Treasury Department Authorizes Transactions Involving Bank of Russia Until June 24, 2022

By Donald Zuhn --

A General License issued on March 2, 2022 by the Office of Foreign Assets Control ("OFAC") of the U.S. Department of the Treasury authorizes "U.S. persons . . . to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, or certifications" for a limited time when such activities relate to transactions involving the Central Bank of the Russian Federation ("Bank of Russia") and to the extent that such activities would otherwise be prohibited by Directive 4 under Executive Order (E.O.) 14024.  According to the General License, transactions that "are ordinarily incident and necessary to such persons' day-to-day operations in the Russian Federation" are authorized "through 12:01 a.m. eastern daylight time, June 24, 2022."

Directive 4 of the OFAC, which was issued on February 2, 2022, indicates that "the Director of the Office of Foreign Assets Control has determined, in consultation with the Department of State, that the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation are political subdivisions, agencies, or instrumentalities of the Government of the Russian Federation."  As a result, the Directive states that:

[T]he following activities by a United States person are prohibited, except to the extent provided by law, or unless licensed or otherwise authorized by the Office of Foreign Assets Control:

any transaction involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation, including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities.

The Directive also prohibits the following:

(1) any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions of this Directive; and (2) any conspiracy formed to violate any of the prohibitions of this Directive.

A recent report in The National Law Review notes that the Directive and General License discussed above "will essentially prevent any payment of fees to Rospatent (the Russian patent office)" (see Ryan Cagle, "Russian Sanctions Create Patent Risks," National Law Review, March 31, 2022).  Thus, Applicants prosecuting applications before Rospatent or paying annuities on Russian patents may have to make some difficult decisions regarding the prosecution of those applications and maintenance of those patents in the coming months.  According to the National Law Review report, applications being prosecuted before the Eurasian Patent Organization (EAPO) may not raise the same issues at this time as "financial transactions for the EAPO (AO UniCredit Bank and AO Raiffeisenbank) are not included in the U.S. sanctions."

Hat tip to MBHB partner and Patent Docs contributor Joshua Rich for alerting us to General License No. 13.

For additional information regarding this and other related topics, please see:

• "USPTO News Briefs," April 4, 2022
• "USPTO Provides Advice Regarding Dealings with Rospatent," March 22, 2022
• "Georgian and Estonian Patent Offices Join Other IP Offices in Expressing Support for Ukraine," March 13, 2022
• "Several Law Firms Close Russian Offices," March 13, 2022
• "Russia Permits Uncompensated Use of Certain Patents without Patentee Consent," March 11, 2022
• "Lithuanian Patent Office and EUIPO Join Other Patent Offices in Expressing Support for Ukraine," March 10, 2022
• "USPTO Terminates PPH with Rospatent and Terminates Engagement with NCIP," March 10, 2022
• " Life Sciences Business Leaders Call for Immediate and Complete Economic Disengagement from Russia," March 9, 2022
• "PRH Joins Other Patent Offices in Expressing Support for Ukraine," March 9, 2022
• "USPTO Terminates Engagement with Rospatent and EAPO," March 7, 2022
• "Ukrpatent Continues Normal Operations Despite Russian Aggression," March 6, 2022

Comments

[skeptical]

What exactly does the exception (reprinted below - CAPS emphasis is mine) allow as authorized transactions?

"(b) This general license does NOT authorize ANY debit to an account on the books of a U.S.
financial institution of the Central Bank of the Russian Federation, the National Wealth Fund of
the Russian Federation, or the Ministry of Finance of the Russian Federation."

[skeptical]

Also from March 2:

https://www.voanews.com/amp/un-general-assembly-overwhelmingly-condemns-russia-s-invasion-of-ukraine-/6467348.html