Frequently Asked Questions

410. Are U.S. persons prohibited from entering into new contracts after the sanctions effective date with persons subject to Directives 1, 2, or 3 that provide payment terms to the SSI entities of greater than the applicable tenor specified in the relevant Directive? For instance, if a U.S. person agrees to sell shares or assets to an SSI entity in a corporate transaction that becomes effective on or after the sanctions effective date, is the U.S. person prohibited from agreeing to deferred purchase payments, even if no interest is involved, that may be paid more than the permissible number of days later by the SSI entity?

410 … Directives 1, 2, and 3 prohibit new extensions of credit to SSI entities of greater than the applicable tenor specified in the relevant Directive, and these prohibitions include deferred purchase agreements extending payment terms of longer than the applicable tenor specified in the relevant… Read more

411. What does the prohibition contained in Directive 3 under Executive Order 13662 mean? What is the scope of prohibited services?

411 … OFAC issued Directive 3 , introducing new prohibitions on all transactions in, provision of financing for, and other dealings in new debt of longer than 30 days maturity of persons determined to be subject to the Directive, their property, or their interests in property. Transactions by U.S.… Read more

412. What do the prohibitions contained in Directive 4 mean? What is the scope of prohibited services?

412 … Directive 4, as amended on October 31, 2017 in accordance with CAATSA , imposes two prohibitions on the provision, exportation, or reexportation of goods, services (except for financial services), or technology for certain activities involving persons subject to Directive 4, their property,… Read more

413. For the purposes of Directive 4, how does OFAC define "deepwater" projects that have the potential to produce oil?

413 … A project is considered to be a deepwater project if the project involves underwater activities at depths of more than 500 feet. … For the purposes of Directive 4, how does OFAC define "deepwater" projects that have the potential to produce …

414. Does Directive 4 apply to projects that have the potential to produce gas?

414 … If a deepwater, Arctic offshore, or shale project has the potential to produce oil, and the other requirements for either of the Directive 4 prohibitions are fully satisfied, then the relevant Directive 4 prohibition applies, irrespective of whether the project also has the potential to… Read more

415. For persons determined to be subject to multiple Directives, how do the prohibitions and exemptions listed under one Directive affect prohibitions and exemptions under the other Directives?

415 … Each Directive operates independently of the others. If a transaction involves a person subject to two Directives, for example, a U.S. person engaging in that transaction must comply with the requirements of both Directives. Exemptions in one Directive apply only to the prohibitions contained… Read more

416. What does the "sanctions effective date" mean in the context of sectoral sanctions pursuant to E.O. 13662?

416 … For purposes of the sectoral sanctions, "sanctions effective date" means the date a person is determined to be subject to the prohibition(s) of the relevant Directive . When a person has been previously determined to be subject to a Directive and the prohibitions in the Directive are… Read more

418. How does OFAC interpret the term "shale projects" with respect to the prohibitions in Directive 4, now incorporated into § 589.205 of the Ukraine-/Russia-Related Sanctions Regulations (URSR)?

418 … The term "shale projects," as defined in § 589.334 of the URSR, includes projects that have the potential to produce oil from resources located in shale formations as well as projects that have the potential to produce oil from resources located in fine-grained sedimentary rock formations… Read more

419. How should U.S. persons account for the debt prohibitions under Directives 1, 2, and 3 as they relate to payment terms for the following types of transactions: (1) the sale of goods to an SSI entity, (2) the provision of services to and subscription arrangements involving SSI entities, and (3) progress payments for long-term projects?

419 … U.S. persons may engage in commercial transactions with SSI entities provided that any such transactions do not represent a direct or indirect dealing in prohibited debt or equity. Because offering payment terms of longer than the applicable tenor specified in the relevant Directive to an SSI… Read more

420. Under Directive 4, does the term "production" encompass activities such as transportation, refining, or other dealings in oil extracted from deepwater, Arctic offshore, or shale projects?

420 … For the purposes of Directive 4 , the term "production" refers to the lifting of oil to the surface and the gathering, treating, field processing, and field storage of such oil. The production stage of a project ends when extracted oil is transported out of a field production storage tank or… Read more

Frequently Asked Questions

Office of Terrorism and Financial Intelligence