Moscow Exchange is not just sitting around after the U.S. slapped sanctions on them in June. They’re getting ready to fight back.
According to the Investor Rights Defense Club, the Exchange has some legal tricks up its sleeve, all thanks to their legal consultants at Step Forward.
On August 19, during a meeting with the Investor Protection Club, a rep from Step Forward laid out the strategy. They’re planning to go head-to-head with the U.S. Office of Foreign Assets Control (OFAC).
Part of their game plan is to hit up OFAC directly to get some answers on how general licenses can be used to unblock assets.
Sanctions and licenses: The battle begins
The drama started on June 12, when OFAC hit the Moscow Exchange and its affiliates, the National Clearing Center (NCC) and the National Settlement Depository (NSD), with sanctions.
OFAC even threw in a bone by giving a license to wrap up operations with these entities until August 13, but they decided to extend it until October 12. Yeah, like that’s going to make things any easier for Moscow.
The United Kingdom didn’t want to miss out on the action, so they jumped on the bandwagon the very next day, sanctioning the same Moscow Exchange, NSD, and NCC.
The UK’s Office for Financial Sanctions Implementation (OFSI) gave the green light to unblock assets held through NSD, but only until October 12. It’s a ticking time bomb, and everyone knows it.
But here’s where things get interesting. According to the Investor Protection Club’s legal consultant, Delcredere, the Belgian Treasury and the Luxembourg Ministry of Finance aren’t playing by the same rules.
They’re not automatically following U.S. and UK sanctions when it comes to unblocking assets in NSD accounts.
But don’t get too excited just yet. Euroclear and Clearstream, the big dogs in this game, might still ask for U.S. or UK licenses if those assets have any connection to their jurisdictions, whether by issuer or currency.
OFAC’s license, which runs until October 12, might be the key to unlocking assets stashed in NCC accounts with big U.S. banks like JP Morgan Chase and BNY Mellon. But there’s a catch.
According to Delcredere, these American banks are basically saying, “Sorry, not sorry. Only American entities can play this game.” Moscow is left in the cold, but the legal team isn’t about to let that slide.
Step Forward’s rep had some advice: if you’ve got assets caught up in this mess, you might want to talk to JP Morgan Chase and BNY Mellon directly. The idea is to figure out if you can move assets under General License 100A.
Don’t hold your breath, though. OFAC isn’t in the habit of dishing out individual licenses for transactions that should be covered by the general one.
