OFAC Issues New Russia-Related SDN Designations and Alert for Financial Institutions
This blog post was drafted with assistance from Sean C. Church, Paralegal.
On November 21, 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) updated the Specially Designated Nationals and Blocked Persons List (SDN List) and issued an alert regarding the sanctions risks to foreign financial institutions. These actions further decrease the number of unsanctioned financial institutions in Russia and create heightened risks for future financial transactions involving Russian parties. Several notable designations of entities are:
- Gazprombank Joint Stock Company
- Over 50 small-to-medium Russian Banks
- Multiple Russian securities entities
- 11 Central Bank of the Russian Federation officials
- Key Russian staff members of VTB Bank Public Joint Stock Company’s branch in Shanghai, China and Public Joint Stock Company Sberbank of Russia’s branch in New Delhi, India
A full press release with the names of the newly designated parties can be found here.
OFAC also provided an alert regarding the sanctions risk for foreign financial institutions participating in the Russian financial messaging system called “System for Transfer of Financial Messages” (SPFS). The alert warns that SPFS was created to help diminish the effects of sanctions imposed following the invasion of Crimea, and any foreign financial institution that joins or has already joined SPFS may be as an SDN. As part of this alert, OFAC has made clear that institutions that join SPFS after the issuance of this alert will be subject to aggressive targeting. Foreign financial institutions should also be cautious of their exposure to other institutions participating in SPFS, which could be helping Russia evade U.S. sanctions.
Additionally, OFAC issued general licenses on various types of transactions and services, including a winddown general license for transactions with Gazprombank. OFAC also published two new Russia-related Frequently Asked Questions (FAQ 1201, FAQ 1202), and amended three Russia-related Frequently Asked Questions (FAQ 976, FAQ 1096, FAQ 1197). These refer to topics such as the effects on diplomatic and consular missions; processing of personal, non-commercial remittances; blocking securities held at the National Settlement Depository; and more.
Please contact our sanctions, export controls, and CFIUS team if you need assistance navigating these latest developments.