On same day, UK GVT clamped down on metal exports alongside US, see #208063.
Trading-Related Determination
New Determination under EO 14071 and 31 CFR 587.802 prohibits warranting services for the metals produced on or after April 13, 2024 on a global metal exchange.
This joint action of the US and UK effectively bans Russian metals from the two largest exchanges, London Metal Exchange (LME) and Chicago Mercantile Exchange (CME).
Global exchanges, which play key role in the trading of industrial metals worldwide, will be prohibited from accepting new aluminum, copper, nickel produced by Russia.
In addition, the Determination prohibits services to acquire the metals produced on or after April 13, 2024 as part of the physical settlement of a derivative contract.
It also follows that a US person wherever located or anyone in the US may not supply, directly or indirectly, sell, export, reexport the above services to a person in Russia.
Import-Related Determination
The second Determination under EO 14068, EO 14114, prohibits importation into the US of aluminum, copper, and nickel of Russian origin produced on/after April 13, 2024.
Including importation for admission into a foreign trade zone located in United States.
OFAC GL 13I Administrative Transactions
OFAC issued Russia-related General License 13I, Authorizing Certain Administrative Transactions Prohibited by Directive 4 under Executive Order 14024 under 31 CFR 587
Authorizes US persons to pay tax, fees, import duties, and purchase/receive permits, licenses, registrations, certifications, or tax refunds ordinarily incident and necessary.
Ordinarily incident and necessary to the day-to-day operations in Russia of US persons or entities, that are otherwise prohibited by Directive 4 under Executive Order 14024.
Directive 4 prohibits transaction involving Russian Central Bank, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation.
The permitted transactions are authorized through 12:01 am EDT on Jul. 11, 2024.
OFAC FAQs Scope of Prohibitions
FAQ 1172 confirmed that the Determination under EO 14071 does not impose new prohibitions on banks acting as intermediaries for payments related to Russian metals.
Processing, clearing, or sending of payments related to Russian metals by a US bank on behalf of non-US persons is not prohibited by the Determination if conditions met.
Conditions are the bank is operating solely as an intermediary, and does not have any direct relationship with the person providing a service covered by this Determination.
In other words, the person is a non-account party as it relates to relevant transaction.
Also FAQ 1171 confirmed determinations don't apply to aluminum, copper, nickel that have been incorporated or substantially transformed into other products outside RUS.
FAQ 1170 clarified what is meant by the term aluminum, copper, and nickel.
Whereas FAQ 1169 clarified what is prohibited by Determination under EO 14071.
FAQ 168 provided background on the actions US and UK took on Apr. 12, including that in Dec. 2023, and Feb. 24, 2024, the G-7 issued statements signaling their intentions.
Including their intent to reduce Russia’s revenues from metals, see #202415.
As for FAQ 1019, it described what is meant by the term Russian Federation origin.
FAQ 1128 explained how OFAC defines those categories of services that are prohibited.
The FAQ contains in a table the categories of prohibited services, the corresponding Determination that sets forth the prohibition, effectiveness date, and related FAQs.
US Treasury Yellen Statement
US Treasury Secretary Yellen said action taken in a targeted and responsible manner.
It will reduce Russia’s earnings while protecting partners, allies from unwanted effects.
Will continue to target the revenue Russia can earn to continue its brutal war on UKRN.
Apr. 2024 CME Russian Suspension
On Apr. 14, 2024, CME published Notice SER-9400, on suspension of approved status for warranting, delivery of aluminum brands under COMEX aluminum futures contract.
Published a table of aluminum brands in which it has suspended the approved status for registration for delivery and delivery of aluminum of Russian federation origin.
Effective immediately until further notice, for those produced on/after Apr. 13, 2024.
Noted aluminum from these brands produced prior to Apr. 13, 2024, remain eligible.
Regulators
CME; OFAC; US State Dept; US Treasury
Entity Types
B/D; Bank; BS; Corp; Exch; IA; Ins; Inv Co; MSB
Reference
CME: Nt SER-9400, 4/14/2024; OFAC: PR, Determination, GL 13I; FAQs 1172, 1171, 1170, 1169, 1168, 1019, 1128, 4/12/2024; US Treasury: PR, 4/12/2024; US State Dept: PR, 4/12/2024; EO 14071; EO 14068; EO 14114; Citation: *31 CFR* 587, 587.802;
