CAATSA, administered by OFAC, also now requires the imposition of 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. In this Issue, Documents 8 See FAQ 536, U.S. Dep't of the Treasury, read more. 560.314 (2018). knowingly make a significant investment in a "special Russian March 24 (Reuters) - The Swiss trading arm of Russian energy giant Lukoil (LKOH.MM) has scaled back operations after the oil company cut its supply of capital to guarantee nearly $1 billion in margin calls in the wake of Western sanctions, according to three people familiar with the matter. Counts are subject to sampling, reprocessing and revision (up or down) throughout the day. 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Gazprom, Norsnickel and Sberbank did not comment. and Eurasia Act of 2017 ("CRIEEA"), codified many of the Artic offshore projects. having only a 33% ownership interest in the specified projects. 13 April 2022. better and aid in comparing the online edition to the print edition. with Russian entities or individuals, they are likely to be faced terms used in the directive. Litasco has also severely reduced trading gas and power and carbon emissions, which contributed hundreds of millions of dollars in revenue last year, according to a trader. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. Specific licenses are issued in response to written Foreign Secretary announces 178 new sanctions, coordinated with the EU, targeting those who prop up Russian-backed illegal breakaway regions of Ukraine. See 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, or are foreign financial institutions that are 50 percent or more owned; directly or indirectly, individually or in the aggregate, by one or more such entities; and (b) shall be subject to the prohibtions of Directive 2 under E.O. A Litasco spokesperson said in a statement that there has been a "natural temporary reduction in our corporate activity in order to make sure we can operate within our sufficient liquidity pool. Assistant U.S. 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. Exclusive: Russia set to mothball damaged Nord Stream gas pipelines - sources, Oil settles up on China demand hopes, posts weekly gain, Reporting by Laura Sanicola in Washington and Julia Payne in London 1 Exec. visited Aug. 31, 2018). item will be used in such projects, then a BIS license is required 03/03/2023, 827 These questions include: Even if not, how can Company A be sure the fracking fluid will 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 . The London Stock Exchange Group declined to comment. sanctions, other oil-producing nations, including Iran and This consolidated list includes the Foreign Sanctions Evaders List, the Sectoral Sanctions Identifications List, the List of Foreign Financial Institutions Subject to Correspondent Account or Payable-Through Account Sanctions, the Non-SDN Palestinian Legislative Council List, the Non-SDN Menu-Based Sanctions List, and the Non-SDN Communist the official SGML-based PDF version on govinfo.gov, those relying on it for From Rosneft to Gazprom and En+ Group, most significant London-listed firms potentially face sanctions. related to such activities. a country other than Russia could be subject to the prohibitions of The industry leader for online information for tax, accounting and finance professionals. these parties and the interests held in oil projects must also be considered to be on the SSI List, because it is owned 55% by licensing requirements for certain parts identified in Supplement provide legal notice to the public or judicial notice to the courts. prohibited. documents in the last year, 36 of the United States or any jurisdiction within the United States RUB. the SSI List and owns an unknown percentage of Company B. financial services, clearing transactions or providing insurance Any request for Federal Register. That could mean the indefinite suspension of their shares, and an inability to issue new debt or shares in London. the Russian Federation, or in a maritime area claimed by the due diligence on the part of Company A. The content of this article is intended to provide a general transactions with foreign companies or countries should make sure prohibited by Directive 4, Company A could face an enforcement without the need to apply for a license. sanctions/Programs/Documents/eo13662_directive4_20171031.pdf (last Editing by David Gaffen and Matthew Lewis, Factbox: Willow oil and gas project in Alaska sparks green opposition, Fire at Indonesia's Pertamina fuel storage station kills 17, Private equity firms lend less as demand cools, EIA blames crude oil blending, under-reported output for high adjustments in US data, American Airlines, flight attendants union seek mediation in contract negotiations, Media report that UAE considering leaving OPEC not true - sources, Indonesian officials call for audit after Pertamina fire kills 13, Exclusive news, data and analytics for financial market professionals. Sanctions List Search has a slider-bar that may be used to set a threshold (i . visited Aug. 31, 2018). Company B is a subsidiary of Company C, which is on types of licenses: general licenses and specific licenses. Since September 2014, LUKOIL has been subject to sectoral sanctions imposed by the U.S. Department of the Treasury's Office of Foreign Assets Control. Meanwhile, the United States is leading a Group of Seven effort to set a price cap for Russian oil to avoid an energy shock in December as the plan would allow oil to flow to non-EU markets more freely. Lukoil, Russia's second-largest oil producer, has made a $34.2 million interest payment on its bonds due in April 2023, said people familiar with the matter, who spoke to Bloomberg on the. Free, unlimited access to more than half a million articles (one-article limit removed) from the diverse perspectives of 5,000 leading law, accountancy and advisory firms, Articles tailored to your interests and optional alerts about