On August 19, 2022, the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) replaced the existing General License (“GL”) 38 with GL 38A and issued a new GL 50. These GLs permit certain activities otherwise prohibited by EO 14024, which targets, among others, specific sectors (including the financial services sector) of the Russian economy. Our previous blog post regarding EO 14024 and the financial penalties imposed under it can be found here, here, here and here. The contents of both GLs are summarized below.

GL 38A

As explained in detail in our previous blog post, GL 38 authorizes all transactions customarily incidental and necessary to the processing of pension payments to U.S. Persons to the extent otherwise prohibited by Executive Order (“EO”) 14024. The only substantive change made by GL 38A to GL 38 is that GL 38A has expanded the authorization under GL 38 to also cover transactions related to the processing of pension payments to non-US persons outside of Russia. This extended authorization is subject to the same conditions and limitations prescribed in GL 38.

GL 50

GL 50 authorizes all transactions that are ordinarily incidental and necessary for (1) closing an unblocked/non-SDN individual account with a blocked financial institution in accordance with EO 14024 and (2) unblocking and lump-sum transfer of all remaining accounts funds and other assets from the closed account to the non-blocked/non-SDN person, including the non-blocked/non-SDN person’s other account at a non-blocked/non-SDN financial institution. GL 50 specifically excludes certain transactions from the scope of the authorization, such as opening or maintaining a correspondent or passing account for or on behalf of any entity subject to Directive 2 under EO 14024 or transactions prohibited by Directive 4 under EO14024.