The US Department of Treasury's Office of Foreign Assets Control (OFAC) has clarified the US's prohibition against providing accounting, trust and corporate formation and management consulting services (covered services) to persons in Russia. The White House announced the prohibition last month after President Joe Biden and G7 leaders met through a virtual conference with Ukraine President Volodymyr Zelensky and committed to take further measures to "strengthen Ukraine's position on the battlefield and at the negotiating table".
The OFAC issued clarification on the prohibition of covered services through the Treasury's FAQs on the Financial Sanctions webpage on 9 June 2022 (US Dept. of Treasury: Financial Sanctions FAQ). According to the OFAC, the prohibition applies to:
- tax preparation and filing services to any person in Russia, unless otherwise exempt or authorized by the OFAC;
- nominee officer or director services in which a US person is contracted to serve as a nominee officer, director, shareholder, or signatory of a legal person on behalf of a person located in Russia;
- services to a parent company located in Russia by a US subsidiary;
- trust and corporate formation services to persons located in Russia, regardless of whether the services are performed as part of the formation of a new trust or company, or as part of the administration or maintenance of an existing trust or company;
- services related to strategic business advice, organizational and systems planning, evaluation, and selection, development or evaluation of marketing programs or implementation, mergers, acquisitions, and organizational structure, staff augmentation and human resources policies and practices and brand management; and
- voting trustee services on behalf of, or for shares of, persons located in Russia, unless otherwise exempt or authorized by the OFAC.
In addition, the FAQs clarify that the prohibition does not apply to providing services:
- to persons located outside Russia that are owned or controlled by persons located in Russia, provided that the benefit of the services is not ultimately received by (i.e. an indirect export to) a person in Russia;
- as members of the board of directors of a company located in Russia;
- other than the covered services;
- on education (e.g. online university courses) regarding the subjects of the covered services to persons located in Russia, provided that they do not evade or avoid the prohibition on providing the underlying services; and
- associated with the export of software (e.g. software design and engineering) related to the covered services.