Frequently Asked Questions

1053. Under the new investment prohibitions of Russia-related Executive Order (E.O.) 14066, E.O. 14068, or E.O. 14071 (collectively, “the respective E.O.s”), are transactions related to divestment permissible?

Answer

Yes.  Transactions related to the divestment or the facilitation of divestment of a pre-existing investment, including a pre-existing investment in an entity, project, or operation in the Russian Federation, are not prohibited by the new investment prohibitions of the respective E.O.s.  Such transactions may not involve a blocked person or otherwise prohibited transactions unless exempt or authorized by the Office of Foreign Assets Control (OFAC).

The respective E.O.s prohibit any approval, financing, facilitation, or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited if performed by a United States person or within the United States.  Such provisions do not prohibit U.S. persons from facilitating the wind down or divestment of an existing investment in the Russian Federation, provided that such facilitation is on behalf of the selling party only.  For example, a U.S. financial institution is not prohibited from advising a client that seeks to sell an equity interest in an entity located in the Russian Federation (i.e., the seller in a divestment transaction).  However, a U.S. person is prohibited from providing any approval, financing, facilitation, or guarantee to a non-U.S. person that seeks to acquire an equity interest in an entity located in the Russian Federation (i.e., the buyer in such a transaction).

Such provisions also do not prohibit U.S. persons from advising on the requirements of U.S. sanctions laws consistent with OFAC’s Guidance on the Provision of Certain Services Relating to the Requirements of U.S. Sanctions Laws.
 

Date Released
June 6, 2022