The Treasury Department allows transactions involving the Bank of Russia until June 24, 2022 | McDonnell Boehnen Hulbert & Berghoff LLP

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A general license issued on March 2, 2022 by the Office of Foreign Assets Control (“OFAC”) of the United States Department of the Treasury authorizes “American persons … to pay taxes, fees or import duties, and to purchase or receive permits, licenses, registrations or certifications” for a limited time when such activities relate to transactions involving the Central Bank of the Russian Federation (“Bank of Russia”) and to the extent such activities would otherwise be prohibited by Directive 4 under Executive Order (EO) 14024. According to the General License, transactions that “are habitually incidental and necessary to the day-to-day operations of such persons in the Russian Federation” are permitted “until 00:01 daylight saving time of East, June 24, 2022.”

OFAC Directive 4, which was issued on February 2, 2022, states that “The Director of the Office of Foreign Assets Control has determined, in consultation with the State Department, that the Central Bank of the Russian Federation , the National Wealth Fund of the Russian Federation and the Ministry of Finance of the Russian Federation are political subdivisions, agencies or bodies of the government of the Russian Federation.” Accordingly, the directive states that:

[T]The following activities of a U.S. Person are prohibited except to the extent required by law, or unless licensed or otherwise authorized by the Office of Foreign Assets Control:

any transaction involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation or the Ministry of Finance of the Russian Federation, including any transfer of assets to these entities or any foreign exchange transaction for or on behalf of these entities.

The directive also prohibits the following:

(1) any transaction that evades or avoids, is intended to evade or avoid, violates or attempts to violate any of the prohibitions in this guideline; and (2) any conspiracy formed to violate any of the prohibitions in this guideline.

A recent report in the Review of national legislation notes that the directive and general license discussed above “will essentially prevent any royalty payments to Rospatent (the Russian patent office)” (to see Ryan Cagle, “Russian Sanctions Create Patent Risks,” National Law Review, March 31, 2022). Thus, applicants pursuing applications with Rospatent or paying annuities on Russian patents may have to make difficult decisions regarding the prosecution of these applications and the maintenance of these patents in the months to come. According to Review of national legislation report, claims being prosecuted before the Eurasian Patent Organization (EAPO) may not raise the same issues at this time because “financial transactions for EAPO (AO UniCredit Bank and AO Raiffeisenbank) do not are not included in US sanctions”.

Hats off to partner MBHB and Patent documents contributor Joshua Rich for alerting us to General License #13.

For more information on this and other related topics, please see:

• “USPTO News Briefs”, April 4, 2022
• “USPTO Provides Guidance Regarding Relations with Rospatent”, March 22, 2022
• “Georgian and Estonian patent offices join other IP offices in expressing support for Ukraine”, March 13, 2022
• “Several law firms are closing offices in Russia”, March 13, 2022
• “Russia Allows Uncompensated Use of Certain Patents Without Consent of Patent Holder”, March 11, 2022
• “Lithuanian Patent Office and EUIPO join other patent offices in expressing support for Ukraine”, March 10, 2022
• “USPTO Terminates PPH with Rospatent and Terminates Engagement with NCIP,” March 10, 2022
• “Life sciences business leaders call for immediate and complete economic disengagement from Russia”, March 9, 2022
• “PRH joins other patent offices in expressing support for Ukraine”, March 9, 2022
• “USPTO Ends Engagement with Rospatent and EAPO”, March 7, 2022
• “Ukrpatent continues normal operations despite Russian aggression”, March 6, 2022

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