For the purposes of the respective E.O. prohibitions, “new investment” generally excludes the maintenance of investments in the Russian Federation that were made prior to the effective dates of the respective E.O. prohibitions (“pre-existing projects or operations”). “Maintenance” of investments includes:
- Transactions to ensure continuity of pre-existing projects or operations located in the Russian Federation, including payments to employees, suppliers, landlords, lenders, and partners;
- The preservation and upkeep of pre-existing tangible property in the Russian Federation; and
- Activities associated with maintaining pre-existing capital investments or equity investments.
As a general matter, “maintenance” includes all transactions ordinarily incident to performing under an agreement in effect prior to the effective date of the respective E.O. prohibitions (“pre-existing agreement”), provided that such transactions are consistent with previously established practices and support pre-existing projects or operations. However, “maintenance” does not include the expansion of pre-existing projects or operations beyond those in effect prior to the effective dates of the respective E.O. prohibitions, even if pursuant to a pre-existing agreement, where such expansion occurs on or after the effective dates of the respective E.O. prohibitions. Nor does “maintenance” include commitments pursuant to the exercise of rights under a pre-existing agreement where such commitment is made on or after the effective dates of the respective E.O. prohibitions.
In connection with maintenance activity, U.S. persons also may modify or alter pre-existing agreements, or enter into new contracts or agreements, provided that any transaction under such contracts or agreements are consistent with previously established practices and support pre-existing projects or operations. For example, a pre-existing agreement may be modified, or new contract established, to substitute suppliers, conduct maintenance or repairs, or comply with new environmental or safety standards. In assessing whether activity is consistent with past practice, the Office of Foreign Assets Control (OFAC) will consider all relevant facts and circumstances, including the transaction history between contract parties prior to the effective date of the respective E.O.s.
Note that maintenance activities must not involve blocked persons or other prohibited transactions unless exempt or otherwise authorized by OFAC.