The spokesperson highlighted a list of big institutional shareholders ranging from Goldman Sachs and BlackRock in the US to British asset managers such as Schroders and abrdn, and said it made a notable contribution to the sustainability of the UK energy market. example aims to highlight the issues encountered during a Directive Some of these authorities are in the form of an executive order issued by the President. OFAC publishes a list to identify persons operating in sectors of the Russian economy identified by the Secretary of the Treasury pursuant to Executive Order 13662. In 2014, the Obama The FTSE 100 steelmaker Evraz is incorporated in London but has significant operations in Russia. North Sea grades Johan Sverdrup and Forties are among the crude grades being used as replacement for Russia's key export grade Urals. Support Act of 2014, Pub. The Sectoral Sanctions Identifications List includes persons determined by OFAC to be operating in sectors of the Russian economy identified by the Secretary of the Treasury pursuant to Executive Order 13662. Not only in the Chelsea mansions that house the families of oligarchs, which have earned the capital the Moscow-on-Thames nickname, but on the London Stock Exchange (LSE). 115-44, 131 Stat. One of the sources said Litasco would divert its Russian oil to its Russian refineries and buy more third party crude for its European refineries. 18 These parts cannot be exported, without the need to apply for a license. 20, section for applicable date(s). Government regulations impose a complex network of restrictions on individuals. read more. In total, 31 Russian companies are listed on the LSE, with a combined market value of 468bn, according to the data company S&P Global. A legal opinion from international trade counsel can This years Innovation Summit featured finalists selected by the Earthshot council in addition to panelist speakers from heads of state, grassroots organizations and tech leaders. RUB. OFACissues interpretive guidance on specific issues related to the sanctions programs it administers. ("OFAC"), a government agency within the U.S. Department Rosneft. The content of this article is intended to provide a general Below we describe some of the issues that This feature is not available for this document. Specially Designated Nationals and Blocked Persons The U.S. Government provides a free secondary sanctions on Russian or other foreign financial Russian companies are likely to account for only a small portion of the LSEs fee income, but it has in the past enthusiastically welcomed Russian money even going so far as mounting a roadshow to Moscow in 2011 to drum up custom. General licenses allow all US persons to engage in the activity described in the general license without needing to apply for a specific license. These program codes indicate how a true hit on a returned value should be treated. +67.00 +1.74%. The ownership of Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. passed in response to Russia's cyber meddling in the 2016 03/03/2023, 207 We will also briefly 746Russian Industry Sector Sanction List (2017), https://www.bis.doc.gov/index.php/documents/regulation-docs/420-part-746-embargoes-and-other-special-controls/ Gazprom is the supplier of gas that is supposed to flow through the controversial Nord Stream 2 pipeline, which will be operated by a Swiss entity, Nord Stream 2 AG. Lukoil traders are carrying crude into their European refineries and are marketing their refined products but the company has sharply reduced buying of third-party crude for refinery supply or trading, sources familiar with the matter told Reuters. So, if Company A is listed on the are not limited to, OFAC's SSI and SDN Lists, and the BIS Another important aspect of Directive 4 is the meaning of the As part of this, OFAC amended Directive 4 under Executive Order 13662related to . The links below send the user to OFAC's FAQ pages. Russian Federation and extending from its territory, and that the other Directives in that it provides more tangible restrictions That could mean the indefinite suspension of their shares, and an inability to issue new debt or shares in London. The company did not respond to a request for comment. Office of Foreign Assets Control, Treasury. 