U.S. Treasury Takes Sweeping Action Against Russia's War Efforts
WASHINGTON – Today, May 8, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated individuals and entities critical to Russia’s ability to wage war against Ukraine. [....]
OFAC is also taking action to cut off access to services that are used by the Russian Federation and Russian elites to evade sanctions. Today, OFAC identified accounting, trust and corporate formation, and management consulting as categories of services that are subject to a prohibition on the export, reexport, sale, or supply, directly or indirectly, from the United States, or by a U.S. person, wherever located, to any person located in the Russian Federation, pursuant to Executive Order (E.O.) 14071.
OFAC has further determined that these same services sectors of the Russian Federation economy are subject to sanctions pursuant to E.O. 14024. Wealthy Russians have relied on U.S. expertise to set up shell companies, move wealth and resources to alternate jurisdictions, and conceal assets from authorities around the world. In addition, Russian companies, particularly state-owned and state-supported enterprises, rely on these services to run and grow their businesses, generating revenue for the Russian economy that helps fund Putin’s war machine.
“Today we are further constricting Russia’s economy and access to services and technology it needs to conduct this unprovoked invasion,” said Secretary of the Treasury Janet L. Yellen. “Preventing Russia from accessing the United States’ valuable professional services increases the pressure on the Kremlin and cuts off its ability to evade sanctions imposed by the United States and our partners. We are also targeting Putin’s ability to generate revenue that enables his aggression, as well as entities and their leaders who support his destructive actions.”
PROHIBITION ON CERTAIN SERVICES AND EXPANSION OF SANCTIONS AUTHORITIES
Treasury is also taking action to cut off Russia’s access to certain key services from U.S. companies, which Russian Federation companies and Russian elites use to build wealth, generating revenue for Putin’s war machine, and evade sanctions. Today, OFAC issued a determination pursuant to E.O. 14071 prohibiting the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of accounting, trust and corporate formation, and management consulting services to any person located in the Russian Federation. This prohibition will take effect June 7, 2022. In conjunction with this determination, OFAC is issuing new guidance and general licenses authorizing certain transactions related to these services. Today’s action means that the Russian Federation and Russian elites will no longer benefit from U.S. companies’ valuable accounting, trust and corporate formation, and management consulting services.
In parallel with this action, OFAC has identified the accounting, trust and corporate formation services, and management consulting sectors of the Russian Federation economy pursuant to section 1(a)(i) of E.O. 14024. This determination allows for sanctions to be imposed on any individual or entity determined to operate or have operated in any of those sectors and expands the United States’ ability to swiftly impose additional economic costs on Russia for its war of choice in Ukraine. This action builds on previous determinations providing for sanctions against those that operate or have operated in the aerospace, marine, electronics, financial services, technology, and defense and related materiel sectors of the Russian Federation economy.
As a result of today’s action, all property and interests in property of the designated persons above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons are prohibited, unless authorized by a general or specific license issued by OFAC, or otherwise exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.
In addition, today’s action prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of accounting, trust and corporate formation, or management consulting services to any person located in the Russian Federation. This prohibition takes effect June 7, 2022.
Delaware Business Incorporators, Inc. (DBI) and DBI Global Filings, LLC provide corporate formation services. As such, we will fully comply with Executive Order (E.O.) 14071 regarding sanctions against person's located in the Russian Federation.