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Compliance Flash: OFAC Announces New Reporting Requirement for Persons Who Hold Property of Certain Russian Entities

Sanctions, Litigation
May 25, 2023

On May 19, 2023 the United States, in coordination with the G7 and other international partners, imposed more than three-hundred new sanctions on Russia for its war in Ukraine.  Press releases providing additional information regarding the new sanctions are available from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), and from the U.S. Department of State.

Notably, OFAC introduced a new reporting requirement for U.S. persons under its Russian Harmful Foreign Activities Sanctions program.  In February 2022, OFAC published Directive 4 under Executive Order 14024, which prohibited U.S. persons from engaging in any transaction involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation, including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities.  Now, amended Directive 4 includes a reporting requirement that mandates U.S. persons to report to OFAC any property in their possession or control in which these entities have any interest of any nature whatsoever, direct or indirect. 

As specified in the directive, United States persons are required to submit a report to OFAC with information concerning the target property on or before June 18, 2023, and annually thereafter by June 30. 

We will continue to closely monitor developments in this space. 

If you have any questions regarding the matters covered in this e-mail, please contact Bruce Paulsen (212) 574-1533, Brian Maloney (212) 574-1448, or your primary Seward & Kissel attorney.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm or its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.


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