26 Apr 2022 10:10

OFAC extends sanctions deadline for GAZ Group to May 25

MOSCOW. April 26 (Interfax) - The U.S. authorities have granted another one-month extension for the finalization of negotiations aimed at getting Russian tycoon Oleg Deripaska's GAZ Group out from under sanctions.

The latest deadline of April 27, 2022 has been extended to May 25.

The list of questions and answers published by the U.S. Office of Foreign Assets Control (OFAC) along with the license did not state directly that this is the last deferral of sanctions for GAZ, but it repeatedly stresses that after its expiration U.S. residents will only be able to carry out any transactions with the Russian automotive group and subsidiaries with special permits.

Unlike previous licenses, the new one prohibits the use of funds blocked as of May 2018; until now, they could be used to finance a list of permitted operations.

GAZ was hit by U.S. sanctions in April 2018 along with its owner Deripaska, but the restrictions have still not completely taken effect, as OFAC has repeatedly extended the deadline to give the group time to conclude negotiations to get out from under the sanctions. Deripaska's other two largest companies, En+ Group and Rusal were taken off the Specially Designated Nationals List (SDN List) after the businessman gave up control of them.

The last extension of the sanctions deadline in July 2020 was accompanied by new requirements for the Russian automaker. GAZ is now required to provide the U.S. Treasury Department with financial reports and minutes of board meetings, reports on the composition of the board and changes to it, as well as lists of any planned and formed new joint ventures within five days of the end of each quarter. A similar reporting procedure was imposed for GAZ financial agreements worth upwards of $5 million.

In addition, the license required GAZ to confirm for OFAC within five days of the end of each month that it is not acting on behalf of Deripaska or other persons included in sanctions lists, and that control of the company is exclusively in the hands of the board of directors and its shareholders.

GAZ has repeatedly said that the sanctions are having a negative impact on its financial position.