW Act Directive of 2 August 2019 - provides definitions/details on the US bank lending sanctions, confirming that: foreign branches of US banks, as well as US branches and subs of foreign banks, are covered gives further wide definition of US "bank" - including depositories, securities/options brokers and dealers, forward contract and foreign exchange merchants, securities and commodities exchanges, investment companies, and employee benefit plans confirms that "Russian sovereign" means any Russian ministry, agency or sovereign fund (including Central Bank, National Wealth Fund, Ministry of Finance) - but does not include Russian state-owned enterprises (though again, keep in mind OFÁC Directives 1 and 2) Finally (for now) State Dep't Notice in 26 August 2019 Fed. Reg. memorialized the new CBW-related export control sanction, but also incorporated and appeared to somewhat expand/adjust the first-round export control sanction (slides 64-66) so special caution is needed with regard to any possibly sensitive exports/reexports to Russia (and all the more so per newest Commerce/BIS rules - see generally slides 12, 27-32) Note also the risk of imposition of secondary sanctions on non-US persons under CAATSA (see slides 47-61) for certain violations of the CBW Act sanctions - The CBW Act (and the EO triggering this second round) isn't among the sanctions acts specifically covered under CAATSA (see its section 222(a)) But CAATSA section 228 catches anyone who "facilitates a significant transaction" for or on behalf of "any person subject to [US] sanctions..." (i.e., could mean any sanctions) And note the current (as of Dec. 2020) threat of further US sanctions legislation touching this sphere, and/or further application of the CBW Act, per the Navalny poisoning (see slides 5-6) Morgan Lewis 88 68

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