The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has added multiple new entities and persons to its Specially Designated Nationals (SDN) List after determining that they were involved in attempts to evade U.S. sanctions put in place as a result of Russia’s invasion of Ukraine. OFAC has designated Russian commercial bank PJSC Transkapitalbank (TKB) stating that it has offered services to several banks in Asia, including within China, and the Middle East, and suggested options to evade international sanctions. In particular, OFAC notes that TKB offers to process transactions via its Internet-based banking system as an alternative to relying upon SWIFT codes. OFAC has also sanctioned and designated a network of more than 40 individuals and entities led by U.S.-designated Russian oligarch Konstantin Malofeyev. On April 6, 2022, the U.S. Department of Justice charged Mr. Malofeyev with conspiracy to violate U.S. sanctions and violating U.S. sanctions Mr. Malofeyev.
OFAC also designated companies operating in Russia’s virtual currency mining industry, including BitriverAG and ten of its subsidiaries. Treasury stated that in “operating vast server farms that sell virtual currency mining capacity internationally, these companies help Russia monetize its natural resources. Russia has a comparative advantage in crypto mining due to energy resources and a cold climate. However, mining companies rely on imported computer equipment and fiat payments, which makes them vulnerable to sanctions.”
Additional identifying information on these sanctioned entities and individuals is available here. All property and interests in property of the individuals and entities above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50% or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt.
In addition to these actions, OFAC recently issued the following Russia-related General Licenses (GLs):
- GL 26 – Authorizing the Wind Down of Transactions Involving Joint Stock Company SB Sberbank Kazakhstan or Sberbank Europe AG. This GL authorizes transactions ordinarily incident and necessary to the wind down of transactions involving JSC SB Sberbank Kazakhstan or Sberbank Europe AG, or any entity in which these blocked Sberbank subsidiaries own, directly or indirectly, a 50 percent or greater interest, that are otherwise prohibited by Executive Order (E.O.) 14024 until July 12, 2022.
- GL 27 – Certain Transactions in Support of Nongovernmental Organizations’ Activities. This GL authorizes transactions related to certain activities of NGOs in Russia and Ukraine, including activities to support humanitarian projects to meet basic human needs, to support democracy building efforts and to support education.
- GL 28 – Authorizing Certain Transactions Involving PJSC Transkapitalbank and Afghanistan. This GL authorizes continued transactions involving PJSC Transkapitalbank (TKB), or any entity in which TKB owns, directly or indirectly, a 50 percent or greater interest, that are ultimately destined for or originating from Afghanistan and otherwise prohibited by E.O. 14024, until October 20, 2022.
- GL 29 – Authorizing the Wind Down of Transactions Involving Public Joint Stock Company Transkapitalbank. This GL authorizes all transactions ordinarily incident and necessary to the wind down of transactions involving PJSC Transkapitalbank (TKB), or any entity in which TKB owns, directly, or indirectly, a 50 percent or greater interest, that are otherwise prohibited by E.O. 14024, until May 20, 2022.