A US Company for Russian Citizens: What OFAC Checks and What the Bank Checks
Where the confusion usually starts
A client walks in with a Russian passport and asks whether he can own a Delaware limited liability company (LLC). Most advisers instinctively reach for the Specially Designated Nationals and Blocked Persons List (SDN List), run the name, find nothing, and say yes. That answer is right about a quarter of the time.
No US sanctions program prohibits a...
OFAC 50 Percent Rule: When a Company Becomes Blocked
What the OFAC 50 percent rule actually says
The company is not on any sanctions list. The name screens clean, there are no hits, and it is registered in a perfectly ordinary jurisdiction. The transaction is still prohibited, and the payment will still be blocked. That is the OFAC 50 percent rule at work.
The statement of the rule is short. Any entity owned in the aggregate, directly or...
Source of Funds for a US Business: What US Banks Check for Russian Clients
Source of funds vs. source of wealth: two different questions
Bank compliance teams work with two related but distinct concepts. Source of funds is the origin of a specific sum moving through a specific transaction, say, a $200,000 wire into a new company's account. Source of wealth is the origin of a client's entire net worth: how the person built the fortune of which this transaction is...
Lukoil Foreign Assets Sale: GL 131E Extends the Negotiation Window to May 30, 2026
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...
What Are the Risks of Being on the OFAC SDN Sanctions List?
Being placed on the OFAC SDN sanctions list comes with serious and far-reaching consequences. Most notably, it brings severe legal implications, strict financial restrictions, and often results in the inability to conduct business as usual, particularly in the international arena.
Inclusion on the list can also cause significant reputational harm, affecting both personal and professional...
Alfa Group Founders and RSPP Under US Sanctions
Introduction
According to the official notice on the website of the Office of Foreign Assets Control of the US Department of the Treasury (OFAC), the founders of Alfa Group M. Fridman, P. Aven, G. Khan and A. Kuzmichev, as well as the Russian Union of Industrialists and Entrepreneurs (RSPP) were included in the OFAC SDN List on August 11, 2023.
Reasons for Imposing US Sanctions on the...
The 50 Percent Rule and Controlling Blocked Persons
Introduction
The 50 Percent Rule is one of the critical points of the US sanctions policy. It helps to understand how US sanctions work, whom they primarily target, and who falls under them.
US Sanctions and the 50 Percent Rule
Not only do those individuals and companies on the US sanctions list fall under US sanctions, but also those entities in which blocked persons own 50 percent or...