Reed Smith Client Alerts

On April 19, 2021, the Department of Treasury, Office of Foreign Assets Control (OFAC) revoked Belarus General License 2G and issued Belarus General License 2H (GL 2H), “Authorizing the Wind Down of Transactions Involving Certain Blocked Entities,” restoring sanctions against nine Belarusian companies. The nine companies that are the subject of GL 2H are large conglomerates that hold shares in many companies operating in Belarus. Accordingly, persons with Belarus-related business should evaluate their transactions and their supply chains to determine whether it is necessary to wind down any business in the region.

In 2006, President George W. Bush imposed sanctions on Belarus pursuant to Executive Order (EO) 13405, “Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus.” Almost a decade later, OFAC issued General License No. 2, broadly authorizing transactions with the following nine state-owned companies and their subsidiaries, without actually lifting the sanctions:

  • Belarusian Oil Trade House
  • Belneftekhim
  • Belneftekhim USA, Inc.
  • Belshina OAO
  • Grodno Azot OAO
  • Grodno Khimvolokno OAO
  • Lakokraska OAO
  • Naftan OAO
  • Polotsk Steklovolokno OAO

OFAC continuously renewed the general license, so between October 30, 2015 and April 19, 2021, U.S. and non-U.S. persons were permitted to do business with these companies.1

With the issuance of GL 2H, the position has now changed. This new general license implements a 45-day wind-down period, during which persons relying on previous versions of the general license must wind down business and activities with the nine companies and their subsidiaries. Transactions with any of the nine entities that are not ordinarily incident and necessity to wind down existing business are now prohibited, and, with respect to non-U.S. persons, sanctionable.