OFAC extends sanctions against Belarus with additional designations and publication of Guideline 1 – International Law

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Worldwide: OFAC extends sanctions against Belarus with additional designations and publication of Directive 1

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On December 2, 2021, the Office of Foreign Assets Control (OFAC) of the Department of the Treasury announcement the extension of sanctions against Belarus in response to the Lukashenka regime’s “continued disregard for international standards”. The measures taken by OFAC in accordance with Decrees 14038 and 13405 include 35 new designations on the list of specially designated nationals and blocked entities (SDN) and the issuance of a related liquidation license, General License 5 (GL 5), for activities related to two new SDNs, Open Joint Stock Company Belarusian Potash Company (BPC) and BPC subsidiary Agrorozkvit LLC (Agrorozkvit). OFAC also issued Directive 1 the imposition of restrictions on new debts issued by the Ministry of Finance and the Development Bank of the Republic of Belarus. OFAC has published frequently asked questions (FAQ) 939, 940, 941, 942, 943, 944, 945, 946, 947 and 948 on the scope of GL 5 and Directive 1. These actions were carried out in coordination with the European Union, the United Kingdom and Canada.

The designations target officials and entities playing a key role in the disruption of EU border security, the shipment of ammunition and weapons to foreign conflict zones and the development of military radio electronics, d ‘optics and chassis for missile systems and potash exports. These designations include, among others, the state tourism company Republican Unitary Enterprise Tsentrkurort; state-controlled freight carrier JSC Transaviaexport Airlines and its two aircraft, EW-78843 and EW-78779; and the potash exporters BPC and Agrorozkvit.

OFAC issued GL 5 to provide US persons with 120 days to liquidate transactions involving BPC or Agrorozkvit, or any entity in which BPC or Agrorozkvit has a 50% or more interest, including the liquidation of those transactions. in which Belaruskali OAO has a proprietary interest. GL 5 expires on April 1, 2022. According to FAQ 939, GL 5 does not allow direct transactions with Belaruskali OAO and does not extend Belarus GL 4, which expires on December 8, 2021.

Guideline 1, issued in accordance with EO 14038, prohibits transactions, provision of funding, or other transactions by U.S. persons on new debt with a maturity greater than 90 days issued on or after December 2, 2021 by the Ministry of Finance of the Republic of Belarus or the Development Bank of the Republic of Belarus. FAQ 948 provides that Directive 1 prohibits US persons from entering into derivative contracts relating to underlying assets that constitute prohibited debt hereunder. In accordance with FAQ 943, the prohibitions in Directive 1 do not apply to any entity 50% or more owned by the Ministry of Finance or the Development Bank. Further guidance on the scope of the directive can be found in FAQs 940-947.

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