Morgan Lewis US and Russia Sanctions Update
US Sectoral Sanctions - OFAC (cont'd)
General
All four directives (re finance / capital markets, and energy) also expressly prohibit
Any transaction that evades or avoids, has that purpose, or causes a violation of, or attempts to violate any of the
directive prohibitions
Any conspiracy formed to violate any of same
And again, note in this respect the several SSI List supplements to date - singling out, essentially just for anti-
circumvention emphasis, several subsidiaries/affiliates of
Rosneft, Gazprom, Novatek, Transneft and Surgutneftegaz (under Directives 2 and 4)
VEB, VTB, Sberbank, Gazprombank and Russian Agricultural Bank (under Directive 1)
Possible penalties
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Civil:
>$311,922 (per latest March 2021 inflation adjustment) per violation, or up to twice the value of the transaction that
was the basis for the violation
per separate OFAC action, this amount applies to transactions valued at $200,000 or more - and the possible penalty is
$200,000 for transactions valued from $100,000 to $200,000 (and lesser amounts are on a scale for lesser amount
transactions)
Criminal: up to $1 million per violation
And individuals could be imprisoned (for up to 20 years) for criminal violations
And remember: while these OFAC Directives (and the CBW Act sanctions)
-
in general apply directly only to US persons (incl. USD transfers through correspondent banks in the US)
now there is enhanced risk of application to non-US companies/individuals also - per the CAATSA secondary
sanctions (slides 53-54 below)
Morgan Lewis
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