The US Treasury’s Office of Foreign Assets Control (OFAC) has implemented sanctions on additional Russian financial institutions, notably Russia’s Gazprombank and several foreign subsidiaries. These blocking sanctions prohibit US persons and entities from transacting with Gazprombank or its listed subsidiaries, as well as any entity owned 50% or more by Gazprombank or any other sanctioned entity. OFAC additionally designated more than 50 smaller Russian banks, as well as more than 40 securities registrars, and a list of Russian nationals operating in the financial services sector.

Beyond US institutions, the OFAC cautioned that foreign financial institutions that maintain correspondent relationships with these banks should be aware that continuing to do so entails significant sanctions risk. The OFAC released an alert specifically warning foreign financial institutions of the sanctions risks of joining the Russian financial messaging system Sistema Peredachi Finansovykh Soobscheniy or “System for Transfer of Financial Messages” (SPFS).

US companies operating in Russia should not transact with any of the entities newly blocked by the OFAC’s sanctions, including Gazprombank and any entities owned 50% or more by sanctioned entities or individuals. Concurrent to these new sanctions, OFAC issues two new general licenses authorizing the winding down of transactions involving Gazprombank and other sanctioned financial institutions. The OFAC continues to maintain general licenses for specific forms of transactions related to agriculture, medicine, certain business of international organizations and diplomatic missions, etc.

In response to the OFAC’s alert regarding SPFS and in accordance with the OFAC’s recommendation, entities with operations in Russia should review their exposure to institutions that have joined SPFS, as any such banks may be conduits for Russian sanctions evasion.

For detail, see the OFAC’s notice here.