Yesterday, the U.S. Office of Foreign Assets Control (OFAC) added Public Joint Stock Company Alrosa (Alrosa) to the List of Specially Designated Nationals (SDN List), subjecting the company and its majority-owned subsidiaries to full U.S. blocking sanctions. According to OFAC, Alrosa is the world's largest diamond mining company and is responsible for 90 percent of Russia's diamond mining capacity.
The move effectively cuts off Alrosa from U.S. commerce and requires U.S. persons holding property in which Alrosa has an interest to formally "block" or freeze that property and report it to OFAC. OFAC issued a temporary general license allowing U.S. persons to engage in all transactions ordinarily incident and necessary to the wind down of transactions involving Alrosa and its owned entities until 12:01 am May 7, 2022. OFAC also updated three existing general licenses authorizing U.S. persons to engage in certain limited transactions involving Alrosa debt and equity, Alrosa derivative contracts, and the wind down of Alrosa USA, Inc.
Absent authorization under a general license or a specific license issued by OFAC, any transactions with Alrosa that have a direct or indirect nexus with the United States or U.S. persons risk violating the sanctions and significant transactions by non-U.S. companies involving Alrosa could trigger secondary sanctions penalties. U.S. and non-U.S. companies that deal in Russian-origin diamonds need to carefully review these new sanctions.
As part of yesterday's action, the United States also expanded existing sanctions on United Shipbuilding Corporation (USC), a major Russian shipbuilder.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.