US Sectoral Sanctions

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 - Civil: >$307,922 (per latest April 2020 inflation adjustment) per violation, or up to twice the value of the transaction that was the basis for the violation - per recent 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 54-55 below) Morgan Lewis 26

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