The USA included in the blocking sanctions list new residents of Belarus
On March 24, 2023 the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) included three legal entities and nine individuals residents of Belarus in the blocking sanctions list (SDN List), as well as identified one aircraft – Boeing 737.
In particular, the following entities are included in the U.S. blocking sanctions list:
- OJSC Minsk Automobile Plant – Management Company of Holding BELAVTOMAZ (MAZ);
- OJSC BELAZ – Menagement Company of Holding BELAZ-HOLDING (BELAZ).
Meanwhile, MAZ and BELAZ are also subject to the blocking sanctions of the European Union (from June 21, 2021).
Blocking sanctions with respect to the designated persons provide the following restrictions:
- blocking of assets located in the territory of the USA or owned/controlled by a U.S. person;
- prohibition to U.S. persons for transfer of, payment for, export of, offsetting for, and other actions with respect to assets of such persons.
It should be noted, that transactions by non-U.S. residents may be considered as a violation of the sanctions if there is a link with the United States (US Nexus), for example, conducting transactions with the sanctioned person in U.S. dollars and/or using the U.S. banking system.
The U.S. sanctions apply to companies controlled by the designated person, even if they are not in the blocking sanctions list itself. However, the mechanism for determining the control differs significantly from the British and European approaches.
The key criterion for control is that the designated entity directly or indirectly owns 50% or more of the shares (stock) in the others company. The same restrictions are applied to such controlled companies as mentioned above for the designated entities himself.
Hence, inclusion of the above-mentioned legal entities in the U.S. blocking sanctions list means termination of any deals/transactions in which there is a link with the United States (US Nexus), such as payments for transactions with U.S. residents/in U.S. dollars or through U.S. banking system, as well as blocking their assets within the United States not only in relation to the designated entities themselves, but also to other companies where they directly or indirectly own 50% or more of the shares (stock).
In accordance with the legislation of the Republic of Belarus, restrictive measures (sanctions) of third countries have no legal force in the territory of Belarus. The information may be useful when assessing arguments of foreign partners on the presence/absence of restrictions on their side.
The current status of the sanction blocking lists can be checked on OFAC’s official website or on the Sanctions Search special resource.