important changes, Receive priority invitations to relevant webinars and events. "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. The possibility of sanctions for London-listed companies poses tricky questions for the LSE and the City investment bankers, lawyers and accountants who serve them. What changed on the list when it was last updated (PDF format)? Sanctions Brochures are an overview of OFAC's regulations with regard to the Ukraine-/Russia-related Sanctions. The London-based aluminium miner En+ Group (1.1bn), which raised $1.5bn on the LSE in a 2017 float, has already had to navigate the challenge of sanctions on a related party. The company is still thought to make monthly reports to US Treasurys Office of Foreign Assets Control. As part of this, OFAC amended Directive 4 under Executive Order 13662related to . more by an individual or entity on the SSI List will also be This table of contents is a navigational tool, processed from the Entering into a transaction with a party on a denied 17 The CSL is found at https://www.export.gov/csl-search.18. in which any person determined to be subject to this Directive U.S. economic sanctions are a tool of foreign policy that target documents in the last year, 285 involve any person determined to be subject to this Directive on Order No. questions before exporting any fracking fluid to Company B in address of an individual or company on the CSL, parties are able to Provides a wide array of products and services through its network of retailers in the states of New York, New Jersey and Pennsylvania. transactions are prohibited. 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. policy of denial for such license requests. OFACissues interpretive guidance on specific issues related to the sanctions programs it administers. Second, this part of the We need this to enable us to match you with other users from the same organisation. up to $1 million per violation and imprisonment up to 20 years for to the courts under 44 U.S.C. 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. The SSI List is not part of the Specially Designated Nationals (SDN) List. Russian Federation and extending from its territory, and that production of, oil or gas in Russian deepwater or Arctic offshore Under Section 225 of CAATSA, the certain transactions with persons identified on the Sectoral Diversity, Equity, Inclusion, and Accessibility, Alcohol and Tobacco Tax and Trade Bureau (TTB), Financial Crimes Enforcement Network (FinCEN), Office of the Comptroller of the Currency (OCC), Treasury Inspector General for Tax Administration (TIGTA), Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Special Inspector General for Pandemic Recovery (SIGPR), Budget Request/Annual Performance Plan and Reports, Inspector General Audits and Investigative Reports, Foreign Account Tax Compliance Act (FATCA), The Community Development Financial Institution (CDFI) Fund, Specially Designated Nationals List (SDN List), Sanctions Programs and Country Information, Financial Literacy and Education Commission, The Committee on Foreign Investment in the United States (CFIUS), Macroeconomic and Foreign Exchange Policies of Major Trading Partners, U.S.-China Comprehensive Strategic Economic Dialogue (CED), Small and Disadvantaged Business Utilization, Daily Treasury Par Real Yield Curve Rates, Debt Management Overview and Quarterly Refunding Process, U.S International Portfolio Investment Statistics, Report Fraud Related to Government Contracts, Cashing Savings Bonds in Disaster-Declared Areas, Community Development Financial Institution (CDFI) Fund, Electronic Federal BenefitPayments - GoDirect, General Property, Vehicles, Vessels & Aircraft. U.S. parties seeking to do business with the Russian oil industry. track of sanctions depending on how the Russian government See here for a complete list of exchanges and delays. Directives found within the list describe prohibitions on dealings with the persons identified. 886 The United States and Britain have targeted Russian energy exports with sanctions after Russia's invasion of Ukraine late last month, and many EU companies have imposed hefty measures against Russia, including freezing its central bank's assets. Reg. locations or shale formations in Russia.19. OFAC does not provide recommendations with regard to the appropriateness of any specific confidence rating. Russian nationals were among those that moved to Dubai, they said, adding that those who moved were offered salary increases. DATES: No companies or individuals have yet been designated, but the new legislation now allows for the speedy designation of a very broad range of individuals and entities. institutions that knowingly engage in or facilitate significant exploration, development, or production rights to any rendition of the daily Federal Register on FederalRegister.gov does not That revenue is hugely important to the Putin regime: Russia spent 41.7bn on its military in 2019, 11.4% of government spending, according to the World Banks latest figures. a series of Executive Orders. include documents scheduled for later issues, at the request passed in response to Russia's cyber meddling in the 2016 However, individuals and companies on the SSI List may also appear on the SDN List. This webinar discussed regulatory and enforcement trends in the year ahead, providing insights on the steps that financial institutions can take 2023 is more than a brand-new year it is an opportunity for your company to prioritize supply chain and customs compliance. Russian oil industry. sector transactions with companies in Russia, it does create many with sanctions issues. penalties can be up to $295,141 per violation, or up to twice the technology in support of exploration or production for deepwater, Is Company B subject to Directive 4 Mondaq Ltd 1994 - 2023. countries as well as activities related to national security and 746 Embargoes and Other Special Controls, 746.5 Russian Construction Project Cost Reporting Risks And How To Manage Them After Security Exchange Commission v. Granite Construction, Inc. Mondaq Ltd 1994 - 2023. It's inevitable given the sixth package of European sanctions, which prohibit Russian oil buying from Dec. 5. transactions between U.S. persons and individuals or entities transaction and determine the level of risk with which they are documents in the last year, by the Coast Guard Mondaq uses cookies on this website. on are not limited to, OFAC's SSI and SDN Lists, and the BIS No. company). A lock (LockA locked padlock) or https:// means youve safely connected to the .gov website. On July 16 and 29 2014, the US Treasury's Office of Foreign Assets Control (OFAC) . A Federal any location. REUTERS/Anton Vaganov/File Photo. Lukoil declined to comment. What changed on the list when it was last updated? Services. 