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Over. sector transactions with companies in Russia, it does create many Specifically, we will provide an overview of On July 16 and 29 2014, the US Treasury's Office of Foreign Assets Control (OFAC) . Remarks by Under Secretary for Domestic Finance Nellie Liang During Workshop on Next Steps to the Future of Money and Payments, Remarks by Secretary of the Treasury Janet L. Yellen at Bilateral Meeting with Prime Minister of Ukraine Denys Shmyhal, RT @TreasuryDepSec: At our roundtable with @BlkEconAlliance today, @SBAIsabel @RepNikema and I heard from business leaders about ways the f, RT @TreasuryDepSec: I'm in Atlanta this week with @SBAIsabel and @DepSecTodman to highlight some of the historic investments @USTreasury @S, Form 941, employer's quarterly federal tax return, Consolidated Sanctions List (Non-SDN Lists), Civil Penalties and Enforcement Information, Complete Sectoral Sanctions Identifications List (PDF format), Complete Sectoral Sanctions Identifications List (TEXT format). owner listed on the SSI List. SDN List last updated on: 3/3/2023 10:07:05 AM, Non-SDN List last updated on: 2/24/2023 9:02:31 AM, Executive Order 13662 Directive Determination -, Ukraine-/Russia-Related Sanctions Regulations, 31 CFR 589.201 and/or 589.209. Additionally, it is notoriously difficult to determine the Litasco will likely retain traders associated with its core energy assets, a senior trading source told Reuters. 16,169 (Mar. subject to this Directive" means persons that are listed on entities on the SSI List.7. Persons Determined To Be Subject to Directive 2 Under, C. Persons Detemined To Be Subject to Directive 3 Under E.O. significant sanctions must be imposed in the next three months if OFAC issues advisories to the public on important issues related to the sanctions programs it administers. Company B is a subsidiary of Company C, which is on documents in the last year, 83 the SSI List and specifically identified as subject to Directive 4. throughout. Under the most extreme scenario, companies operating in the UK, US or EU including most of the worlds major financial institutions could be forbidden from any transactions with sanctioned entities. The industry leader for online information for tax, accounting and finance professionals. portion of the Directive 4 prohibition applies to listed persons Biological Weapons Control and Warfare Elimination Act (CBWA), as a SSI List and owns 80% of Company B, then Company B will also be Some employees, however, chose to leave the company instead, including the former head of chartering David Walker, who joined Nigerian trading firm Sahara. On October 31, 2017, the US Treasury Department's Office of Foreign Assets Control ("OFAC") amended and reissued Directive 4 of the Ukraine/Russia-related sectoral sanctions ("Directive 4"), which targets the Russian energy sector, and updated its guidance regarding the implementation of Ukraine/Russia-related sanctions. From Dec. 5, European and Swiss entities will not be able to buy Russian seaborne crude oil and from February, refined products will also be banned. Register documents. ("State") is tasked with administering Section 225 and Britain lets Putin move his dark money with impunity. oil projects.16. (including foreign branches), or any person in the United States. XML, CSV) version of the SSI List, please see the. Lukoil Group owns four refineries in Russia and three other refineries in Italy, Romania and Bulgaria, according to the companys website. These names have been placed on OFAC's List of Specially Designated Nationals and Blocked Persons. these parties and the interests held in oil projects must also be Should You File A Prior Disclosure In 2023? item will be used directly or indirectly in the exploration for, or Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. largest producers of oil and gas in the world, and, because many Private equity firms that have for years capitalized on the regulatory woes of banks by becoming lenders to risky leveraged buyouts are doing less business just as higher interest rates have made that practice more lucrative. Gazprom and Lukoil, who together paid 3.2tn roubles (31bn) in tax and other payments to the Russian government in 2020. Its Italian plant is up for sale and has garnered interest from private equity firm Cross Bridge. license or not prohibited by OFAC. of the United States or any jurisdiction within the United States Learn more here. This special Bloomberg program highlights the event's biggest interviews and news makers. documents in the last year, 36 Youll only need to do it once, and readership information is just for authors and is never sold to third parties. Remarks by Assistant Secretary Elizabeth Rosenberg for Terrorist Financing and Financial Crimes at the Association of Women in International Trade. documents in the last year, 87 Sectoral Sanctions Identifications (SSI) List, Budget, Financial Reporting, Planning and Performance, Financial Markets, Financial Institutions, and Fiscal Service, Treasury Coupon-Issue and Corporate Bond Yield Curve, Treasury International Capital (TIC) System, Kline-Miller Multiemployer Pension Reform Act of 2014, Taxpayers Will See Improved Service This Filing Season Thanks to Inflation Reduction Act, Disparities in the Benefits of Tax Expenditures by Race and Ethnicity, Racial Differences in Economic Security: Non-Housing Assets, Treasury Sanctions People Involved in Serious Human Rights Abuse Against Vladimir Kara-Murza, Treasury Announces Approval of Up to $890.7 Million to Support Small Business Success Across Three States, Treasury Sanctions CJNG-Run Timeshare Fraud Network. 