OFAC Publishes New Russia-Related FAQs
The Office of Foreign Assets Control on June 9 published new Russia-related frequently asked questions to clarify which activities are prohibited by its restrictions surrounding accounting, corporate formation and management consultant services (see 2205090042).
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In FAQ 1064, OFAC said the consulting restrictions cover “executive search and vetting services,” including services that offer “strategic business advice” and the development of marketing programs. In FAQ 1068, OFAC said the restrictions also extend to tax preparation and filing services. But the agency said restrictions don’t apply to exports of “tax preparation-related software” to Russia, which are distinct from certain tax services.
The accounting and consulting restrictions also don’t block U.S. people or companies from exporting software to Russia, “provided that such associated services do not fall within the categories of management consulting, accounting, or trust and corporate formation,” the agency said in FAQ 1067.
For example, U.S. companies can provide a Russian company with certain “continuing updates and technical support services related to the software,” OFAC said, but can’t sign a contract with the company to help it choose a “new enterprise application software.”
The restrictions also don’t apply to certain educational services, according to FAQ 1066, and don’t “necessarily” restrict U.S. people from working for Russian companies, OFAC said in FAQ 1061. While employees are blocked from exporting certain services to the company, OFAC doesn’t prohibit them “from providing other services not covered by this determination as part of their employment by Russian companies.”
In FAQ 1063, OFAC said the management consulting restrictions don’t “distinguish between new and existing trusts and companies.” Those activities are blocked “regardless of whether the services are performed as part of the formation of a new trust or company, or as part of the administration or maintenance of an existing trust or company,” OFAC said.
In FAQ 1060, OFAC said its corporate formation restrictions don’t prohibit U.S. people from serving on the board of directors of a company located in Russia, but it does prevent “providing nominee officer or director services in which a U.S. person is contracted to serve as a nominee officer, director, shareholder, or signatory of a legal person on behalf of a person located” in Russia.
Other FAQs clarify that the prohibitions prohibit U.S. people from serving as voting trustees on behalf of people located in Russia and apply to U.S. subsidiaries of Russian companies. OFAC also interprets a “person located in the Russian Federation” to include people “in the Russian Federation, individuals ordinarily resident in the Russian Federation, and entities incorporated or organized under the laws of the Russian Federation or any jurisdiction within the Russian Federation.”