No, provided that the provision of services is not an indirect export to a person located in the Russian Federation. For the purposes of the IT and Software Services Determination, OFAC interprets the “indirect” provision of the prohibited services to include when the benefit of the services is ultimately received by a “person located in the Russian Federation.”
In contrast, OFAC would not consider to be prohibited the provision of services to a third country company that is located outside of Russia, including such a company owned or controlled by persons located in the Russian Federation, provided that the services will not be further exported or reexported to persons located in the Russian Federation.
For example, the following scenarios describe services that would be prohibited under the IT and Software Services Determination:
- A U.S. company designs and delivers proprietary supply chain management software to a third country limited liability company (Company X) on behalf of its Russian parent company, which Company X intends to supply to its parent company.
- A U.S. company designs and delivers proprietary accounting software to a third country software re-seller (Company Y), which Company Y indicates that they intend to supply to a Russian company.
- A U.S. consulting company signs a contract to provide enterprise management software and related information technology support services to Company X. Company X provides access to these services to its Russian parent, such that employees from the Russian parent call the U.S. consulting company when they have problems with their enterprise management software.
The following scenarios illustrate services to a non-Russian subsidiary of a Russian person that would not be prohibited under the IT and Software Services Determination:
- A U.S. software company assists a U.S. subsidiary of a Russian company in upgrading the U.S. subsidiary’s IT systems, including procuring new software and hardware. The U.S. subsidiary has an office and employees in the United States and conducts business in the United States, and the services will not be exported or reexported to the Russian parent company.
- A U.S. software company signs a contract with the third-country subsidiary (Company Z) of a Russian company for the delivery via cloud of building information software to Company Z. This subsidiary has an office and employees in the third country and conducts business in this third country, and the software will not be provided to the Russian parent company.
- A U.S. technology company designs a website for the subsidiary of a Russian company located in a third country. This subsidiary has an office and employees in the third country and conducts business in this third country, and the services will not be reexported to the Russian parent company.