United States Russian Sanctions and the ‘General Licenses’

Introduction

1. On 6th April 2018 the United States Office of Foreign Asset Affairs (“OFAC”) extended the US Specially Designated Nationals List (“SDN List”) to 7 leading Russian oligarchs (Vladimir Bogdanov, Oleg Deripaska, Suleiman Kerimov, Igor Rotenberg, Kirill Shamalov, Andrei Skoch and Viktor Vekselberg) and their children, spouses, parents and siblings, 12 companies and 17 senior Russian government entities.  A number of these oligarchs are heavily involved in the energy sector.  

2. On 23rd April OFAC issued two General Licenses Nos. 12A and 14 which were designed to ameliorate some of difficulties which must have arisen from the sanctions, especially with United Company Rusal. On 6th April OFAC had previously issued General Licenses Nos. 12 and 13.  Further General Licenses may follow in response to particular problems.

3. The sanctions have already given rise to various issues in relation to the performance of contracts governed by English law: for example, whether any force majeure or other contractual provisions can be invoked (and if so when) or whether such contacts are now tainted by illegality, especially where payment is effected by US dollar remittances through the United States banking system.

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