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976. Can a U.S. financial institution process transactions related to energy where a Russian financial institution sanctioned pursuant to Executive Order (E.O.) 14024 is involved?  

Answer

General License (GL) 8J authorizes certain transactions “related to energy” (as defined in the GL; see also FAQ 977) involving the following entities (collectively, “Covered Entities”):

  • State Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank (VEB);
  • Public Joint Stock Company Bank Financial Corporation Otkritie;
  • Sovcombank Open Joint Stock Company;
  • Public Joint Stock Company Sberbank of Russia;
  • VTB Bank Public Joint Stock Company; 
  • Joint Stock Company Alfa-Bank;
  • Public Joint Stock Company Rosbank;
  • Bank Zenit Public Joint Stock Company;
  • Bank Saint-Petersburg Public Joint Stock Company;
  • National Clearing Center (NCC);
  • Any entity owned 50 percent or more, directly or indirectly, individually or in the aggregate, by one of the above entities; and
  • The Central Bank of the Russian Federation.

GL 8J does not authorize any transaction prohibited by Directive 1A under E.O. 14024, “Prohibitions Related to Certain Sovereign Debt of the Russian Federation” (Russia-related Sovereign Debt Directive).  In addition, GL 8C does not authorize any debit to an account on the books of a U.S. financial institution of the Central Bank of the Russian Federation.  Further, GL 8J does not authorize a U.S. financial institution to maintain (or open) a correspondent account or payable-through account for or on behalf of foreign financial institutions subject to the prohibitions of Directive 2 under E.O. 14024, “Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions” (the “Russia-related CAPTA Directive”).  Consequently, in order for a U.S. financial institution to engage in transactions authorized by GL 8C, all funds transfers related to energy involving one or more Covered Entities must be processed indirectly through a non-sanctioned, non-U.S. financial institution.  Please see FAQ 978 for examples of authorized and prohibited transactions flows under certain GLs, including GL 8J.

For purposes of assessing whether certain transactions are authorized under GL 8J, U.S. persons may rely upon the information available to them in the ordinary course of business, including reasonable reliance on information about the underlying transaction provided by the parties thereto.

GL 8J is valid until 12:01 eastern daylight time, November 1, 2024 unless renewed.  Persons unable to wind down prohibited transactions with the Covered Entities by November 1, 2024 are encouraged to approach the Office of Foreign Assets Control, which may consider renewing GL 8J.  Please see FAQs 977, 978, 1010, 1111, and 1012 for additional guidance related to GL 8J.

GL 8J provides authorization solely under E.O. 14024.  Therefore, U.S. financial institutions that rely on the authorization provided in GL 8J to process transactions related to energy must also comply with the prohibitions of E.O. 14066, E.O. 14068, and E.O. 14071 (see FAQs 1013, 1014 and 1015).

Updated: June 12, 2024

Date Released
February 24, 2022