Table of Contents
What Happened on April 29, 2026
On April 29, 2026, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued General License No. 131E (GL 131E), extending the authorization for negotiations and the execution of conditional contracts for the sale of Lukoil International GmbH (LIG), the Austrian holding company through which Lukoil manages its foreign operations. The new expiration date is May 30, 2026. OFAC simultaneously updated FAQs 1224 and 1225, replacing references to GL 131D with references to GL 131E.
GL 131E fully replaces GL 131D, which was issued on March 30, 2026. The substantive terms of the authorization are unchanged: the same categories of permitted activity, the same exclusions, the same limitations. Only the deadline has shifted, granting the parties an additional 30 days. This is the fifth extension in the GL 131 series.
The Lukoil foreign assets sale remains a focal point of OFAC’s policy posture, but the rhythm and signaling of the extensions are evolving.
The GL 131 Series: Fifth Extension and a Narrowing Horizon
The GL 131 series began on November 14, 2025, when OFAC, days after adding Lukoil to the SDN List, issued the original general license to govern negotiations over the company’s foreign portfolio. The chronology illustrates how the licensing horizon has shifted:
- GL 131 (November 14, 2025): initial authorization through December 13, 2025, a 29-day window.
- GL 131A (December 10, 2025): extended through January 17, 2026, a 38-day window.
- GL 131B (January 14, 2026): extended through February 28, 2026, a 42-day window.
- GL 131C (February 26, 2026): extended through April 1, 2026, a 32-day window.
- GL 131D (March 30, 2026): extended through May 1, 2026, a 32-day window.
- GL 131E (April 29, 2026): extended through May 30, 2026, a 30-day window.
Over six months, the series has moved from a comparatively generous opening window to ever-shorter intervals. GL 131E gives negotiators precisely 30 days before the next decision point. The contraction sends a dual message: OFAC is not prepared to terminate the negotiation track, but it is also unwilling to underwrite a long planning horizon for the parties.
One technical detail is worth noting. GL 131E was signed not by OFAC Director Bradley T. Smith, who signed every prior license in the series, but by Deputy Director Lisa M. Palluconi. The signature carries no legal weight in itself; it does suggest, however, that periodic extension has been routinized within the agency, no longer requiring sign-off from the principal.
The Authorization Perimeter of GL 131E
GL 131E authorizes two categories of activity, set out in paragraphs (a) and (b) of the license.
The first category covers negotiations and conditional contracts. The license authorizes all transactions otherwise prohibited by Executive Order 14024 that are ordinarily incident and necessary to negotiations with Lukoil or its affiliates concerning the sale, divestment, or transfer of LIG, or of any entity in which LIG directly or indirectly holds a 50 percent or greater interest. Permitted activity in this category includes negotiation of principal terms; financial, legal, and operational due diligence; retention of outside advisors and law firms; and execution of agreements in principle, binding letters of intent, executory contracts, and similar instruments. The critical condition: performance of any such contract must be expressly conditioned on receipt of a separate OFAC specific license.
The second category covers maintenance and wind-down. The license authorizes transactions ordinarily incident and necessary to maintaining or winding down the operations of LIG entities, including their contracts, agreements, and operational procedures. Blocked accounts of LIG entities may be used, debited, and credited for these purposes.
GL 131E does not authorize the unblocking of any property blocked under 31 CFR Chapter V, except for LIG accounts used for maintenance purposes. It does not authorize transactions with sanctioned parties other than Lukoil and its affiliated structures, absent separate authorization. It also does not authorize any transfer of funds to persons, entities, or accounts located in the Russian Federation.
In substance, GL 131E is a negotiation license only. The actual sale of LIG will require a separate OFAC specific license.
OFAC’s Conditions for Approving the LIG Sale
The updated FAQ 1224 sets out OFAC’s substantive criteria for the eventual transaction. These conditions have remained constant since GL 131C and are reaffirmed with each subsequent iteration. They define the framework within which the Lukoil foreign assets sale must be structured:
- Severance of all ties between LIG and Lukoil. Every entity within the deal perimeter must fully terminate corporate, operational, and contractual relationships with Lukoil and its Russian affiliates.
