Belarus Sanctions

Belarus Sanctions

956

Answer

In July 2017, the United Kingdom Financial Conduct Authority (FCA) announced the “future cessation and loss of representativeness” of the ICE Benchmark Administration’s 35 global reference rates, the LIBOR rates.  In light of the discontinuation of LIBOR as a benchmark reference rate, OFAC is issuing additional guidance.   

The Belarus, Russia, Ukraine-/Russia-related, and Venezuela-related sanctions programs prohibit U.S. persons from dealing in certain new debt of persons identified as subject to these prohibitions.  In FAQ 944 (Belarus), FAQ 986 (Russia-related)FAQ 371 (Ukraine-/Russia-related), and FAQ 511 (Venezuela-related), OFAC provides examples of new debt, such as “bonds, loans, extensions of credit, loan guarantees, letters of credit, drafts, bankers acceptances, discount notes or bills, or commercial paper” issued on or after various specified dates.  For more information on the effective dates and relevant debt maturities for each of these sanctions programs, please see FAQ 947 (Belarus), FAQ 984 (Russia-related)FAQ 370 (Ukraine-/Russia-related), and FAQ 553 (Venezuela-related).

For the Belarus, Russia, Ukraine-/Russia-related, and Venezuela-related sanctions programs, OFAC has indicated that certain changes to contractual terms of loans, contracts, or other agreements that were entered into prior to the effective date of the relevant sanctions prohibitions could convert pre-existing debt that was not subject to the sanctions prohibitions into new debt that is subject to the sanctions prohibitions.  (See FAQ 947 (Belarus), FAQs 987 and 989 (Russia-related) FAQ 394 (Ukraine-/Russia-related), and FAQ 553 (Venezuela-related).

Loans, contracts, or other agreements that use LIBOR as a reference rate that are modified to replace such benchmark reference rate will not be treated as new debt for OFAC sanctions purposes, so long as no other material terms of the loan, contract, or agreement are modified.

Date Updated: February 24, 2022

Date Released
January 7, 2022

948

Answer

Yes.  Transactions by U.S. persons and within the United States involving derivative products whose value is linked to an underlying asset that constitutes prohibited debt issued by a person subject to Directive 1 under E.O. 14038 are prohibited, unless otherwise authorized by the Office of Foreign Assets Control.

Date Released
December 2, 2021

947

Answer

If a U.S. person entered into a revolving credit facility or long-term loan agreement prior to December 2, 2021, drawdowns and disbursements with repayment terms of 90 days or less are permitted.  In addition, drawdowns and disbursements whose repayment terms exceed 90 days are not prohibited if the terms of such drawdowns and disbursements (including the length of the repayment period, the interest rate applied to the drawdown, and the maximum drawdown amount) were contractually agreed to prior to December 2, 2021 and are not modified on or after December 2, 2021.  U.S. persons may not deal in a drawdown or disbursement initiated on or after December 2, 2021 with a repayment term that is greater than 90 days if the terms of the drawdown or disbursement were negotiated on or after December 2, 2021.  Such a newly negotiated drawdown or disbursement would constitute a prohibited extension of credit.

Date Released
December 2, 2021

946

Answer

Yes.  U.S. financial institutions may continue to maintain correspondent accounts and process U.S. dollar-clearing transactions for the Ministry of Finance of the Republic of Belarus or the Development Bank of the Republic of Belarus, provided such activity is not otherwise prohibited pursuant to E.O. 14038, any Executive order issued pursuant to the national emergency declared in E.O. 13405, or any other sanctions program implemented by the Office of Foreign Assets Control.

Date Released
December 2, 2021

945

Answer

No.  Directive 1 under E.O. 14038 prohibits U.S. persons from engaging in only certain activities with the Ministry of Finance of the Republic of Belarus or the Development Bank of the Republic of Belarus, as explained in FAQ 940

All other activities with the Ministry of Finance of the Republic of Belarus or the Development Bank of the Republic of Belarus, or involving their property or interests in property, are permitted, provided such activities are not otherwise prohibited pursuant to E.O. 14038, any Executive order issued pursuant to the national emergency declared in E.O. 13405, or any other sanctions program implemented by the Office of Foreign Assets Control.

Date Released
December 2, 2021

944

Answer

The term debt includes bonds, loans, extensions of credit, loan guarantees, letters of credit, drafts, bankers’ acceptances, discount notes or bills, or commercial paper.

Date Released
December 2, 2021

943

Answer

No.  The prohibitions in Directive 1 do not apply to any entity that is owned, directly or indirectly, 50 percent or more by the Ministry of Finance of the Republic of Belarus or the Development Bank of the Republic of Belarus, whether individually or in the aggregate.

Date Released
December 2, 2021

942

Answer

No, so long as the terms of such debt (including the repayment period, the interest rate, and the amount) were contractually agreed to before December 2, 2021 and are not modified on or after December 2, 2021.

Date Released
December 2, 2021

940

Answer

Pursuant to Directive 1 under E .O. 14038, the following activities by U.S. persons or within the United States are prohibited, except to the extent provided by law or unless licensed or otherwise authorized by the Office of Foreign Assets Control:  all transactions in, provision of financing for, and other dealings in new debt with a maturity of greater than 90 days issued on or after December 2, 2021 by the Ministry of Finance of the Republic of Belarus or the Development Bank of the Republic of Belarus.  These prohibitions apply to all denominations of debt.

Further, except to the extent otherwise provided by law or unless licensed or otherwise authorized by the Office of Foreign Assets Control, the following are also prohibited:  (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 contained in Directive 1 under E.O. 14038; and (2) any conspiracy formed to violate any of the prohibitions in Directive 1 under E.O. 14038.
 

Date Released
December 2, 2021