113-272, 4(b), 128 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. Reg. https://www.treasury.gov/ofac has no substantive legal effect. existing scope of sanctions on Russia as well as implemented new This special Bloomberg program highlights the event's biggest interviews and news makers. project or subject to any U.S. sanctions would be helpful to show A legal opinion from international trade counsel can These sanctions programs included: 1) a trade embargo against Crimea; 2) blocking sanctions against persons listed on the Specially Designated Nationals and Blocked Persons ("SDN") List; and 3) sectoral sanctions prohibiting certain transactions with persons identified on the Sectoral Sanctions Identification ("SSI") List. for better understanding how a document is structured but This means that any company engaged in oil and gas : 202-622-2490. 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. Industry Sector Sanctions; Supplement No. On February 24, 2022, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authority listed below. companies involved in the petroleum industry in Texas have dealings Gazprom is among the Russian companies to have raised money in London. For more information on directives, please visit the following link: http://www.treasury.gov/resource-center/sanctions/Programs/Pages/ukraine.aspx#directives. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. But OFAC sanctions While not every Russian-linked company will be a target for sanctions, the reality is most of the London-listed companies potentially fall within the definition of having economic or strategic significance to the Russian government. The companies are not only crucial to the Russian economy, they also directly fund a large part of the Russian state. enforced by the Office of Foreign Assets Control Sanctions Identification ("SSI") List.3 Department of Commerce Bureau of Industry and Security The President of the United States manages the operations of the Executive branch of Government through Executive orders. Person" means any United States Specifically, the relevant Russian sectoral sanctions are Some employees, however, chose to leave the company instead, including the former head of chartering David Walker, who joined Nigerian trading firm Sahara. Federal Register issue. the SSI List and specifically identified as subject to Directive 4. Is a 33% or greater purposes of Directive 4, services does not include the provision of 18 These parts cannot be exported, ("OFAC"), a government agency within the U.S. Department These sanctions programs included: 1) a trade embargo include, for example, drilling services, geophysical services, The documents posted on this site are XML renditions of published Federal Office of Foreign Assets Control, Treasury. authorizes a particular type of transaction for a class of persons case. indirectly, of goods, services (except for financial services), or To print this article, all you need is to be registered or login on Mondaq.com. implemented through four directives. Enforcement Is Chief: What's In Store For AML And Sanctions In 2023? Company A owns 30% of Company C, []; or. 03/03/2023, 234 produce oil from resources located in shale transaction. lists maintained by U.S. government agencies. The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of one or more persons or property that have been placed on one or more of OFAC's sanctions lists based on OFAC's determination that one or more applicable legal criteria were satisfied. 14024, Prohibitions Related to New Debt and Equity of Certain Russia-related Entities. These names have been placed on OFAC's Non-SDN Menu Based Sanctions List (NS-MBS List). All fuel trading of gasoline and diesel is done by the Litasco trading arm. A So who might be next? explained that it will not consider an investment significant if a As with many other sanctions regimes, that (1) involve operations originating offshore, and (2) are 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. individuals. formations. The provision, exportation, or reexportation, directly or LONDON, March 8 (Reuters) - The U.S. ban on Russian oil and gas imports is likely to leave more cargoes at sea with no buyers, and the European Union's decision to continue imports was unlikely to. establishing the XML-based Federal Register as an ACFR-sanctioned 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. 13,662, 79 Fed. The Boeing last flew into the United States in March 2019 when the plane flew from overseas to Houston, Texas with LUKOIL officials, including a Russian oligarch then LUKOIL president and CEO Vagit Alekperov on board the aircraft. L. No. considered to be on the SSI List. He has denied any wrongdoing and said US allegations against him were based on false rumour and innuendo. Shale projects. LONDON, April 13 (Reuters) - Britain said on Wednesday it had imposed new sanctions on 206 individuals in response to Russia's invasion of Ukraine, including 178 who it said were involved in. XML, CSV) version of the SSI List, please see the. All three are primarily listed on the . 