REPEAT: Russia Sanctions Include Sovereign Debt Restrictions

US Tsy provided some details over "first tranche" of U.S. sanctions on Russia in Response to Actions in the Donetsk and Luhansk Regions. Three initial targets:

• BLOCKING MAJOR RUSSIAN FINANCIAL INSTITUTIONS
• TARGETING ELITES AND FAMILIES CLOSE TO PUTIN
• SOVEREIGN DEBT RESTRICTIONS
  • On the latter, US Tsy dept announced OFAC also increased restrictions on dealings in Russia’s sovereign debt, further cutting Russia off from sources of revenue to fund its government or President Putin’s priorities, including his further invasion into Ukraine. These restrictions significantly cut off a core way for Russia to raise money. This kind of measure creates a strain on resources for the Russian state and greater risk for its ability to manage its finances.
  • Specifically, OFAC issued Russia-related Directive 1A under E.O. 14024, “Prohibitions Related to Certain Sovereign Debt of the Russian Federation” (the “Russia-related Sovereign Debt Directive”), amending and superseding Directive 1 under E.O. 14024. This extends existing sovereign debt prohibitions to cover participation in the secondary market for bonds issued after March 1, 2022 by the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation.