Frequently Asked Questions

627. What is the purpose of the Executive Order (E.O.) of September 20, 2018, “Authorizing the Implementation of Certain Sanctions Set Forth in the Countering America’s Adversaries Through Sanctions Act”?

627 … Title II of the Countering America’s Adversaries Through Sanctions Act, as amended ( CAATSA ), and the Ukraine Freedom Support Act of 2014, as amended ( UFSA ), provide for the imposition of certain sanctions with respect to the Russian Federation. The E.O. of September 20, 2018 provides… Read more

673. What is the purpose of Executive Order (E.O.) 13883, “Administration of Proliferation Sanctions and Amendment of Executive Order 12851”?

673 … E.O. 13883 delegates to the Secretary of the Treasury the implementation of the sanctions related to multilateral development bank assistance and to United States bank loans that are contained in the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991, as amended (“CBW… Read more

674. What action did the U.S. government take under the CBW Act on August 2, 2019?

674 … Following the chemical weapons attack in Salisbury, United Kingdom, the Department of State, acting under the CBW Act pursuant to authority delegated to the Secretary of State, made a determination on August 6, 2018 that the Government of the Russian Federation had used chemical weapons in… Read more

675. How does OFAC implement sanctions related to U.S. bank loans imposed on Russia pursuant to the CBW Act?

675 … Pursuant to Executive Order (E.O.). 13883 , 31 CFR § 544.802, and the CBW Act, on August 2, 2019, OFAC issued a Russia-Related Directive (the “CBW Act Directive”) , which prohibits U.S. banks from participating in the primary market for non-ruble denominated bonds issued by the Russian… Read more

676. What do the CBW Act Directive terms “U.S. bank” and “Russian sovereign” mean?

676 … The CBW Act Directive defines the term “U.S. banks.” This definition is consistent with section 4(c) of Executive Order (E.O.) 13883 , and with the definition of “U.S. financial institution” at 31 CFR § 544.311. The CBW Act Directive defines the term “Russian sovereign” as any ministry,… Read more

677. How does OFAC’s CBW Act Directive impose costs on the Government of the Russian Federation?

677 … The CBW Act Directive imposes long-term costs on Russia for its brazen use of chemical weapons and its failure to meet the conditions described in the CBW Act, including the failure to provide reliable assurances that Russia would not engage in future chemical weapons attacks. The Government… Read more

678. Does the CBW Act Directive prohibit participation in the secondary market for Russian sovereign debt?

678 … No, the CBW Act Directive does not prohibit U.S. banks from participating in the secondary market for Russian sovereign debt. However, independent of the CBW Act Directive, OFAC has imposed prohibitions on certain Russia-related sovereign entities subject to the CBW Act Directive, pursuant… Read more

651. What happened to the Petróleos de Venezuela, S.A. (PdVSA) bonds, or bonds issued by any entity directly or indirectly owned 50 percent or more by PdVSA, that were previously included in the Annex to General License 3?

651 … Bonds issued by PdVSA or any entity in which it owns, directly or indirectly, a 50 percent or greater interest that was previously listed in the Annex to General License 3 (this content is no longer available) (which has been superseded by General License 3B (this content is no longer… Read more

652. Is it permissible for mutual funds and exchange traded funds (collectively, “funds”) that are U.S. persons to buy, sell, or otherwise engage in transactions related to debt, equity, or other holdings in an entity that appears on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List), or of an entity owned 50 percent or more, individually or in the aggregate, by an individual or entity on the SDN List?

652 … No. A fund that is a U.S. person may not buy, sell, or otherwise engage in transactions related to debt, equity, or other holdings in blocked persons and must block such holdings, unless authorized by OFAC via general or specific license. A U.S. fund that contains such blocked holdings… Read more

653. I am the manager of a Synthetic Exchange Traded Fund (ETF), which tracks a basket of debt, equity or other holdings in order to provide a return approximating the returns on that basket, but which does not actually hold the underlying debt, equity, or other holdings contained in the basket. May I continue to offer such funds, and may U.S. persons trade in shares of these funds, if the underlying basket being tracked contains holdings in an entity or entities that appear on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List), or of an entity owned 50 percent or more, individually or in the aggregate, by an individual or entity on the SDN List?

653 … Yes, so long as the underlying basket being tracked includes less than a predominant share by value of debt, equity, or other holdings in blocked persons. U.S. and non-U.S. persons may continue to constitute, offer, and trade in funds that include only synthetic risk in debt, equity, or other… Read more

Frequently Asked Questions

Office of Terrorism and Financial Intelligence