US Sectoral Sanctions

US Direct Sanctions - SDNs (cont'd) OFAC "Guidance on the Provision of Certain Services..." of 12 Jan. 2017 (and FAQs 495-499) Provides some clarity as to what a US person (citizen or permanent resident) legal counsel (in-house or outside) or compliance officer can/can't do in advising a non-US company (employer, client) on the legality of proposed transactions under the US sanctions laws Essential point: can advise on whether complies / violates (and approve if clearly complies ... e.g., upon OFAC authorization); but can't otherwise "facilitate" a violative transaction ... by voting at Board level, signing, etc. Indeed, as a general matter, "facilitation" (re a US person's direct or indirect participation in a non-US person's sanctions-relevant activity-involving not only SDNS but also SSIs) is a complex, case-by-case determination requiring careful factual analysis to determine whether any such US person's actions may be viewed as facilitating prohibited transactions or activities And OFAC general (not Russia-specific) 2019-20 releases of note Oct. 2020 Settlement Agreement with a leading US private equity firm (trade with Iran) - see slide 32 above Sept. 2020 Settlement Agreement with a leading European bank - see slide 9 above Sept. 2019 OFAC Settlement Agreement with British Arab Commercial Bank (BACB): London-based bank, having no US offices, business, or presence, was found to have violated the Sudan sanctions regs by processing many USD funding transactions for sanctioned Sudanese financial institutions that involved a nostro account at a non-US bank but also indirectly involved funds flows to or through the US financial system OFAC found that BACB "ignored warning signs that reasonably should have put the bank on notice" of violative conduct (as elaborated in the settlement announcement) FAQS 819-820 of Feb. 2020 on amendments to OFAC's Reporting, Procedures and Penalties Regulations (RPRR) clarifying that both US persons and persons otherwise subject to US jurisdiction (e.g., foreign banks handling USD transactions) are required to report to OFAC on a rejected transaction within 10 business days, and elaborating on the info required to be collected/submitted see the underlying RPRR amendments, 20 June 2019 (re blocking, unblocking, and rejected transactions reporting, and licensing procedures, etc.) Framework for OFAC Compliance Commitments, 2 May 2019 (including indication of OFAC intent to focus more on enforcement against responsible executives of companies, US as well as non-US, that have violated sanctions) And see May 2020 Guidance for shipping industry etc. - link at slide 11 above Morgan Lewis 40 0

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