St. Petersburg Exchange depository sends OFAC its strategy for unlocking assets, awaits action plan from regulator

MOSCOW. Jan 11 (Interfax) - The St. Petersburg Exchange settlement depository, which handles foreign securities and the foreign currency funds of its trading participants and their clients, submitted a strategy for unblocking assets to the U.S. Treasury Office of Foreign Assets Control (OFAC) in early January, St. Petersburg Bank said in a statement.

"Representatives of the Office of Foreign Assets Control of the U.S. Treasury Department were informed about SPB Bank and that sanctions restrictions have affected the assets of a large number of non-sanctioned individuals," the bank's lead lawyer and head of the project for unblocking assets Oleg Nafikov, said.

St. Petersburg Bank expects OFAC will approve the action plan, he said.

Meanwhile, St. Petersburg Bank is working on the documentation required to unblock the assets.

The U.S. Internal Revenue Service has suspended the Foreign Financial Institution (FFI) agreement for FATCA (Foreign Account Tax Compliance Act) purposes with SPB Bank, the statement says. As a result, a 30% tax rate will be applied to dividend payments on U.S.-issued securities for clients of St. Petersburg Bank.

OFAC, the U.S. Treasury Department division responsible for sanctions enforcement, added the St. Petersburg Exchange to its sanctions list on November 2. Trading in foreign securities was then suspended. OFAC also issued a license to the St. Petersburg Exchange to wind down its operations by January 31, 2024.