Industry News

OFACs Authorizing the Closing of Accounts at Financial Institutions Blocked Pursuant to Executive Order 14024

Aug. 30, 2022
By: Marvin E. McPherson

One issue companies have had complying with the Russian sanctions in Executive Order 14024 has been winding down their operations in Russia in a legal and compliant manner. On August 19, 2022, the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued a new General License (“GL”) 50 intended to address some of these difficulties.

EO 14024 of April 15, 2021, blocked all transfers, payments, exports and withdrawals in all dealing with, specific sectors (including the financial services sector) of the Russian economy. GL 50 specifically excludes certain transactions from the scope of the EO, such as (1) the opening or maintaining of a correspondent account or payable-through account for or on behalf of any entity subject to Directive 2 under E.O. 14024; (2) payable-through account for or on behalf of any entity subject to Directive 2 under EO 14024 or (3) transactions prohibited by Directive 4 under EO14024.

GL 50 authorizes all transactions that are ordinarily incident and necessary to (1) the closing of a non-blocked/non-SDN individual’s account at a financial institution and (2) the unblocking and lump sum transfer of all remaining funds and other assets in the closed account to the non-blocked/non-SDN individual, including to the non-blocked/non-SDN individual’s other account at a non-blocked/non-SDN financial institution that may have been prohibited pursuant to Executive Order (EO) 14024.

If you have questions about winding down operations in Russia, or complying with and managing sanctions do not hesitate to contact any attorney at Barnes Richardson, & Colburn LLP.