US Sectoral Sanctions
US Direct Sanctions - SDNs (cont'd)
Interpretation is given (essentially formalizing existing OFAC practice) as to what may be
considered "maintenance" (in context of the GL's phrasing "... ordinarily incident and
necessary for the maintenance or wind down of operations, contracts, or other agreements
...") re what ongoing activities are permitted until the current (and as may be extended)
wind-down deadline
On condition that the "level of performance" is consistent with the applicable GL, and with
"transaction history" / "past practices" with the blocked entity prior to 6 April 2018
And "transactions and activities that are not within the framework of a pre-existing
agreement may be considered 'maintenance' if such activity is consistent with [the parties'
pre-designation transaction history]."
Also gives authorization for "contingent contracts" (again, only if consistent with the above)
for transactions / activities extending beyond the current valid GL expiration, where any
performance after the expiration is contingent on such performance either not being
prohibited or being authorized by OFAC (e.g., by possible GL further deadline extension or
by specific license)
But stockpiling of inventory, even if pursuant to a pre-designation contract, is not
authorized unless consistent with past practice in scope and extent, as evidenced by
transaction history
Note that GL 36A of 12 March 2020 re Rosneft Trading/ TNK Int'l Trading didn't mention
"maintenance" - only wind-down; apparent significance of this distinction
Morgan Lewis
38View entire presentation