Washington, D.C. (July 21, 2023) – On June 28, 2023, the United States Department of the Treasury's Office of Foreign Assets Control (OFAC) and His Majesty's Treasury's Office of Financial Sanctions Implementation (OFSI) jointly issued a Humanitarian Assistance and Food Security Fact Sheet (Fact Sheet), which clarifies certain exceptions to the broad sanctions in place against Russia to allow for continued humanitarian assistance.
Companies and individuals in the U.S. should take note of the information in the Fact Sheet because although the U.S. has levied broad sanctions against the Russian Federation and named entities, there is not a total ban on all business activities.
Fact Sheet Highlights
First, OFAC has issued multiple general licenses that apply to situations where assistance carried out by non-governmental organizations (NGO) or international organizations (IO) may otherwise be prohibited under the Russia-related sanctions. For example, Section 587.510 of the Russian Harmful Foreign Activities Sanctions Regulations (RuHSR) has an exception list in which transactions from the following are authorized: United Nations, International Centre for Settlement of Investment Disputes, Multilateral Investment Guarantee Agency, African Development Bank Group, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank Group, International Committee of the Red Cross, and International Federation of Red Cross and Red Crescent Societies. OFSI also has issued a general license that applies to various regions of Ukraine.
Second, the Fact Sheet stresses that the U.S. has not imposed sanctions on the exportation of agricultural commodities, medicine, or medical devices to, from, or related to Russia. OFAC General License 6C authorizes certain transactions related to agricultural commodities and equipment, medicine, and medical devices, as well as transactions related to the prevention, diagnosis, or treatment of COVID-19 (including research and clinical studies), or clinical trials and other medical research activities.
Third, due to the breadth of General License 6C, U.S. financial institutions are allowed to process transactions that are authorized under this license. Additionally, foreign financial institutions are permitted to engage in or facilitate transactions that would fall within the scope of authorization provided by General License 6C.
Fourth, the Fact Sheet addresses whether U.S. and UK financial institutions can process transactions involving the Russian Agricultural Bank pertaining to the exportation of agricultural commodities to, from, transiting, or related to Russia. The Russian Agricultural Bank does not appear on OFAC's Specially Designated Nationals and Blocked Persons (SDN) List or any other U.S. sanctions authority. Nevertheless, individuals engaging in transactions with the Russian Agricultural Bank are subject to specific limitations concerning dealings/financing in debt and equity, as set forth in OFAC's Directive 1 and Directive 3. However, as noted above, General License 6C provides authorization for certain transactions involving agricultural commodities and equipment, medicine, and medical devices, which allows for a correspondingly broader scope of transactions for the Russian Agricultural Bank.
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