US persons who have engaged in wind-down or maintenance transactions with EN+ Group, UC Rusal, or JSC EuroSibEnergo (or entities they own or control) pursuant to General License 14E or 16E must report those transactions to the Office of Foreign Assets Control (OFAC) by February 11, 2019, despite the lifting of sanctions on those entities.
OFAC designated EN+ Group, UC Rusal, and JSC EuroSibEnergo (the Entities) to its list of Specially Designated Nationals and Blocked Persons (the SDN List) on April 6, 2018, due to their ownership by Oleg Deripaska. The designations prohibited US persons from engaging in any transactions relating to the Entities or any companies in which they owned a 50% or greater interest.
On April 23, 2018, OFAC issued General License 14 authorizing US persons to engage in all transactions ordinarily incident and necessary to the maintenance or wind down of operations, contracts, or other agreements, with UC Rusal, or entities in which it owned a 50% or greater interest. OFAC issued General License 16 on June 4, 2018, authorizing US persons to engage in similar wind-down transactions with EN+ Group and JSC EuroSibEnergo, or entities in which they owned a 50% or greater interest.
Both General License 14 and General License 16 (the wind-down licenses) included a requirement that US persons submit a “comprehensive, detailed report” to OFAC within 10 business days of the expiration of the general licenses providing information regarding each transaction they engaged in with the Entities pursuant to those licenses.
The wind-down licenses had an initial expiration date of October 23, 2018, but were each replaced and superseded in their entirety by subsequent general licenses that extended the deadline. The latest general licenses, general licenses 14E and 16E, expired at 12:01 am on January 28, 2019.
Despite the removal of the Entities from the SDN List as of January 28, 2019, the requirement to submit the reports within 10 business days of the expiration date of the wind-down licenses remains. US persons, therefore, must submit the required reports to OFAC by February 11, 2019.
Although there is no required form for the reports, they must include key details regarding each transaction with the Entities under the wind-down licenses, including the names and addresses of parties involved, the type and scope of the activities conducted, and the dates on which the activities occurred. The reports can be mailed in hard copy or sent via email to OFAC.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
Washington, DC
Giovanna M. Cinelli
Kenneth J. Nunnenkamp
Katie Hilferty
Christian Kozlowski
Boston
Carl Valenstein