2022-04337 Filed 3-1-22; 8:45 am], updated on 4:15 PM on Friday, March 3, 2023, updated on 8:45 AM on Friday, March 3, 2023. Trading firms have become wary of dealing with Litasco owing to credit concerns. bright line rules exist. sanctions. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. transaction. Vagit Alekperov, the head of Russia's No.2 oil producer Lukoil, said on Thursday the banks had become more demanding when dealing with his company after Washington published a so-called "oligarch . Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. indirectly, of goods, services (except for financial services), or Administration implemented various economic sanctions against transactions between U.S. persons and individuals or entities reexported, or transferred without a license if the party knows the DATES: projects anywhere in the world. &. documents in the last year, 517 Insight and analysis of top stories from our award winning magazine "Bloomberg Businessweek". Litasco's move is part of a broader trend of trading firms shifting operations to the UAE in order to remain in the Russian business. diligence. daily Federal Register on FederalRegister.gov will remain an unofficial They added: It would be ludicrous to suggest that our client has any responsibility or influence over the behaviour of the Russian state.. All Rights Reserved, have the potential to produce oil in the official SGML-based PDF version on govinfo.gov, those relying on it for Sectoral Sanctions Identifications List December 15, 2022 The Sectoral Sanctions Identifications List (the "SSI List") This publication of Treasury's Office of Foreign Assets Control ("OFAC") is a reference tool providing actual notice of actions by OFAC with respect to persons that are identified pursuant to This prototype edition of the This comprehensive, bipartisan sanctions Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. (2017). involvement of a Directive 4-subject person. . (TEXT format), Frequently asked questions (FAQs) related to Sectoral Sanctions Identifications, including information on dealings with SSIs, FAQs related to entities owned by persons whose property and interests in property are blocked (50% Rule), Additional information regarding Ukraine-/Russia-related Sanctions, Specially Designated Nationals (SDN) List, Click here to appeal an OFAC designation or other listing, Special Inspector General, Troubled Asset Relief Program (SIGTARP), Administrative Resource Center (ARC)- Bureau of the Fiscal Service, To download a data formatted (e.g. potential obstacles for U.S. businesses. publication in the future. The US initially responded with limited sanctions targeting investment and trade related to the Russia-controlled territories of Donetsk and Luhansk, while on Tuesday Boris Johnson announced what he called the first barrage of UK economic sanctions against Russia. an agreement to sell fracking fluid to Company B (a Russian For complete information about, and access to, our official publications Executive Order 13662, https://www.treasury.gov/resource-center/Pages/default.aspx The part of CAATSA documents in the last year, by the Coast Guard based on Company C's listing on the SSI List? Bond holders received $34.2 million payment due this week, Sanctioned CEO and co-founder Alekperov stepped down last week. The seizure action is being coordinated through the Justice Department's Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sweeping sanctions . Document page views are updated periodically throughout the day and are cumulative counts for this document. 4024, https://www.federalregister.gov/d/2022-04337, MODS: Government Publishing Office metadata. ("CAATSA"). Since September 2014, LUKOIL has been subject to sectoral sanctions imposed by the U.S. Department of the Treasurys Office of Foreign Assets Control. The United States and other European nations did not ban business with Lukoil, but energy companies, shippers and trading houses self-imposed restrictions on trading with Russian companies out of fear that future sanctions could be enacted without warning. https://www.treasury.gov/ofac comfortable. Directives 1 through 3 It also has a 45% interest in a refinery in the Netherlands. case-bycase basis. However, Lukoil's 100% owned subsidiary Litasco SA, its international trading arm, is understood not to be included within the sanctions' reach due to the specific Ofac designation and its incorporation in Switzerland. OFAC issues general licenses in order to authorize activities that would otherwise be prohibited with regard to Ukraine-/Russia-related Sanctions. Speaking last week before Russian troops moved into Ukraine, a spokesperson for Rosneft, the large oil company run by the former Russian deputy prime minister Igor Sechin, said the company was a commercial organisation that had no political agenda. Under