No.  The processing, clearing, or sending of payments related to Russian metals by a U.S. bank on behalf of non-U.S. persons is not prohibited by the Metals Services Determination where the bank:  (1) is operating solely as an intermediary; and (2) does not have any direct relationship with the person providing a service covered by the Metals Services Determination (i.e., the person is a non-account party) as it relates to the relevant transaction.  Thus, the Metals Services Determination does not impose any new prohibitions or requirements relating to the processing, clearing, or sending of payments by intermediary banks.

Note that the above does not authorize U.S. banks to themselves provide any of the services prohibited by the Metals Services Determination indirectly or directly to a person located in the Russian Federation with respect to aluminum, copper, or nickel of Russian Federation origin.

No.  FAQ 1019 clarifies that, for purposes of E.O. 14068, as amended by E.O. 14114, and the Metals Services Determination, the term “Russian Federation origin” excludes “any Russian Federation origin good that has been incorporated or substantially transformed into a foreign-made product.”

For the purposes of the Metals Import Determination and the Metals Services Determination, OFAC anticipates publishing regulations defining “aluminum,” “nickel,” and “copper” to include articles or products defined at the following Harmonized Tariff Schedule of the United States (HTSUS) chapter headings: 

• “Aluminum”: defined at HTSUS Chapter 76. 
• “Nickel”: defined at HTSUS Chapter 75. 
• “Copper”: defined at HTSUS Chapter 74. 
   

The Metals Services Determination prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of the following categories of services to any person located in the Russian Federation:  warranting services for aluminum, copper, or nickel of Russian Federation origin on a global metal exchange; and services to acquire aluminum, copper, or nickel of Russian Federation origin as part of the physical settlement of a derivative contract (collectively, “Covered Metals Acquisition Services”).  This determination does not apply to services related to aluminum, copper, or nickel of Russian Federation origin that was produced prior to April 13, 2024.

To ensure compliance with the Metals Services Determination, U.S. global metal exchanges should not accept aluminum, copper, or nickel of Russian Federation origin produced on or after April 13, 2024 (“covered Russian metals”).  U.S. global metal exchanges can further comply with the Metal Services Determination by halting the warranting of covered Russian metals on the exchange; removing brands that produce covered Russian metals from their list of accepted brands; abstaining from adding additional brands of covered Russian metals to their list of accepted brands; ceasing providing clearing services for covered Russian metals; and halting acting as a central counterparty to the trade of covered Russian metals. 

U.S. persons are also prohibited from providing services to acquire covered Russian metals as part of a physically settled derivative contract (i.e., the expiration of the contract results in a transfer of ownership of the physical commodity, as opposed to a cash settled derivatives contract in which the derivative expires directly into cash on the maturity date of the trade).  In addition, a U.S. trader that is a counterparty to a derivative contract cannot take physical delivery of covered Russian metals when it comes time to settle that contract, even if the importation of the metal would not be into the United States. 

As noted above, the Metals Services Determination does not impose any prohibitions on services related to aluminum, copper, or nickel of Russian Federation origin that was produced prior to April 13, 2024.  For example, aluminum, copper, and nickel of Russian Federation origin that is already warranted as of April 13, 2024 on a global metal exchange can continue to be traded, and new warranting and trading can continue for aluminum, copper, and nickel of Russian Federation origin that was produced prior to April 13, 2024, including through new derivatives contracts.  Market participants and traders may reasonably rely on the Certificate of Analysis and Certificate of Origin of the relevant Russian metal, or other documentation available to them in the ordinary course of business, with respect to the date of production, but should exercise caution if they have reason to believe such documentation has been falsified or is otherwise erroneous.  

On December 6, 2023, and February 24, 2024, the G7 Leaders issued statements signaling their intent to reduce Russia’s revenues from metals.  On April 12, 2024, in coordination with the United Kingdom, the United States issued two new prohibitions that will further disrupt the revenue that Russia earns from its export of aluminum, copper, and nickel of Russian Federation origin, including through the use of U.S. global metal exchanges.

To implement this action, Treasury issued two determinations.  The first, “Prohibitions Related to Imports of Aluminum, Copper, and Nickel of Russian Federation Origin” (the “Metals Import Determination”) pursuant to Executive Order (E.O.) 14068, as amended by E.O. 14114, prohibits the importation and entry into the United States, including importation for admission into a foreign trade zone located in the United States, of aluminum, copper, and nickel of Russian Federation origin.  Per the determination, the importation into the United States of aluminum, copper, and nickel of Russian Federation origin that was produced prior to April 13, 2024 is not prohibited.  See FAQ 1019 and 1170 for more information.

The second, “Prohibitions on Certain Services for the Acquisition of Aluminum, Copper, or Nickel of Russian Federation Origin” (the “Metals Services Determination”) pursuant to E.O. 14071, prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of the following categories of services to any person located in the Russian Federation:  warranting services for aluminum, copper, or nickel of Russian Federation origin on a global metal exchange; and services to acquire aluminum, copper, or nickel of Russian Federation origin, as part of the physical settlement of a derivative contract (collectively, “Covered Metals Acquisition Services”).  This determination does not apply to services related to aluminum, copper, or nickel of Russian Federation origin that was produced prior to April 13, 2024.  See FAQs 1169, 1170, 1128, 1019, and FAQ 1058 for more information.