Investor Presentaiton
US Sectoral Sanctions - OFAC (cont'd)
Finance / Capital Markets (cont'd)
Per Directive 2 (as amended / effective Nov. 2017, per CAATSA): new debt financing with maturity of >60 days
(revised down from >90 days) for these designated entities or their subs (50%-or-more owned), and transactions
dealing in such debt
•
Gazpromneft
•
Novatek
Rosneft
Transneft
and here again, note the amended SSI Lists issued since 2015 to date - naming / singling out several specific Rosneft,
Novatek and Transneft subs – to which the same two above-noted (re Directive 1) coverage caveats apply
-
Per Directive 3 (still as of 12 Sept. 2014 - not amended): new debt financing, maturity of >30 days, for Russian
Technologies (Rostec) or its subs (≥50%-owned), and transactions / dealing in such debt (and see new FAQ 887)
and note that Rostec is also a CAATSA section 231 listed defense-industry entity (see slide 54 re the added Rostec-
dealings burdens/risks this entails, for US as well as non-US persons)
and Rostec subsidiary Rosoboronexport (and its subs) now also SDN per 2018 designation
And see related OFAC FAQS
FAQ 395 as amended, re permissible / prohibited US persons' activities with regard to L/Cs involving designated
companies under Directives 1, 2 and 3
FAQ 419 as amended, re permissible / prohibited payment terms for US persons' sale of goods / provision of services to,
and progress payments for long-term projects with, designated companies under Directives 1, 2 and 3
FAQ 371 re corresp. banking - OK only if the underlying transaction is permissible (thus seems stricter than under EU
rules)
in other words, mere use of USD, without more, could violate - which is main reason why Russian companies, including
oil exporters, are trying to move from Euro (or other currencies) as possible for transactions that have no other US link)
Also need to consider possible treatment of certain equipment lease contracts as sanctions-prohibited debt financing
And note OFAC General License 1B (of Nov. 2017)
-
Authorizing transactions by US persons (and otherwise within the US) involving derivative products having value
linked to underlying asset that is prohibited debt (or equity) under Directives 1-3 (and see related updated FAQ 372)
Note (see slides 70-71) that the CBW Act ban on US banks' lending doesn't extend to Directives 1-3 SSI state
entities
Morgan Lewis
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