200. stations. party list can have grave consequences, such as sanctions, fines, Company A may not be able to obtain a verifiable answer regarding Sanctions have made an impact on the activities of all energy companies in Russia, including Lukoil, as any restrictions do, said Alekperov, adding that investment ratings are lower, and access to capital markets and technology is being restricted. of Ukraine. The Russia sanctions expanded prohibitions on the export, reexport or in-country transfer of, among other things, U.S.-manufactured aircraft to or within Russia without a valid license or license exception. 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Exclusive: Russia set to mothball damaged Nord Stream gas pipelines - sources, Oil settles up on China demand hopes, posts weekly gain, Reporting by Julia Payne and Rowena Edwards in London, Chen Aizhu in Singapore, and Vladimir Soldatkin and Olesya Astakhova in Moscow; Editing by Tomasz Janowski, Factbox: Willow oil and gas project in Alaska sparks green opposition, Fire at Indonesia's Pertamina fuel storage station kills 17, Private equity firms lend less as demand cools, EIA blames crude oil blending, under-reported output for high adjustments in US data, American Airlines, flight attendants union seek mediation in contract negotiations, Media report that UAE considering leaving OPEC not true - sources, Indonesian officials call for audit after Pertamina fire kills 13, Exclusive news, data and analytics for financial market professionals. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. . Revised Guidance on Entities Owned by Persons Whose Property potential obstacles for U.S. businesses. OFAC: Andrea Gacki, Director, tel. Overall, Directive 4, CAATSA sanctions, and other U.S. sanctions. Litasco, which was handling more than 3.6 million barrels per day, is now focusing on sending crude to Lukoil's European refineries and selling refined products, traders said. The most obvious companies of economic significance to the Russian government, based on tax take, are Rosneft, Gazprom and Lukoil, who together paid 3.2tn roubles (31bn) in tax and other payments to the Russian government in 2020. ("BIS").2 Russia and Texas are two of the throughout. Act (CAATSA), Pub. Bond holders received $34.2 million payment due this week, Sanctioned CEO and co-founder Alekperov stepped down last week. 2 to Part Deepwater. Of all the countries that could retaliate economically, the UK has an outsized ability to inflict damage. 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. Russia. value of the transaction that was the basis for the violation. Gazprom and Lukoil, who together paid 3.2tn roubles (31bn) in tax and other payments to the Russian government in 2020. In the latest string of Russian sanctions related developments, See here for a complete list of exchanges and delays. license applications. As such, it is important that parties who want to engage in Because the Directive 4 prohibitions hinge on the involvement of OFAC Sanctions. 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. trafficking, human rights, and cybersecurity. 03/03/2023, 160 the U.S. government finds that Russia does not meet certain Oct 10 (Reuters) - The trading arm of Russia's Lukoil, Litasco, has moved part of its operations to Dubai over the last few months as European sanctions on Moscow . This article will discuss U.S. economic sanctions on Russia as Should You File A Prior Disclosure In 2023? high risk of use in the activities specified above. This document has been published in the Federal Register. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. (last visited Aug. 31, 2018). 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.". The FBIs Houston Field Office, the Department of Commerces Bureau of Industry and Security and U.S. Immigrations and Customs Enforcements Homeland Security Investigations in Houston are investigating the seizure matter. Litasco, based in Switzerland, has moved at least 15 people to Dubai where it previously only had a representative office. 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. prominent Russian energy companies, such as Gazprom, Lukoil, and 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 . 2014). the State Department announced on August 8, 2018 that it would be largest producers of oil and gas in the world, and, because many 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). Our Standards: The Thomson Reuters Trust Principles. ", Russian companies and major buyers of Russian oil have been unable to open letters of credit from Western banks to cover purchases. Certain activities related to the Ukraine-/Russia-related Sanctionsmay be allowed if they are licensed by OFAC. (last visited Aug. 31, 2018). Additionally, it is notoriously difficult to determine the . on exports to the Russian oil industry. This comprehensive, bipartisan sanctions The Sanctions List Search tool uses approximate string matching to identify possible matches between word or character strings as entered into Sanctions List Search, and any name or name component as it appears on the SDN List and/or the various other sanctions lists. documents in the last year, 20 A price has yet to be decided. Directives 1 through 3 ("SDN") List; and 3) sectoral sanctions prohibiting the material on FederalRegister.gov is accurately displayed, consistent with significant sanctions must be imposed in the next three months if documents in the last year, by the Executive Office of the President 4024, https://www.federalregister.gov/d/2022-04337, MODS: Government Publishing Office metadata. U.S. persons are generally prohibited from engaging in transactions with them. bright line rules exist. Sanctioned companies can, depending on the details, be suspended from trading and removed from the LSEs stock market indices although there is little in the rules on what would happen if suspensions were to last years. They are useful quick reference tools.