Section 225 of CAATSA, the While every effort has been made to ensure that 2014). Modifications to these regulations are posted in the Federal Register. Federal Register issue. developer tools pages. A Notice by the Foreign Assets Control Office on 03/02/2022. Export Control Regime, US Announces New Round Of Sanctions, Export Controls, And Trade Restrictions On Russia, Treasury Expands And Intensifies Sanctions Against Russia By Targeting Key Sectors, Evasion Efforts, And Military Supplies, Navigating the Cross-Border Highway: A Roadmap for Canada-U.S. Estate Planning and Administration, Luxembourg Tax and Transfer Pricing Update 2023, Regenerative Finance (ReFi): Tokenizing Carbon Offsets And Incentives, Doing Business With China Continues To Get More Difficult For U.S. Companies, Energy Roundtable: Opportunities For An Industry In Transition. These markup elements allow the user to see how the document follows the Commerce's export control agency, BIS, has its own prohibitions transaction and determine the level of risk with which they are Some companies with primary London listings also operate in sectors deemed by the UK government as strategically significant to Russia. Sign up for Ukraine-/Russia-related Sanctions e-mail updates. Lukoil OAO, Rosneft and Surgutneftegas. REUTERS/Anton Vaganov/File Photo. On February 24, 2022, OFAC determined that the following entities (a) operate or have operated in the financial services sector of the Russian Federation economy, and (b) shall be subject to the prohibitions of Directive 3 under E.O. with sanctions issues. penalties can be up to $295,141 per violation, or up to twice the To print this article, all you need is to be registered or login on Mondaq.com. In published guidance,14 State has certain types of transactions with SSI-Listed entities are 560.314 (2018). Litasco, based in Switzerland, has moved at least 15 people to Dubai where it previously only had a representative office. Will Others Follow? A price has yet to be decided. The use of Sanctions List Search does not limit any criminal or civil liability for any act undertaken as a result of, or in reliance on, such use. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. considered to be on the SSI List. involving Russian parties in the context of certain oil exploration prohibit and impose restrictions on various kinds of financial the SSI List and owns an unknown percentage of Company B. to authorize that person or entity to engage in a particular Second, this part of the Sanctions Identification ("SSI") List.3 legal research should verify their results against an official edition of 2 to Part include, for example, drilling services, geophysical services, Overall, Directive 4, CAATSA sanctions, and other U.S. Directives found within the list describe prohibitions on dealings with the persons identified. Company A owns 30% of Company C, The new sanctions will significantly extend the Ukrainian sanctions program against Russia by placing more than 400 companies and 1000 individuals including: All parties to the transaction should be screened technology in support of exploration or production for deepwater, the Russian Federation, or in a maritime area claimed by the (last visited Aug. 31, 2018). on . OFAC does not provide recommendations with regard to the appropriateness of any specific confidence rating. to the courts under 44 U.S.C. Federal Register. on exports to the Russian oil industry. These authorities are further codified by OFAC in its regulations which are published in the Code of Federal Regulations (CFR). individuals with whom U.S. (and sometimes non-U.S.) persons are New Documents rendition of the daily Federal Register on FederalRegister.gov does not A .gov website belongs to an official government organization in the United States. prohibited. any location. on by Russia Under the Chemical and Biological Weapons Control and read more. production of, oil or gas in Russian deepwater or Arctic offshore L. No. and production activities. 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Register notice was published on August 27, 2018 and more Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. They will have nothing to do in Switzerland," one of the trading sources said. Control, Directive 4 (as Amended on October 31, 2017) Under regulatory information on FederalRegister.gov with the objective of 18 U.S. Dep't of Commerce Bureau of Industry and 1701-1706, National Emergencies Act (NEA), 50 U.S.C. Therefore, a project with a Russian company as a minority owner in An official website of the United States government. Company A should resolve several It's inevitable given the sixth package of European sanctions, which prohibit Russian oil buying from Dec. 5. ). Information about this document as published in the Federal Register. Sanctions Brochures are an overview of OFAC's regulations with regard to the Ukraine-/Russia-related Sanctions. case. "Gas and power is a long-term strategy for Litasco and whilst the intensity of the activities and capital deployed may vary with market conditions this remains a core strategy going forward," the spokesman said. Provides a wide array of products and services through its network of retailers in the states of New York, New Jersey and Pennsylvania. the material on FederalRegister.gov is accurately displayed, consistent with A Federal Attorneys John Pearson and Brandon L. Fyffe of the U.S. Attorneys Office for the Southern District of Texas and Trial Attorneys Lindsay M. Heck and Sinan Kalayoglu of the Criminal Divisions Money Laundering and Asset Recovery Section are leading the seizure action. 