Written by our Global Sanctions Team

On February 28, 2022, the United States imposed sanctions prohibiting transactions involving the Central Bank of Russia and blocking the Russian Direct Investment Fund. Additionally, the United States has issued implementing regulations for EO 14024.

The United States sanctions the Central Bank of the Russian Federation

On February 28, 2022, the United States issued Directive 4 under EO 14024, which prohibits transactions involving the Central Bank of the Russian Federation, among others.1 As such, US persons are now prohibited from engaging in any transaction involving the Central Bank, including the transfer of assets or any foreign exchange transaction. In addition to the Central Bank of Russia, Directive 4 also prohibits transactions involving the National Wealth Fund of the Russian Federation and the Ministry of Finance of the Russian Federation. These three entities have been added to the Office of Foreign Assets Control of the United States Department of Treasury (“OFAC“) List of penalties based on a non-SDN menu (“NS-MBS“).2

Directive 4 extends the previous prohibitions contained in Directive 1A of February 22, 2022, which prohibits participation in the primary and secondary markets of ruble-denominated or other bonds, as of March 1, 2022. Directive 4 more broadly prohibits All Transactions (unless otherwise required by law, licensed or authorized by OFAC) involving any of these three entities. Like Guideline 1A, Guideline 4 does not extend to ownership or ownership interests in these entities, so OFAC’s 50% rule does not apply.3

The United States has also superseded and superseded General License 8 by issuing General License 8A, which adds the Central Bank of the Russian Federation to the list of entities subject to GL 8A authorization. GL 8A authorizes (with conditions) energy-related transactions involving listed sanctioned entities until 12:01 a.m. EDT on June 24, 2022.4

US designates Russian Direct Investment Fund to SDN list

The United States has also added the following entities to the SDN list:

  • Russian Direct Investment Fund (RDIF)
  • Joint stock company Russian Direct Investment Fund Management Company (MC RDIF)
  • RVC Management Company Limited Liability Company

Additionally, Kirill Aleksandrovich Dmitriev, CEO of RDIF and MC RDIF, was placed on the SDN list. Dmitriev and the three entities above are now fully blocked. All property and interests in property of SDN List Persons that are located in the United States or under the possession or control of a US Person, wherever located, are blocked and cannot be traded. Any entity in which one or more persons who have in aggregate, directly or indirectly, an interest of 50% or more is itself blocked. U.S. Persons may not engage in any transactions, direct or indirect, with Blocked Persons or with property in which Blocked Persons have an interest, absent an applicable license or exemption.

OFAC publishes implementing regulations for EO 14024

In addition to the actions taken today, OFAC also issued the implementing regulations for EO 14024, the “Russian Harmful Activities Sanctions Regulations,” at 31 CFR Part 587.5

1 See the full text of Directive 4 here.
2 The NS-MBS can be found here.
3 See FAQ 891.
4 See the full text of the Russia-related 8A General License here.
5 See the full text of the final rule here.

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