In accordance with section 223(d) of the Countering America’s Adversaries Through Sanctions Act (CAATSA), the US Office of Foreign Assets Control has amended Ukraine/Russia-Related Directive 4.
Under the Directive, unless licenced or authorised by OFAC, the following activities by a US person or within the US are prohibited: “the provision, exportation, or reexportation, directly or indirectly, of goods, services (except for financial services), or technology in support of exploration or production for deepwater, Arctic offshore, or shale projects” that have the potential to produce oil in territories of, or claimed by, the Russian Federation, and that involves any person listed under the Directive.
The amendments to the Directive adds a ban on projects that are initiated on or after 29 January 2018, that have the potential to produce oil in “any location”, and in which any person listed under the Directive has a 33% or greater ownership interest, or ownership of a majority of the voting interests.
There are further prohibitions on transactions that evade, avoid or violate (including attempts) any of the prohibitions contained in the Directive. Links available for the OFAC Notice, updated OFAC FAQs relating to the Directive, and new OFAC FAQs relating to particular provisions of CAATSA. In addition, the US Department of State has published public guidance concerning energy sanctions relating to the Russian Federation, specifically sections 225 and 232 of CAATSA.