Debt and Equity Sanctions Against Major State-Owned and Private Russian Entities, Including More Financial Institutions
To target debt and equity Russia could use to finance its invasion, OFAC issued Directive 3 under EO 14024 to prohibit transactions and dealings by US persons or within the United States in new debt longer than 14 days in maturity and new equity of 13 entities listed in the Directive’s Annex 1, any other entities listed by OFAC under the Directive in the future, and any entity directly or indirectly owned 50% or more, individually or in the aggregate, by one or more of such entities. For entities listed in Directive 3 or 50% or more owned by such entities, the restrictions are applicable to new debt or new equity issued on or after March 26, 2022. For any entities listed by OFAC under Directive 3 in the future, the restrictions will be applicable 30 days after the relevant entity’s listing. The entities included in Directive 3 are:
- Credit Bank of Moscow Public Joint Stock Company
- Gazprombank Joint Stock Company
- Joint Stock Company Alfa-Bank
- Joint Stock Company Russian Agricultural Bank
- Joint Stock Company Sovcomflot
- Open Joint Stock Company Russian Railways
- Public Joint Stock Company Alrosa
- Public Joint Stock Company Gazprom
- Public Joint Stock Company Gazprom Neft
- Public Joint Stock Company Rostelecom
- Public Joint Stock Company RusHydro
- Public Joint Stock Company Sberbank of Russia
- Public Joint Stock Company Transneft
What to do: We recommend that any US company dealing in debt instruments, and US companies selling products on credit (net 14 days or greater), screen their customer list for these companies, as well as companies owned 50 percent or more by one or more of these companies.