Morgan Lewis US and Russia Sanctions Update
US Direct Sanctions - SDNS (cont'd)
SDN Delistings
Further notes re SDN delisting:
The Deripaska companies' delistings were based in large part on the unintended consequences of the SDN designations
for the US (and world) aluminum market etc. - and thus may well not be readily achieved by other Russian SDNs
Deripaska's GAZ Group (automotive giant) might eventually also be SDN-delisted upon ownership restructuring for
Deripaska decontrol etc. - per July 2020 extensions of GLs to 22 Jan. 2021 (and now further extended in late Dec.
2020 to 21 July 2021):
GL 13P: for divestment / transfer of debt and equity holdings etc.
GL 15]: for maintenance/wind-down of pre-existing commercial relations - but also allowing a broad range of new
commercial activities with GAZ and its controlled entities (and imposing new regular reporting requirements on
GAZ-including monthly certifications that the Group is not acting for or on behalf of Deripaska or other SDN, and
that control is in the hands of the Board and shareholders)
Also OFAC July 2020 related amendments to several FAQs
Still pending Vekselberg and Deripaska US court challenges against their OFAC SDN designations / consequences
Vekselberg- and Renova-linked US investment management cos. and GP entities, which are not SDNS but whose assets and
related proceeds were blocked because of Vekselberg/Renova majority ownership of asset-holding entities, filed complaint in
US federal court in 2019 – basically challenging OFAC's 50% rule as applied to them - case dismissed in Sept. 2020
And reported Dec. 2020 Swiss court decision rejecting Vekselberg co. claim against bank to unblock USD funds (see slide 58)
OFAC notified Mr. Deripaska in Jan. 2020 that he is unlikely to be delisted (see letter and news report), and OFAC formally
denied his request in March 2020 (see federal court case complaint and current status report)
But note Russian-American physicist/entrepreneur V. Gapontsev's successful legal challenge to his 2018 OFAC "Oligarch
List" designation – seems a special case: notified by OFAC Sept. 2019 letter that he "is not an oligarch in the Russian
Federation for purposes of Section 241 of CAATSA" (see slides 55-56); this lifted cloud from him and his Mass.-based
company IPG Photonics
And also March 2020 delisting of Khudainatov's Independent Petroleum Co. (NNK) and a sub (had been designated in
2017 for shipping petroleum products to North Korea)
Morgan Lewis
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