US Sectoral Sanctions

CAATSA / Guidances / Lists (cont'd) - CAATSA potential penalties (same as for OFAC / BIS regs. violations - based on underlying laws) Civil: $307,922 (per most recent inflation adjustment) per violation, or up to twice the value of the transaction that was the basis for violation Criminal: up to $1 million per violation, and individuals could be imprisoned (for up to 20 years) for criminal violations These being in addition to the CAATSA-referenced menus of potential sanctions themselves - for non-US persons, involving various penalties re business in/with the US (and which can also include some possible personal penalties against CEOs / other officers of a sanctioned company) Possible consultation with US authorities Many US, allied-nation and other companies have been seeking private clarifications from State and Treasury Departments re the possible CAATSA application to their Russian dealings For example, note the reported approach to / blessing from State Dep't re a major non-US energy company's participation in Russia deepwater drilling in 2017 (and other companies' reported similar consultations re Russian unconventional resource project participation) And India's apparently getting a specific waiver to protect it from CAATSA section 231 sanctions in connection with a major new arms purchase from Russia, under a special US defense law provision amending CAATSA to allow this (contrast with treatment of China - see slide 42) But most Russian companies seem hesitant to seek such, unless they need to e.g., already-designated SDNs applying for delisting - including En+, RUSAL etc. see slide 36) and some more direct court challenges to SDN and/or Oligarch List designations (see slides 10 and 36 above) Morgan Lewis 61

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