US Sectoral Sanctions
CAATSA / Guidances / Lists (cont'd)
CAATSA stiffened existing OFAC Directives 1, 2 and 4 (this is essentially for US persons - see slides 18-20)
Directive 1: permissible "new debt" of designated Russian banks was reduced from max. 30 to 14 days
Directive 2: permissible new debt of designated Russian energy cos. was reduced from max. 90 to 60 days
Directive 4: the prohibition on goods / services / technology involvement in deepwater, Arctic offshore or shale projects
was expanded from Russia to worldwide
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but, for outside Russia, applies only to "new" projects (see slide 21 above)
if one or more of the designated Russian energy companies has ≥33% ownership or >50% voting interest
All of this was then implemented by OFAC amendments of the relevant Directives - see slides 19-26 above
Per CAATSA section 223(a), expansion of potential industry coverage of the OFAC sanctions
(beyond financial services, energy, engineering / defense-related) - see FAQ 539
to state-owned (i) railway (= RZhD, the Russian State Railway), and (ii) mining & metals companies
but shipping industry was left off this expanded list; and nuclear power industry also didn't appear despite previous
consideration of including it
and even as to railway and mining & metals sectors, the Oct. 2017 OFAC Guidance makes clear that this is only
discretionary - no such actual expansion since then to date, and no sign of its coming
Requiring review/approval by Congress
per CAATSA section 216 – before President can terminate or waive existing sanctions (or grant any non-routine-type
license that "significantly alters" foreign policy re Russia)
apparently including SDN delistings - such as those of of En+, RUSAL and EuroSibEnergo last year (Congress was
notified, and opposition was insufficient to block)
Reality check: Despite all the "President shall impose" CAATSA sanctions language (see slides 51-54)
to date there has been no case of such imposition on any non-US person save for a few in the cyber-security and
defense sectors – i.e., none yet in the purely civilian-economy space (see slides 41-43 above)
but notable recent secondary sanctions imposed on non-US persons under Venezuela (two Rosneft oil trading subs.) and
Iran (two Chinese entities) sanctions programs (see slides 11-12)
Morgan Lewis
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