Belarus Sanctions

Belarus GL 3 authorizes transactions and activities with the State Security Committee of the Republic of Belarus (the Belarusian KGB) that are necessary and ordinarily incident to requesting, receiving, utilizing, paying for, or dealing in certain licenses and authorizations for the importation, distribution, or use of certain information technology products in Belarus.  It also authorizes transactions and activities necessary and ordinarily incident to compliance with rules and regulations administered by, and certain actions or investigations involving, the Belarusian KGB.

The GL was issued to ensure that U.S. persons engaging in certain business activities in Belarus that are not otherwise prohibited are not unduly impacted.  Belarus GL 3 only authorizes certain transactions and activities with the Belarusian KGB acting in its administrative capacity and does not authorize U.S. persons to engage in transactions and activities with the Belarusian KGB except for the limited purposes described above.

No.  Belarus GL 3 does not authorize the exportation, reexportation, or provision of any goods, technology, or services to the Belarusian KGB or any other blocked person, except for the limited purposes of complying with rules and regulations administered by, and certain actions and investigations involving, the Belarusian KGB or requesting certain licenses or authorizations for the importation, distribution, or use of information technology products in Belarus.

E.O. of August 9, 2021 expands the scope of the national emergency pertaining to Belarus declared in E.O. 13405, “Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus,” to provide additional authorities under which sanctions may be imposed against individuals and entities related to the Belarusian regime’s harmful activities and longstanding abuses aimed at suppressing democracy and the exercise of human rights and fundamental freedoms in Belarus.  E.O. of August 9, 2021 also addresses national security threats posed by the Belarusian regime’s illicit and oppressive activities stemming from the August 9, 2020 fraudulent Belarusian presidential election and its aftermath, such as the elimination of political opposition and civil society organizations and the regime’s disruption and endangering of international civil air travel.

As a result of E.O. of August 9, 2021, all property and interests in property of persons designated pursuant to this E.O. that are or come within the United States or the possession or control of U.S. persons are blocked, and U.S. persons are generally prohibited from engaging in transactions involving such designated persons unless authorized by OFAC or otherwise exempt from regulation.  Additionally, any entities owned 50 percent or more, individually or in the aggregate, directly or indirectly, by one or more blocked persons are also blocked.

No.  E.O. of August 9, 2021 authorizes the imposition of blocking sanctions on persons operating in certain identified sectors of the Belarus economy, including the defense and related materiel sector, security sector, energy sector, potassium chloride (potash) sector, tobacco products sector, construction sector, transportation sector, or any other sector of the Belarus economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State.  The identification of a sector pursuant to E.O. of August 9, 2021 provides notice that persons operating in the identified sector risk exposure to sanctions; however, the identification of a sector does not automatically block all persons operating in that sector of the Belarus economy.  Only persons designated on OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List), and entities owned 50 percent or more, individually or in the aggregate, directly or indirectly, by one or more such persons, are subject to blocking sanctions.

GL 4 authorizes, through 12:01 a.m. eastern standard time, December 8, 2021, all transactions and activities prohibited by Executive Order (E.O.) 14038 that are ordinarily incident and necessary to the wind down of transactions involving Belaruskali OAO, or any entity in which Belaruskali OAO owns, directly or indirectly, a 50 percent or greater interest, subject to the terms of the license.  GL 4 does not authorize the entry into new purchase contracts, or the stockpiling of inventory, involving Belaruskali OAO, or any entity in which Belaruskali OAO owns, directly or indirectly, a 50 percent or greater interest, on or after August 9, 2021 that are not ordinarily incident and necessary to the wind down of transactions.  After the expiration of GL 4, unless exempt or authorized by OFAC, U.S. persons will be prohibited from engaging in transactions with Belaruskali OAO, or any entity in which Belaruskali OAO owns, directly or indirectly, a 50 percent or greater interest, and must block property or interests in property of such persons that are in, or come within, the United States, or the possession or control of a U.S. person. 

GL 5 authorizes, through 12:01a.m. eastern standard time, April 1, 2022, all transactions and activities prohibited by Executive Order (E.O.) 14038 that are ordinarily incident and necessary to the wind down of transactions involving Open Joint Stock Company Belarusian Potash Company (BPC) or Agrorozkvit LLC, or any entity in which BPC or Agrorozkvit LLC owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, including the wind down of such transactions in which Belaruskali OAO has a property interest (e.g., certain resale transactions by BPC or Agrorozkvit LLC of product sourced from Belaruskali OAO).  

However, GL 5 does not authorize direct transactions with Belaruskali OAO, and does not extend Belarus GL 4, which expires at 12:01 a.m. eastern standard time, December 8, 2021.  Please see FAQ 918 for further details on the scope of GL 4.  

GL 5 also does not authorize the entry into new purchase contracts, or the stockpiling of inventory, involving BPC or Agrorozkvit LLC, or any entity in which BPC or Agrorozkvit LLC owns, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest, that are not ordinarily incident and necessary to the wind down of transactions.  
 

