Waiting for a Peace Agreement

With hopes rising for a swift end to the war in Ukraine, the question arises of what will happen to the anti-Russian sanctions once peace is restored. On one hand, everyone understands that US sanctions will eventually be lifted in some form. On the other hand, the questions of ‘when’ and ‘in what form’ remain open.

US Sanctions Removal After Peace Is Established

The first US sanctions against Russia were imposed back in March 2014, immediately after the annexation of Crimea. While individual measures appeared from time to time afterward, the real turning point in US policy came after the full-scale Russian invasion of Ukraine on February 24, 2022. In response, the United States imposed unprecedented sanctions, covering thousands of restrictions. Today, in terms of sheer numbers, Russia remains the country most heavily targeted by US sanctions.

The US sanctions policy toward Russia has now been in place for 12 years, so it would be unrealistic to expect all sanctions to vanish overnight. That is simply not going to happen. But what can we realistically expect if hopes for peace are realized?

Looking beyond wishful thinking, it is clear that no one anticipates all sanctions being lifted at once. Even the Russian side does not seriously consider this option, given its understanding of how improbable it would be.

Current discussions focus on the potential removal of sanctions on certain key Russian companies, such as Aeroflot, Rosneft, and Lukoil. There is also consideration to lift certain sectoral sanctions, for instance, in the financial sector, to facilitate international transactions.

Getting in Line for US Sanctions Removal

So, what will happen to all the other companies and individuals who are either under sanctions themselves or have their assets frozen? All other companies and individuals will need to submit their applications to the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury, where each petition for US sanctions removal will be considered on a case-by-case basis.

Currently, applications for an OFAC license and requests for removal from the US sanctions list take more than a year to process. Imagine what will happen when a flood of applications arrives at OFAC for sanctions relief. While a complete breakdown is unlikely, a huge backlog is inevitable and could last for years.

Acting early by submitting a US sanctions removal application gives a significant advantage. Those who file petitions for removal from the OFAC SDN list and for an OFAC license ahead of time will automatically be at the front of the line for sanctions relief.

Conclusion

If you, your company, or your assets are under OFAC sanctions, contact us. US sanctions removal is our core practice. We will quickly review your situation and propose a clear action plan.