Morgan Lewis US and Russia Sanctions Update

CAATSA / Guidances / Lists (cont'd) - CAATSA: requires the President to impose sanctions - from a few menus of possibilities, mostly involving penalties re business with/in the US - in various contexts (upon findings, and with some carve-outs/waiver possibilities - in other words, de facto discretion) including against: per CAATSA section 224 - US or non-US persons that knowingly engage in significant activities undermining cyber-security on behalf of the Russian gov't, materially assist, sponsor, or provide support for, or provide financial services in support of same (no general State or OFAC Guidance yet on this provision - but there has been some application... see slides 40 and 42) per CAATSA section 225 (and see the Oct. 2017 State Dep't Guidance), non-US companies and individuals that knowingly make significant investment in deepwater, Arctic offshore or shale oil projects in Russia (as written, could be whether or not one of the Directive 4 Russian cos. is involved - and the State Dept. Guidance doesn't clarify) per CAATSA section 226 (and see the Oct. 2017 OFAC Guidance), Russian and other foreign financial institutions ("FFIS") that knowingly engage in / facilitate "significant" transactions involving any of the Directive 4-type oil projects in Russia, certain defense-related activities, or Gazprom's withholding of gas supplies per CAATSA section 228 (and see the Oct. 2017 OFAC Guidance), non-US companies and individuals that knowingly - this being the broadest/most worrisome CAATSA provision # materially violate, attempt or conspire to violate or cause a violation of any Russia sanction facilitate "significant transactions" (including “deceptive or structured transactions") for or on behalf of any person that is subject to any Russia sanction - or child, spouse, parent or sibling of same though the related OFAC Guidance does go some way to calm fears of over-expansive application with respect to SSI sanctioned entities (see slides 57-58 below for details) but note also the section 225 stiffened requirement to impose sanctions on any FFI that knowingly facilitates a significant financial transaction for any SDN Morgan Lewis 50

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