- Blocking of proceeds owed to Lukoil pending sanctions removal. Any transaction proceeds payable to Lukoil as seller must be placed in a blocked account under U.S. jurisdiction and must remain there until the sanctions are lifted.
- No present-day economic benefit to Lukoil. The transaction must not deliver immediate value to Lukoil, whether through advance payments, asset swaps, or share exchanges.
- Control over downstream resales. Buyers of LIG will be required to obtain OFAC approval before any subsequent disposition of material LIG assets.
FAQ 1224 also contains a provision that is often overlooked in public discussion: OFAC reserves the right to revoke any license in the 131 series at any time if it determines that Lukoil and LIG are not negotiating the sale in good faith. The negotiation window is therefore conditional not only on the calendar but also on OFAC’s assessment of the parties’ actual conduct.
Parallel Tracks: GL 128C and GL 130A
The GL 131 series is the negotiation track. Two operational licenses run in parallel:
- GL 128C (issued April 14, 2026, effective through October 29, 2026) authorizes the maintenance and orderly wind-down of Lukoil’s retail fueling stations outside Russia. Without it, thousands of stations across dozens of countries would face an immediate operational shutdown affecting end consumers.
- GL 130A (issued April 14, 2026, effective through October 29, 2026) authorizes virtually all transactions involving four Bulgarian Lukoil entities, including the Lukoil Neftohim Burgas refinery. This is not wind-down authorization but routine operational coverage.
The asymmetry in duration is the point. The operational licenses run more than six months out, into late October. The negotiation license runs only 30 days, until May 30. That gap reveals OFAC’s calibration: the agency is willing to give retail infrastructure and the Bulgarian cluster a long planning horizon to keep them functioning, while keeping the deal itself on a tight timeline to push the negotiations toward conclusion.
Signals for Negotiators and Compliance Teams
The fifth extension of the negotiation license carries several distinct signals for market participants.
First, the Lukoil foreign assets sale remains a viable scenario. OFAC has now sustained the negotiation track for six consecutive months without terminating it. Combined with the long-horizon extensions of the operational licenses, this indicates that Treasury views Lukoil’s foreign portfolio as a candidate for structured divestment rather than for liquidation.
Second, the window for executing a conditional contract is narrowing. The 30-day step embedded in GL 131E tells participants not to expect open-ended extensions. The transaction discussed last November with Gunvor SA was rejected by the U.S. administration before the original GL 131 was even issued, and no concrete replacement buyer has been publicly announced since. If no signed conditional contract emerges within the 30-day window, further extensions may become a matter of political negotiation rather than administrative routine.
Third, any conditional contract executed under GL 131E must contain an explicit provision making performance contingent on receipt of a separate OFAC specific license. The absence of such a clause renders the contract a sanctions violation for every party involved. This is not a drafting nicety; it is a precondition for the validity of the authorization itself.
Fourth, the updated FAQs introduce no substantive changes. Buyers and their counsel can continue structuring transactions against the same criteria that have applied since fall 2025. Stable conditions are a meaningful positive signal for serious bidders.
Practical Recommendations
For anyone involved in or advising on the LIG transaction, GL 131E sets up several immediate priorities:
- Review of contract conditionality. Draft conditional agreements must explicitly reference the requirement of a separate OFAC specific license and incorporate the corresponding condition precedent.
- Deal structure aligned with FAQ 1224. The architecture of the transaction must be designed from the outset to satisfy the four conditions of FAQ 1224. A structure that cannot demonstrate clean severance from Lukoil, blocking of proceeds, and absence of present-day benefit will face significant friction at the specific license stage.
- Compliance documentation refresh. Internal memoranda, bank instructions, draft contracts, and correspondence must replace references to GL 131D with GL 131E. Effective date: April 29, 2026.
- Monitoring of negotiation conduct. OFAC retains the discretion to revoke the license if it concludes that negotiations are not being conducted in good faith. This adds a behavioral risk dimension on top of the calendar risk.
OFAC’s next move on the 131 series is expected around May 30, 2026. By that point, either a signed conditional contract for the Lukoil foreign assets sale will have surfaced (opening the next phase, the application for an OFAC specific license), or OFAC will issue GL 131F with a further extension. Each scenario will require an updated legal assessment.
