U.S. Sanctions by the United States Department of the Treasury pursuant to Directive 1* issued under Executive Order of 15 April 2021

03.05.2021

Clearstream Banking1 informs customers that on 15 April 2021, the United States imposed new sanctions expanding restrictions on the purchase of certain Russian sovereign debt and other financing instruments. These are additional to the restrictions in respect of Russian sovereign debt put in place under the CBW Act Directive in 2019 (see Announcement A19103).

Pursuant to the new Executive Order issued by President Biden on 15 April 2021, the Office of Foreign Assets Control (OFAC) issued a directive ordering that the following activities by U.S. financial institutions2 are prohibited as of 14 June 2021, except to the extent provided by law or unless licensed or otherwise authorised by OFAC:

1. Participation in the primary market for ruble or non-ruble denominated bonds issued after 14 June 2021 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; and

2. Lending ruble or non-ruble denominated funds to the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation or the Ministry of Finance of the Russian Federation.

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 not designated as Specially Designated Nationals (SDNs) and all other activities involving their property or interests in property are permitted, provided such activities are not otherwise prohibited under this or any other sanctions program implemented by OFAC.

Primary market

Clearstream Banking is closely monitoring any new issuances in respect of the above.

Secondary market

U.S. financial institutions are not prohibited from participating in the secondary market for debt issued 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.

Income and corporate events

In respect of expected forthcoming corporate or income events on existing eligible securities from the issuers in scope of this Directive, these will be monitored and reviewed in cooperation with the relevant depositories or paying agents.

Further information

For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.

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* This new Directive 1 under the Executive Order of 15 April 2021 should not be confused with the existing Directive 1 of the Sectoral Sanctions Identification List which imposed restrictions on certain new debt or equity of certain Russian financial institutions. The pre-existing Directive 1 of the Sectoral Sanctions Identification List is unaffected by the new measures.

1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.

2. In the context of this Directive, “U.S. Financial Institutions” refers to any U.S. entity (including its foreign branches) that is engaged in the business of accepting deposits, making, granting, transferring, holding, or brokering loans or other extensions of credit, or purchasing or selling foreign exchange, securities, commodity futures or options, or procuring purchasers and sellers thereof, as principal or agent. The term includes depository institutions, banks, savings banks, trust companies, securities brokers and dealers, futures and options brokers and dealers, forward contract and foreign exchange merchants, securities and commodities exchanges, clearing corporations, investment companies, employee benefit plans, and U.S. holding companies, U.S. affiliates, or U.S. subsidiaries of any of the foregoing. This term includes those branches, offices, and agencies of foreign financial institutions that are located in the United States, but not such institutions’ foreign branches, offices or agencies.