On May 19, 2023, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued an amended Directive 4, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation.” The purpose of the amendment is to identify the assets of these Russian financial entities in order to fully map and immobilize holdings of Russia’s sovereign assets “until Russia pays for the damage it has caused to Ukraine.”
A prior version of Directive 4 issued on February 28, 2022 (see Update of February 28, 2022) is superseded in its entirety by this amended version. The amended version continues to prohibit transactions involving U.S. persons and the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation (collectively, “Directive 4 Entities”).
The amended Directive 4 includes a new “Reports” section requiring U.S. persons to report to OFAC any property in their possession or control in which any Directive 4 Entities have an interest. U.S. persons must submit a report to OFACreport@treasury.gov on or before June 18, 2023, and annually thereafter, regarding property in their possession or control with an interest, direct or indirect, of any Directive 4 Entity. OFAC also updated Frequently Asked Questions (FAQs) 998-1002, 1004-1005, and 1118 to reflect the amendment.
Separately, OFAC issued Russia-related General License 13E, “Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024” (effective until August 17, 2023). Such administrative transactions include paying taxes, fees or import duties and purchasing or receiving permits, licenses, registrations or certifications that are “ordinarily incident and necessary to the day-to-day operations in the Russian Federation” of any U.S. person. Note that General License 8G also allows for limited continued transactions “related to energy” with the Central Bank of the Russian Federation and certain other Russian financial institutions until November 1, 2023.