Morgan Lewis US and Russia Sanctions Update
CAATSA / Guidances / Lists (cont'd)
CAATSA - potential penalties (same as for OFAC / BIS regs. violations - based on underlying laws)
Civil: $311,922 (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 (see primarily section 235) 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)
note also OFAC's 14 Dec. 2020 announcement of new Non-SDN Menu Based (NS-MBS) list - primarily re CAATSA section
235
Possible consultation with US authorities
Many US, allied-nation and other companies have been seeking private clarifications from State and Treasury
Departments (and licenses) 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 41)
But most Russian companies seem hesitant to seek such, unless they need to
...
e.g., already-designated SDNS applying for delisting - including En+, RUSAL, GAZ, etc. see slide 36
and some more direct court challenges to SDN and/or Oligarch List designations (see slide 36 above)
Morgan Lewis
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