Frequently Asked Questions

984. What does Directive 3 under Executive Order (E.O.) 14024, “Prohibitions Related to New Debt and Equity of Certain Russia-related Entities” (Russia-related Entities Directive) prohibit?

Answer

The Russia-related Entities Directive prohibits certain dealings by U.S. persons or within the United States in new debt of longer than 14 days maturity or new equity of Russian entities determined to be subject to the prohibitions of the directive or their property or interests in property.  The prohibitions of the Russia-related Entities Directive are effective beginning on 12:01 a.m. eastern daylight time, March 26, 2022 for entities listed in Annex 1 to the Russia-related Entities Directive, or their property or interests in property.  For entities subsequently determined to be subject to the prohibitions of the Russia-related Entities Directive, the prohibitions are effective 12:01 a.m. eastern time 30 days following such determination.

Specifically, the Russia-related Entities Directive prohibits the following activities by U.S. persons or within the United States:  all transactions in, provision of financing for, and other dealings in new debt with a maturity of greater than 14 days or new equity of entities listed in Annex 1 to the Russia-related Entities Directive or otherwise determined to be subject to the prohibitions of the Russia-related Entities Directive, or their property or interests in property, where such debt or equity is issued on or after the relevant sanctions effective date.  Please see FAQ 985 regarding the applicability of OFAC’s 50 Percent Rule with respect to this directive.

 

Entity Type

Relevant Sanctions Effective Date

Entities listed in Annex 1 to the Russia-related Entities Directive, or their property or interests in property

On or after 12:01 a.m. eastern daylight time on March 26, 2022

Entities otherwise determined to be subject to the prohibitions of the Russia-related Entities Directive, or their property or interests in property

On or after 12:01 a.m. eastern time on the date that is 30 days after the date of such determination

 

These prohibitions apply to all new debt with a maturity of greater than 14 days and new equity irrespective of currency denomination.

In addition, the Russia-related Entities Directive prohibits:  (1) any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions of the Russia-related Entities Directive; and (2) any conspiracy formed to violate any of the prohibitions of the Russia-related Entities Directive. 

Some entities determined to be subject to the prohibitions of the Russia-related Entities Directive may also be subject to prohibitions in other sanctions authorities, such as prohibitions of other directives issued under E.O. 14024, or directives issued under E.O. 13662.  It is important to note that each directive operates independently of the others.  For example, if a transaction involves a person subject to two separate directives, a U.S. person engaging in that transaction must comply with both directives.  

 

Date Released
February 24, 2022