On April 27, 2018, the U.S. Department of Treasury, Office of Foreign Assets Control (“OFAC”) issued a general license extending sanctions relief that authorizes U.S. persons to engage in certain transactions with nine Belarus-based entities that have been designated as Specially Designated Nationals (“SDNs”), as well as entities that they own 50% or more. The general license (No. 2E) is the fifth in a series of identical licenses authorizing such transactions for a renewable period of six months. The first general license was issued on October 30, 2015, following President Lukashenko’s decision to welcome election monitors and free certain political prisoners (see our advisory here).
The nine entities include:
- Belarusian Oil Trade House
- Belneftekhim USA, Inc.
- Belshina OAO
- Grodno Azot OAO
- Grodno Khimvolokno OAO
- Lakokraska OAO
- Naftan OAO
- Polotsk Steklovolokno OAO
The general license permits all transactions involving these entities otherwise prohibited by Executive Order 13405 (the authority under which the entities were designated), including (i) the provision of funds, goods, or services to the entities, (ii) the receipt of funds, goods or services from the entities, and (iii) dealings in securities that are registered in the name of, held for the benefit of, or issued by the entities. Transactions ordinarily incident to a licensed transaction are also authorized. Notably, property of the nine entities blocked prior to October 30, 2015 remains blocked under the general license.
As with the earlier versions of this license, U.S. persons engaging in a transaction, or series of transactions, authorized by the general license and exceeding $50,000 must submit a report to the U.S. Department of State, Office of Eastern European Affairs. The report must include information regarding the dollar value of the transaction(s), the parties involved, the type and scope of activities conducted, and the dates or duration of the activities.
The general license will expire on October 30, 2018, unless revoked or extended. This means that all aspects of a transaction, including payment, must be concluded by that date.
Continued sanctions relief appears likely as the U.S. and Russia compete for influence in Belarus. However, some observers have raised concerns over political repression in the country.