Frequently Asked Questions

1059. Does the determination made pursuant to Executive Order (E.O.) 14071 on May 8, 2022, “Prohibitions Related to Certain Accounting, Trust and Corporate Formation, and Management Consulting Services” (“the determination”), prohibit U.S. persons from providing services to persons located outside of the Russian Federation that are owned or controlled by persons located in the Russian Federation?

Answer

No, provided that the provision of services is not an indirect export to a person located in the Russian Federation.  For the purposes of this determination, OFAC interprets the “indirect” provision of the prohibited services to include when the benefit of the services is ultimately received by a “person located in the Russian Federation.”

In contrast, OFAC would not consider to be prohibited the provision of services to a non-Russian company that has a physical presence and operations outside of the Russian Federation, including such a company owned or controlled by persons located in the Russian Federation, provided that the services will not be further exported or reexported to persons located in the Russian Federation.

For example, the following scenarios describe services that would be prohibited under the determination:

  • A U.S. corporate service provider administers a trust established under the laws of a U.S. state, where the trust exists predominantly to hold, sell, or purchase assets on behalf of a settlor, trustor, or beneficiary who is an individual ordinarily resident in Russia. 
  • A U.S. corporate service provider registers a limited liability company in a third country on behalf of an individual ordinarily resident in Russia for the purpose of holding real estate assets, and this company has no other physical presence or operations in the third country. 

The following scenarios illustrate services to a non-Russian subsidiary of a Russian person that would not be prohibited under the determination:

  • A U.S. accounting firm provides tax advisory and preparation services to the U.S. subsidiary of a Russian company.  This U.S. subsidiary has an office and employees in the United States and conducts business in the United States, and the services will not be exported or reexported to the Russian parent company.
  • A U.S. management consulting firm provides strategic business advice to the subsidiary of a Russian company located in a third country.  This subsidiary has an office and employees in the third country and conducts business in this third country, and the services will not be reexported to the Russian parent company. 
     
Date Released
June 9, 2022