On 6 October 2014, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) published Ukraine-Related General License 3 pursuant to Executive Order (“E.O.”) 13662, authorising all transactions with financial institutions named in the licence that would otherwise be prohibited by US sectoral sanctions against Russia. So far, only the Turkish bank DenizBank A.Ş., which is majority owned by Russia’s Sberbank, has been named in the licence.

Under OFAC’s “50% Rule”, a company that is 50% or more owned by one or more sanctioned parties is itself subject to sanctions, even though it does not itself appear on any sanctions list. Because Sberbank is listed in Directive 1 of the Sectoral Sanctions Identifications (“SSI”) List, DenizBank also was subject to Directive 1, which prohibits US persons from engaging in transactions involving new debt of over 30 days’ maturity or new equity of the sanctioned entities. As a result of the new general license, US persons are permitted to trade in new debt or equity of DenizBank. However, trade in new debt or equity of Sberbank itself and other entities of which Sberbank owns 50% or more remains restricted.

Ukraine-Related General License No. 3