Sanctions Tracker – United States Announces Expiration of Certain Provisions of General License 9C – Export Controls and Trade and Investment Sanctions
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On May 24, 2022, the Office of Foreign Assets Control (“OFAC”) of the United States Department of the Treasury issued a Notice indicating that OFAC will not renew the terms of the General License (“GL”) 9C which expired at 12:01 a.m. on May 25, 2022. GL 9C generally authorized all transactions usually incidental and necessary to debt or equity transactions of certain Russian entities. However, note that permissions for some of these entities are not intended to expire before June 30, 2022 and July 1, 2022.
GL 9C also generally permits all transactions that were customarily incidental to and necessary for the receipt of interest, dividends, or payments when due in connection with debt or equity of the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation or the Ministry of Finance of the Russian Federation issued before March 1, 2022. This authorization also expired on May 25, 2022.
In effect, the expiration of these aspects of GL 9C means that the United States can block certain payments of principal and interest from Russian bonds to American investors. If Russia is unable to find another way to make payments, it could default on billions of dollars in principal and interest payments held by US investors.
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