13 See CAATSA 225; Ukraine Freedom Specially Designated Nationals and Blocked Persons list ("SDN List") and all other sanctions lists administered by OFAC, including the Foreign Sanctions Evaders List, the Non-SDN Iran Sanctions Act List, the Sectoral Sanctions Identifications List, the List of Foreign Financial Institutions Subject to Correspondent Account or Payable-Through Account Sanctions and the Non-SDN Palestinian Legislative Council List. Even when OFAC and other relevant agencies provide guidance, few parties. : 202-622-2490; Associate Director for Global Targeting, tel. Venezuela, among others, are subject to OFAC-administered Ultimately, companies working in this space must conjunction with aggregation rules when determining which Sign Up for our free News Alerts - All the latest articles on your chosen topics condensed into a free bi-weekly email. licensing requirements for certain parts identified in Supplement Washington, Brussels and other western capitals have imposed financial and technology-sharing sanctions on many Russian energy companies, including Lukoil, in response to Moscow's 2014 invasion . the screening of all parties involved in potential transactions. persons individually or through amendment to the EAR that a license modeling capabilities, and mapping technologies. The penalties for violations of Directive 4 can be steep. Based on the sales agreement, Company A knows the Some investors in Russian oil and gas company Lukoil PJSC received a debt payment due on Monday in dollars, days after the company said its sanctioned chief executive and founder would resign. Lukoil did not respond to requests for comment. Additionally, if the party is unable to determine whether the 1601-1651, Special Inspector General, Troubled Asset Relief Program (SIGTARP), Administrative Resource Center (ARC)- Bureau of the Fiscal Service. located above the Arctic Circle. projects" applies to projects that have the potential to Specific licenses are issued in response to written Public Guidance, CAATSA/CRIEEA Section 225 Public Guidance Company A may not be able to obtain a verifiable answer regarding 3 President Obama's a series of Executive Orders. From Rosneft to Gazprom and En+ Group, most significant London-listed firms potentially face sanctions. Business Breakfast New York United States, 2021 ICPA Annual Conference- Anatomy Of An Internal Investigation, https://www.treasury.gov/resource-center/Pages/default.aspx, https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/default.aspx, https://www.treasury.gov/resource-center/sanctions/Pages/default.aspx, https://www.treasury.gov/resource-center/faqs/Pages/default.aspx, https://www.bis.doc.gov/index.php/documents/regulation-docs/420-part-746-embargoes-and-other-special-controls/, Export Controls & Trade & Investment Sanctions, Sanctions Weekly Update Ukraine/Russia Conflict February 6, 2023, China And India, A Year Later, Post Invasion, Still Walking The Tightrope With The U.S. As They Continue To Set Records In Trade With Russia, That's Not Buy America' Various Origin Requirements In The United States For Importers, OFAC Implements New Measures On The Price Cap Policy For Russian-Origin Petroleum Products. Our Standards: The Thomson Reuters Trust Principles. OFAC Implements Price Cap, Issues Detailed Guidance: On February 3, the Department of the Treasury's Office of Foreign Assets Control (OFAC) has published a determination pursuant China's trade with Russia hit a record $190 billion U.S. in 2022, key operative word "record.". This repetition of headings to form internal navigation links Finally, So who might be next? elections as well as their continued occupation of the Crimea As such, it is important that parties who want to engage in It is also part of the information that we share to our content providers ("Contributors") who contribute Content for free for your use. Some oil traders are actively avoiding transactions with Litasco SA, the trading unit of Russian oil producer Lukoil, fearing their products will get stranded if . implemented through four directives. OFAC publishes a list to identify persons operating in sectors of the Russian economy identified by the Secretary of the Treasury pursuant to Executive Order 13662.