1782 Discovery Blog: International Wires Frozen Subject To U.S. Sanctions May Be Released Pursuant To OFAC License

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1782 Discovery Blog: International Wires Frozen Subject To U.S. Sanctions May Be Released Pursuant To OFAC License

by | Jun 15, 2022 | 1782 Blog

The United States has imposed sanctions on certain Russian individuals, companies and banks which prohibit U.S. persons from conducting business with them.  Marks & Sokolov attorneys are well positioned to provide advice and guidance regarding sanction issues.

  • Specially Designated Nationals and Blocked Persons (SDN): The U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) has designated numerous Russian individuals, companies and banks as SDNs. Under U.S. sanctions, U.S. persons are prohibited from engaging in any transactions with an SDN. Marks & Sokolov attorneys can advise regarding the scope of sanctions; what is not subject to U.S. sanctions; and potential removal of an SDN designation. 
  • Blocked Wires From Russian Banks: On February 14, 2022, the U.S. Treasury Department took action against Russia’s two largest financial institutions, Public Joint Stock Company Sberbank of Russia (“Sberbank”) and VTB Bank Public Joint Stock Company (“VTB Bank”), and their subsidiaries, drastically altering their fundamental ability to operate. On a daily basis, Russian financial institutions conducted about $46 billion worth of foreign exchange transactions globally, 80 percent of which were in U.S. dollars. The vast majority of those transactions are now disrupted. This action against these two banks — which combined make up more than half of the total banking system in Russia by asset value — are now blocked from processing payments through the U.S. financial system. These Russian financial institutions can no longer utilize the U.S. financial system.  As a result, numerous payments from or to these banks were interrupted during transit, with numerous funds frozen at the intermediary processing banks.  
  • OFAC License For Release of Funds:  OFAC has a process for the issuance of a limited license for the release of funds frozen as a result of U.S. sanctions.   Marks & Sokolov attorneys are experienced in seeking licences from OFAC and are available to assist or answer any questions regarding the process.  
  • Dispute Resolution Under Sanction Restrictions: Disputes between sanctioned entities and western entities may proceed under certain circumstances. Marks & Sokolov attorneys have previously obtained OFAC licenses in order to represent sanctioned entities in litigation matters.
  • 28 U.S.C. §1782 Discovery: The U.S. allows participants in pending and future foreign proceedings to obtain documents and testimony from sources located in the U.S., for use in their home proceedings. Our attorneys are very experienced in obtaining and defending against discovery for use in foreign proceedings.

Thomas C. Sullivan is an attorney in the Philadelphia office of Marks & Sokolov LLC. Mr. Sullivan represents Western, Russian and Ukrainian clients in complex commercial disputes including civil RICO, securities fraud, Foreign Corrupt Practices Act, Convention on the International Sale of Goods and ICC Arbitration matters.  He has litigated numerous Section 1782 discovery matters throughout the United States and was recently published in Obtaining U.S. Discovery For Use In Non-U.S. Tribunals Pursuant To 28 U.S.C. § 1782 (Chapter 7), Juris Publishing, LLC, 2020.

 

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