1197. I’m a U.S. person with securities held at the National Settlement Depository (NSD), which were transferred pursuant to Russian Decree 840 to another Russian registrar.  Am I required to block these securities? 

Yes.  On June 14, 2024, OFAC designated the National Settlement Depository (NSD), along with the Moscow Exchange (MOEX) and the National Clearing Center (NCC) pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy. As noted in the accompanying press release, Russia has reoriented the architecture of its financial system to facilitate investment into its defense industry and acquisition of goods needed to further its aggression against Ukraine. 

Alongside this designation, OFAC issued, and subsequently extended, two general licenses to allow for wind-down of certain transactions involving NSD, MOEX, and NCC, and the divestment of securities held at NSD, among other authorized activities. These general licenses (General License 99A and General License 100A) are in place through 12:01 a.m. eastern daylight time, October 12, 2024. Following the expiration of GLs 99A and 100A, any securities in the possession or control of U.S. persons that are held at NSD should be treated as blocked, and dividends or other income received via NSD should be treated as blocked.

OFAC is aware that the Russian Federation has attempted to take action to evade or avoid OFAC sanctions on NSD via Presidential Decree 840 by requiring the transfer of certain securities to local Russian registrars. OFAC cautions that such transfers may not be authorized under the general licenses and may be considered null and void pursuant to OFAC’s regulations (see 31 CFR § 587.202). OFAC understands that these transactions may involve other blocked persons, including certain local Russian registrars. OFAC is also investigating the remaining non-blocked local Russian registrars for future designation under E.O. 14024.  The general licenses do not authorize transactions involving any blocked person other than those identified in the authorizations, and any transfer made in violation of OFAC sanctions is null and void. As such, U.S. persons should continue to treat these securities as blocked.