ANNOUNCEMENT 28 Feb 2022

In February 2022, the U.S. Department of Treasury announced certain prohibitions related to the Russian financial sector.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

U.S. Department of Treasury, Office of Foreign Assets Control (OFAC), “DIRECTIVE 4 UNDER EXECUTIVE ORDER 14024, “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”. Available at: https://home.treasury.gov/system/files/126/eo14024_directive_4_02282022.pdf

U.S. Department of Treasury, Press Release, “Treasury Prohibits Transactions with Central Bank of Russia and Imposes Sanctions on Key Sources of Russia’s Wealth”. Available at: https://home.treasury.gov/news/press-releases/jy0612

Inception date: 28 Feb 2022 | Removal date: open ended

Controls on credit operations

On 28 February 2022, the U.S. Department of Treasury, Office of Foreign Assets Control (OFAC) issued Directive 4 under Executive Order 14024 introducing certain prohibitions related to transactions involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation.

Specifically, OFAC prohibited any transaction involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation, including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities.

According to the U.S. Treasury, this action “effectively immobilizes any assets of the Central Bank of the Russian Federation held in the United States or by U.S. persons, wherever located.”

By prohibiting all transactions involving the above-mentioned Russian institutions, Directive 4 expands the scope of prior prohibitions (Directive 1A) that prohibited participation in the primary and secondary markets for ruble or non-ruble denominated bonds (see related state acts).

AFFECTED SECTORS

 
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AFFECTED PRODUCTS

 
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Inception date: 28 Feb 2022 | Removal date: open ended

Controls on commercial transactions and investment instruments

On 28 February 2022, the U.S. Department of Treasury, Office of Foreign Assets Control (OFAC) added three Russian entities, namely Russian Direct Investment Fund (RDIF), Joint Stock Company Management Company Of The Russian Direct Investment Fund (MC RDIF), and Limited Liability Company RVC Management Company, to the Treasury’s sanction list (SDN list). Specifically, the assets of these entities are blocked and U.S. persons are prohibited from any transactions with them.

OFAC made these designations pursuant to E.O. 14024 for being owned or controlled by Russia and for operating in the financial services sector of the Russian Federation economy.

 
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