Morgan Lewis US and Russia Sanctions Update
CBW Act Sanctions (cont'd)
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OFAC CBW Act Directive of 2 August 2019 - provides definitions/details on the US
bank lending sanctions, confirming that:
➤ foreign branches of US banks, as well as US branches and subs of foreign banks, are covered
gives further wide definition of US "bank" - including depositories, securities/options brokers
and dealers, forward contract and foreign exchange merchants, securities and commodities
exchanges, investment companies, and employee benefit plans
confirms that "Russian sovereign" means any Russian ministry, agency or sovereign fund
(including Central Bank, National Wealth Fund, Ministry of Finance) - but does not include
Russian state-owned enterprises (though again, keep in mind OFAC Directives 1 and 2)
State Dep't Notice in 26 August 2019 Fed. Reg.
memorialized the new CBW-related export control sanction, but also incorporated and
appeared to somewhat expand/adjust the first-round export control sanction (slides 63-66)
so special caution is needed with regard to any possibly sensitive exports/reexports to
Russia (and all the more so per newest Commerce/BIS rules - see generally slides 10, 25-32)
Note also the risk of imposition of secondary sanctions on non-US persons
under CAATSA (see slides 46-59) for certain violations of the CBW Act sanctions
The CBW Act (and the EO triggering this second round) isn't among the sanctions
acts specifically covered under CAATSA (see its section 222(a))
But CAATSA section 228 catches anyone who "facilitates a significant transaction" for
or on behalf of "any person subject to [US] sanctions..." (i.e., could mean any
sanctions)
Morgan Lewis
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