On Monday, OFAC issued General License No. 14 under the Ukraine-Related Sanctions Regulations (URSR), authorizing the maintenance or winding down of business with United Company Rusal plc (Rusal) through October 23, 2018. The imposition of sanctions on Rusal, which OFAC listed as a Specially Designated National (SDN) on April 6, had roiled the global aluminum market and sparked fears of a worldwide supply shock. The Trump Administration appears to have taken these concerns on board in issuing the new general license, with Treasury Secretary Steven Mnuchin noting in a press release that the “the U.S. government is not targeting the hardworking people who depend on RUSAL and its subsidiaries”. OFAC also issued new Frequently Asked Questions (FAQs) providing interpretative guidance regarding the new general license.
As previously noted, OFAC designated Rusal as an SDN on April 6, cutting it off from all dealings with U.S. persons and subjecting non-U.S. persons to secondary sanctions to the extent they engage in “significant” transactions with the aluminum producer. These restrictions also apply to all entities owned 50 percent or greater by Rusal. To soften the blow of the designation, OFAC issued General License No. 12, authorizing the maintenance or winding down of business with Rusal through June 5. However, the general license did not authorize U.S. persons to export items to Rusal from the United States, and required any payments to Rusal to be made into a blocked account, restrictions that also carried significant implications for non-U.S. persons.
General License No. 14 provides significantly more extensive relief, authorizing the maintenance or winding down of business with Rusal and its subsidiaries through October 23, and removing the restrictions on exports and payments. Continue Reading