US Expands Sanctions to Include Russia's Central Bank and Direct Investment Fund

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Authored by our Global Sanctions, Export Controls and Customs Teams

On 28 February 2022, the US imposed sanctions prohibiting transactions involving Russia's Central Bank and blocking Russia's Direct Investment Fund. In addition, the US issued implementing regulations for EO 14024.


US Sanctions the Central Bank of the Russian Federation

On 28 February 2022, the US issued Directive 4 under E.O. 14024, which prohibits transactions involving the Central Bank of the Russian Federation, among others.1 As such, US persons are now prohibited from engaging in any transaction involving the Central Bank, including the transfer of any assets or any foreign exchange transaction. In addition to Russia's Central Bank, Directive 4 also prohibits transactions involving the National Wealth Fund of the Russian Federation and the Ministry of Finance of the Russian Federation. These three entities have been added to the US Department of the Treasury's Office of Foreign Assets Control's ("OFAC") Non-SDN Menu-Based Sanctions List ("NS-MBS").2

Directive 4 expands upon the prior prohibitions contained in Directive 1A of 22 February 2022, which prohibits participation in the primary and secondary markets for ruble or non-ruble denominated bonds, effective 1 March 2022. Directive 4 more broadly prohibits all transactions (unless otherwise provided by law, licensed, or authorized by OFAC) involving any of these three entities. Like Directive 1A, Directive 4 does not extend to the property or interests in property of these entities so OFAC's 50 Percent Rule does not apply.3

The US also replaced and superseded General License 8 by issuing General License 8A, which adds the Central Bank of the Russian Federation to the list of entities subject to GL 8A's authorization. GL 8A authorizes (with conditions) transactions related to energy involving listed sanctioned entities until 12:01 a.m. EDT 24 June 2022.4


US Designates the Russian Direct Investment Fund to the SDN List

The US also added the following entities to the SDN list:

  • Russian Direct Investment Fund (RDIF)
  • Joint Stock Company Management Company Of The Russian Direct Investment Fund (MC RDIF)
  • Limited Liability Company RVC Management Company

Additionally, Kirill Aleksandrovich Dmitriev, the CEO of RDIF and MC RDIF, was placed on the SDN List. Dmitriev and the three entities above are now fully blocked. All property and interests in property of persons on the SDN List that are located in the United States or within the possession or control of a US person, wherever located, are blocked and may not be dealt in. Any entity in which one or more blocked persons owns in the aggregate, directly or indirectly, a 50 percent or greater ownership interest is itself blocked. US persons may not engage in any dealings, directly or indirectly, with blocked persons or with any property in which blocked persons have any interest, absent an applicable license or exemption.


OFAC Issues Implementing Regulations for EO 14024

In addition to the actions taken today, OFAC also issued the implementing regulations for E.O. 14024, the "Russian Harmful Activities Sanctions Regulations," at 31 CFR Part 587.5


1 See full text of Directive 4 here.
2 The NS-MBS can be found here.
3 See FAQ 891.
4 See full text of Russia-related General License 8A here.
See full text of the final rule here.


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