US Issues New Sanctions on Russian Financial Sector

The Office of Foreign Assets Control designated 18 entities related to Russia's financial services sector, according to a Dec. 15 press release. The State Department also issued a set of Russia sanctions, primarily targeting oligarch Vladimir Potanin, three members of his immediate family and his business network, the department said in a Dec. 15 press release.

OFAC's sanctions targeted Russian banks and their subsidiaries, including Rosbank, which was acquired this year by Potanin and is considered by Russia to be a "systemically important credit institution." The U.K. and Canada designated Rosbank earlier this year (see 2206290015). “By sanctioning additional major Russian banks, we continue to deepen Russia’s isolation from global markets,” said Brian Nelson, Treasury undersecretary for terrorism and financial intelligence.

The State Department targeted Potanin's company Interros, which has business interests "across nearly all sectors of Russia’s economy," including the financial sector.

OFAC also published new and updated general licenses and frequently asked questions.

General License 8E updates and replaces GL 8D and authorizes all otherwise prohibited transactions related to energy with Vnesheconombank, Otkritie, Sovcombank, Sberbank, VTB Bank, Alfa-Bank, Rosbank, or the Russian central bank through 12:01 a.m. EST May 16.

General License 58 authorizes wind down transactions involving Rosbank or entities it owns by 50% or more through 12:01 a.m. EST March 15, 2023.

General License 59 authorizes transactions required to divest or transfer debt or equity of Rosbank or one of its subsidiaries to a non-U.S. person through 12:01 a.m. EST March 15, 2023.

FAQ 1103 explains that wind down transactions with Rosbank include those "necessary to exit operations, contracts, or other agreements involving Rosbank entities that were in effect prior to" Dec. 15, "provided that such transactions do not involve a debit to a blocked account on the books of a U.S. financial institution." Wind-down activities don't include the continued processing of funds transfers, securities trades or other transactions that involve ongoing business activities prior to the imposition of sanctions.

FAQ 1104 clarifies that Norilsk Nickel is not a blocked entity despite possible linkages to Potanin.