OFAC Issues, Amends CAATSA-Related FAQs
The Office of Foreign Assets Control Jan. 5 issued two new frequently asked questions and amended two other FAQs to clarify sanctions against Russia under the Countering America’s Adversaries Through Sanctions Act. The FAQs cover OFAC’s non-blocking menu-based sanctions, certain definitions and other sanctions clarifications.
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In new FAQ 869, OFAC said its non-blocking menu-based sanctions described in CAATSA do not apply to entities owned 50% or more by a person designated under those same menu-based sanctions. The sanctions would apply in such a scenario only if OFAC “separately lists the owned entity on the [Non-Specially Designated National Menu-Based Sanctions (NS-MBS) List] as subject to the same sanctions.” OFAC also clarified that entities are subject to sanctions if they are owned 50% or more by anyone listed on the agency’s SDN List.
In new FAQ 870, OFAC clarified how its “loan and credit-related” sanctions apply to people listed on the agency’s NS-MBS List. OFAC said U.S. financial institutions are blocked from making loans or providing credit totaling more than $10 million in any 12-month period to the sanctioned person. Exceptions are available if the sanctioned person is “engaged in activities to relieve human suffering and the loans or credits are provided for such activities,” OFAC said.
The agency said this restriction is “not a blocking sanction, but rather a limit on the total amount of loans or credits that can be provided to the identified person within the specified time period.” OFAC also said U.S. banks must limit their loans or credits to the sanctioned person to $10 million in any one-year period “regardless of whether part or all the loans or credits in question have been repaid during the period.” OFAC also clarified that the restriction is an “institution-by-institution limit” and not a limit on the “total loans or credits from all United States financial institutions collectively in the specific time period.”
Amended FAQ 545 covers various sanctions-related definitions, including foreign person, knowingly, materially violated, “facilitation … for or on behalf of,” significant transaction, and deceptive or structured transaction. Amended FAQ 546 covers how the sanctions apply to various OFAC designations.