Pursuant to Directive 1 under E .O. 14038, the following activities by U.S. persons or within the United States are prohibited, except to the extent provided by law or unless licensed or otherwise authorized by the Office of Foreign Assets Control:  all transactions in, provision of financing for, and other dealings in new debt with a maturity of greater than 90 days issued on or after December 2, 2021 by the Ministry of Finance of the Republic of Belarus or the Development Bank of the Republic of Belarus.  These prohibitions apply to all denominations of debt.

Further, except to the extent otherwise provided by law or unless licensed or otherwise authorized by the Office of Foreign Assets Control, the following are also prohibited:  (1) any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions contained in Directive 1 under E.O. 14038; and (2) any conspiracy formed to violate any of the prohibitions in Directive 1 under E.O. 14038.
 

Yes.

No, so long as the terms of such debt (including the repayment period, the interest rate, and the amount) were contractually agreed to before December 2, 2021 and are not modified on or after December 2, 2021.

No.  The prohibitions in Directive 1 do not apply to any entity that is owned, directly or indirectly, 50 percent or more by the Ministry of Finance of the Republic of Belarus or the Development Bank of the Republic of Belarus, whether individually or in the aggregate.

The term debt includes bonds, loans, extensions of credit, loan guarantees, letters of credit, drafts, bankers’ acceptances, discount notes or bills, or commercial paper.

No.  Directive 1 under E.O. 14038 prohibits U.S. persons from engaging in only certain activities with the Ministry of Finance of the Republic of Belarus or the Development Bank of the Republic of Belarus, as explained in FAQ 940. 

All other activities with the Ministry of Finance of the Republic of Belarus or the Development Bank of the Republic of Belarus, or involving their property or interests in property, are permitted, provided such activities are not otherwise prohibited pursuant to E.O. 14038, any Executive order issued pursuant to the national emergency declared in E.O. 13405, or any other sanctions program implemented by the Office of Foreign Assets Control.

Yes.  U.S. financial institutions may continue to maintain correspondent accounts and process U.S. dollar-clearing transactions for the Ministry of Finance of the Republic of Belarus or the Development Bank of the Republic of Belarus, provided such activity is not otherwise prohibited pursuant to E.O. 14038, any Executive order issued pursuant to the national emergency declared in E.O. 13405, or any other sanctions program implemented by the Office of Foreign Assets Control.

If a U.S. person entered into a revolving credit facility or long-term loan agreement prior to December 2, 2021, drawdowns and disbursements with repayment terms of 90 days or less are permitted.  In addition, drawdowns and disbursements whose repayment terms exceed 90 days are not prohibited if the terms of such drawdowns and disbursements (including the length of the repayment period, the interest rate applied to the drawdown, and the maximum drawdown amount) were contractually agreed to prior to December 2, 2021 and are not modified on or after December 2, 2021.  U.S. persons may not deal in a drawdown or disbursement initiated on or after December 2, 2021 with a repayment term that is greater than 90 days if the terms of the drawdown or disbursement were negotiated on or after December 2, 2021.  Such a newly negotiated drawdown or disbursement would constitute a prohibited extension of credit.

Yes.  Transactions by U.S. persons and within the United States involving derivative products whose value is linked to an underlying asset that constitutes prohibited debt issued by a person subject to Directive 1 under E.O. 14038 are prohibited, unless otherwise authorized by the Office of Foreign Assets Control.

In July 2017, the United Kingdom Financial Conduct Authority (FCA) announced the “future cessation and loss of representativeness” of the ICE Benchmark Administration’s 35 global reference rates, the LIBOR rates.  In light of the discontinuation of LIBOR as a benchmark reference rate, OFAC is issuing additional guidance.   

The Belarus, Russia, Ukraine-/Russia-related, and Venezuela-related sanctions programs prohibit U.S. persons from dealing in certain new debt of persons identified as subject to these prohibitions.  In FAQ 944 (Belarus), FAQ 986 (Russia-related), FAQ 371 (Ukraine-/Russia-related), and FAQ 511 (Venezuela-related), OFAC provides examples of new debt, such as “bonds, loans, extensions of credit, loan guarantees, letters of credit, drafts, bankers acceptances, discount notes or bills, or commercial paper” issued on or after various specified dates.  For more information on the effective dates and relevant debt maturities for each of these sanctions programs, please see FAQ 947 (Belarus), FAQ 984 (Russia-related), FAQ 370 (Ukraine-/Russia-related), and FAQ 553 (Venezuela-related).

For the Belarus, Russia, Ukraine-/Russia-related, and Venezuela-related sanctions programs, OFAC has indicated that certain changes to contractual terms of loans, contracts, or other agreements that were entered into prior to the effective date of the relevant sanctions prohibitions could convert pre-existing debt that was not subject to the sanctions prohibitions into new debt that is subject to the sanctions prohibitions.  (See FAQ 947 (Belarus), FAQs 987 and 989 (Russia-related) FAQ 394 (Ukraine-/Russia-related), and FAQ 553 (Venezuela-related).

Loans, contracts, or other agreements that use LIBOR as a reference rate that are modified to replace such benchmark reference rate will not be treated as new debt for OFAC sanctions purposes, so long as no other material terms of the loan, contract, or agreement are modified.

Date Updated: February 24, 2022